LIGHT AT THE END OF THE TUNNEL FOR THREE WAYS

Jeff Baitwa has been to hell and back.

Draining court battles and the near-death experience of his company are an understated snapshot of the journey he has been on.  But he can now see light at the end of the tunnel and his business, BroGroup Ltd seems set to return, stronger and wiser.

While the rest of us after university, in the mid-1990s, set out to find jobs, brothers Oscar and Jeff started Three Ways Shipping, which is now the flag ship of their BroGroup holding company. They struggled to get a foothold in the highly competitive clearing and forwarding business, building the business to the point that, at the height of its success about a decade ago, they were reporting top line revenues of $30m(sh110b) and were employing at least 750 people across a network that stretched from the Mombasa and Dar es Salaam to their operations in western Uganda, where they were gaining a foothold in the oil & gas industry.

"Ironically, the oil & gas industry almost did in all their hard work. After the commercial viability was determined in 2006 the frenetic work around the exploration slowed to a crawl. Critical legislation, a tax dispute with UK-based explored Tullow Oil and negotiations surrounding the development of the oil fields, most especially the pipeline to Tanga in Tanzania, were to blame for the slowing momentum in the sector...

The slowdown badly affected Three Ways Shipping, which had positioned itself as the leading local logistics company servicing the sector.

Their bankers put them under receivership in 2016, before the company extricated itself from it in 2019.

In the meantime, the company found itself in a debilitating court battle with their client telecom company, MTN, which is still winding its way through the court system, but which Jeff thinks, is about to be resolved.

Just as the company battered and bruised, was girding its loins to begin a comeback, the Covid pandemic happened, setting them back deeper into the hole they had found themselves in. In Uganda and globally the Covid pandemic prompted a worldwide lockdown, that started around March 2020 and only last week did the World Health Organisation (WHO) announce the pandemic was finally over.

“I think we are over the worst now,” Jeff told Business Vision last week in his office on Jinja road. But not without pain.

In order to resuscitate the group, the brothers have had to invite new shareholders, offshore investment firm, Delux Group, which took a 20 percent stake in the company and brought in much needed financing to tide the company over its earlier challenges.

“The new investors are college alumni, some of whom are Ugandan who saw our situation and thought they could help us get back on our feet not only with resources but with their own experience,” Jeff said.

As a result, Jeff is now co-managing the company with Daniel Pettersson and a new, Chief Financial Officer (CFO), Chief Operations Officer (COO) and Human Resource Manager have been hired.

“Before our challenges we were servicing multiple industries -- trade, infrastructure, produce oil & gas and not only in Uganda but in Kenya ana Tanzania. In Kenya and Tanzania, we are already working through joint venture partners,” he said.

Already in Uganda, the BroGroup is in a joint venture partnership with the Johannesburg Stock Exchange (JSE) listed Grindrod Logistics Africa, focused on freight forwarding business opportunities.

"With BroGroup’s ducks lined up, Jeff is confident about the company’s future, but this hope is tempered by the experience of the last decade.

“During the challenging times I have better come to appreciate the need for self-belief, perseverance, patience as personal attributes. Also, good friends, supportive family and supportive workers and all those who stuck with us in various ways during the period,” Jeff said. “The relationships we developed have remained largely intact and we are grateful for that.”

It started as a two-man operation – Oscar in the UK taking orders and Jeff in Uganda doing last mile deliveries – it was called Equator Freight Services. That was in 1996, 27 years ago.

Jeff says, these last few years were as close as the