Africa Leaders Magazine

WILLIAM TEWIAH, CEO & Managing Director – ZEN Petroleum Limited, Ghana

WILLIAM TEWIAH, CEO & Managing Director - ZEN Petroleum Limited, Ghana - African Leaders Magazine

William Tewiah is the Managing Director of Zen Petroleum, a business he founded in 2008, in an industry he had no prior experience of.

Following his A levels, William worked in a factory after which he landed a job with Lloyds Bank in 1987, after 200 job applications. His big break came in 1994 when he secured a job with Merrill Lynch as a Management Accountant.  He went on to work as a Freelance Business Analyst with Japanese Bank – Nomura Bank and in various roles with PwC, Frankfurt Stock Exchange, Schroders Asset Management, Credit Suisse and UBS Bank.

William relocated to Ghana in 2008, following which, he started working on ZEN Petroleum in 2009 and won an initial contract supplying fuel to the Goldfields Mines in 2010. During this time, he largely worked on his own driving up and down to the mines at Tarkwa, located in Ghana’s Western Region.

ZEN Petroleum turned over $30m in its first year of operations, with a profit of $20,000. Since then, the company has gone on to win fuel and lubricant supply and management contracts with several mining companies in Ghana, Mali and Burkina Faso. This has made ZEN the largest supplier of fuel to Ghana’s mining sector, employing over 300 staff. In 2018, the ZEN brand expanded its portfolio to include the fuel retail business, starting with 20 stations with plans to double in size before the end of 2019. Currently, ZEN Petroleum is the 4th largest Oil Marketing Company in Ghana.

William remains responsible for strategic direction and day to day management of all Zen Petroleum operations and related activities in Ghana and other markets the company operates in.

WILLIAM TEWIAH, CEO & Managing Director - ZEN Petroleum Limited, Ghana - African Leaders Magazine

In an interview with Graphic Online, Mr William Kwadwo Tewiah had this to say about his company’s performance and industry challenges;

What does ZEN Petroleum do?

We are an oil marketing company (OMC). We do what the OMCs do, which is selling fuel in the downstream sector to end customers, retail stations, bar consumers among others. We do a lot of business with the mining companies and so a lot of our business is with the mines.

 

How long have you been in existence and what motivated you to go into the downstream petroleum sector?

Just over four years. My background is actually in banking but this was an opportunity that came up and it seemed like an interesting challenge. Because the downstream sector, especially for the mining business, was done by multinationals like Shell and TOTAL and so it was an interesting challenge for me to see if an indigenous Ghanaian company could provide a better service than what they were doing.

In terms of your service categories, apart from the mines what do you do and in terms of market share how do you fare?

The mine is the large part of it. In fact, we have one large customer, Gold Fields, who we supply and that is the bulk of our business. We are not really a large, diversified company and I think if you want to talk about success, you need to be a little bit careful. You cannot consider yourself a large success when you are dealing with one big customer.

We really need to diversify into other areas and we are looking at diversifying into other countries. We just set up ZEN Mali and we are close to doing something in Burkina Faso as we speak. So, until we reach the point where we have diversified as a business and have other large customers, we cannot really get ahead of ourselves and start thinking we are a big success story.

I am sure there are a lot of opportunities in the downstream petroleum sector which you are ready to capitalize on. What are some of the strategies that you are adopting to match the multinationals in this area and increase your market share?

The first thing to do is that you need to chase new businesses, and you need to get new customers; that is very important. The second thing is you need to develop talent. You need to look for good people to execute these contracts and to provide the service. It is a very challenging area; technical losses, system losses, managing fuel on sites where you have several depots that you are supplying to.

It is a very specialist area because you are using fuel management software and so you need people who really understand the area and who can add value. Logistics is a big part of it, so the second thing we do in addition to looking for new business is to look for good people. The company is only as good as the people who work for it. You need to motivate them and provide the leadership that they need to be able to provide the standard of service that you are looking to do and that is the second thing that we doing.

The third thing is to have internal controls. You need to have internal systems to make sure that you are able to back this service up. You need to pay your customers on time, you need to have financial discipline, and you need to have standards within your company itself. Those are the three things that we are doing; look for new business, look for good people and have good internal controls to control what happens within your company.

WILLIAM TEWIAH, CEO & Managing Director - ZEN Petroleum Limited, Ghana - African Leaders Magazine

How do you see the downstream petroleum sector in the next five years and where ZEN will be?

In the next four to five years, I see it dominated by multinational companies at the expense of local companies. It is a serious problem that we have. In fact, it is not even in the next five years but probably in the next 24 months, you will start seeing greater dominance by multinational companies unless there is strong policy direction to support the local companies to dominate the market.

There are currently 105 OMCs in the country. The largest and most successful are multinationals. It is going to get easier for them to grow market share because some of these companies are owned by oil traders who control the price of fuel that comes into a country.

So, imagine ZEN Petroleum trying to compete against Vivo, and Vivo is owned by Vitol, which is an oil trader. They import the fuel in the first place, so why would he sell the fuel to me at a price that I would have an advantage when he has a company that is competing against me?

It is not just ZEN but it is same for Allied, Fragas and GOIL, which are all 100 per cent Ghanaian-owned. We are all at huge risk of going out of business now if something is not done about it. The only thing we can do to save ourselves is to offer value to our customers, to try even harder, bend over backwards even more to do something that a multinational cannot do. A company like Shell or TOTAL cannot offer the kind of service that we do because we are much smaller, we react quicker to events and we can make decisions a lot quicker.

But in the long-term, customers are also going to be concerned about pricing, and if you have a company that controls the full supply chain in the industry, they are going to have advantages over you such that you simply cannot compete against them, so there is a real risk that the downstream petroleum sector is going to go the same way as the telecom sector. Do you know there is not a single Ghanaian player in the telecom sector? The downstream petroleum sector is going exactly the same way.

What is the relationship between you and the National Petroleum Authority (NPA) and other regulatory bodies?

The NPA is to regulate us, to set standards and our relationship with them is to make sure that we are compliant, and it is nothing more than that. We make sure that we meet any regulations that they put out; we pay our licencing fees, we do our monthly returns to them and that is all that it is.

What are some of the key challenges that you face as a business?

WTK: The key challenge as we speak now and the most immediate one is the availability of fuel. Our stocks are actually low and we risk operating without them, and that will mean we halt operations temporarily. The other challenges are challenges that face any other business. You know, getting good people, getting good standards, managing your cash flow, managing your finances; they are just normal challenges that every business deals with and those are relatively easier to deal with.

Some of the more difficult ones are things like perception. There is a widely held perception that a Ghanaian company somehow cuts corners; somehow we don’t do what we are supposed to do. It is a very difficult thing to get rid of and that is something that we are constantly aware of.

You know, I tell everybody in ZEN that people are expecting us to fold up, and  to fail at some point simply because we are a Ghanaian company, so we need to try three, four, five times harder than anybody does. Unless we are able to get over these perceptions, it is very difficult. Like I said, it is not unheard of for a contract to come up and a mining company will say that no Ghanaian company should tender because it is only for international companies. It has happened to us before; those are some of the challenges that we face simply because we are a local company.

How is it like raising finance to support your operations?

It is difficult! There is no question about it, especially if you are a local company. For us, four years ago, we had no history at all and that made it even difficult. But this is not a problem facing ZEN Petroleum alone, it is a general problem. It is a problem facing any company in this country.

Interest rates are very high and that is why you need to pay very close attention to your finances; you need to look at your profit and loss account.  Every day, you need to do your cash flow forecast to ensure that you do not get stuck, and as much as possible you need to use internally generated funds to grow your business because if you are going to borrow at 30 per cent, it is going to be difficult to repay that money and also make something for yourself.

The downstream petroleum sector is good business and so you make a lot of money. Don’t you?

 (Chuckles). No! My margins are set by the NPA. I don’t decide how much I make, the NPA does. And let me throw a statistic at you; the margin that is allowed for an OMC is 25 pesewas per litre. In dollar terms, that has fallen by 40 per cent this year so far, so my income, the money that I am making, the so-called big money, has fallen by 40 per cent. My workers’ real income has also fallen in value. How am I supposed to plug that gap? So, where is this perception that we are making big money?

So, you will advocate an increase in margins paid to OMCs?

Well, yes. As things stand now, we are down by 40 per cent but we are still supposed to provide the same level of service so how are we to fund that?

What keeps Mr Tewiah and ZEN Petroleum going? What is the motivation?

As I said before, the perception that Ghanaian companies are weak, and the thinking that we are not supposed to be around is what keeps us going. You know that sometimes in the face of adversity, you find strength from somewhere. If we go out of business tomorrow, one of the things that will be said is, “that is another Ghanaian company; they come, they show a lot of promise and they disappear the next day.” For that reason alone, we need to find a reason to keep going.

As I mentioned earlier, we compete with big multinationals with big financial muscle but we believe that by doing what we can and doing it properly and by going out of our way, it gives us a chance. Whether it happens or not, that is another thing but that is not going to cause us to pack out. We will keep going, doing our best and setting the standards and hoping that along the way, things will work out much better so we can continue to be in business.

WILLIAM TEWIAH, CEO & Managing Director - ZEN Petroleum Limited, Ghana - African Leaders Magazine

Who is William Kwadwo Tewiah?

I grew up in Saltpond, had my secondary education in Presbyterian Boys School in Legon. I left Ghana in 1986 and worked mainly in the banking sector in England, Germany, the Netherlands and Singapore for the best part of 20 years. I moved back here in 2008 and started ZEN Petroleum. I’m married with kids. Very proud to be a Ghanaian. I am a Fante first, a Ghanaian second and an African third.

What is your message to your clients?

My message to our clients is they should have faith in us. We are trying our best. We value our customers; we value their service and we want to give them something that they cannot get elsewhere.

We are a Ghanaian company and we can do it predominantly with Ghanaians. Just have the faith in us and give us the opportunity; allow us to tender for your business. Be proud to have a Ghanaian company serving you. Don’t be embarrassed by it or be afraid of us; we are not coming to run your company down. We will provide you with value for money and you will be glad that you had us

I will like to think that a lot of the customers we serve are very happy with the service we are providing them. Like I said, we try to burn backward and try to do the things that are otherwise impossible.

So, the message to customers is hang in there and try to have faith in us, and for potential ones, just give us the opportunity to prove ourselves. We have gone from the last four years from having a zero per cent market share to having a significant one now in the areas that we are operating and we believe we can keep expanding into other areas.

Thank you so much Mr Tewiah.

Source: talentagendaseries.com / graphic.com.gh

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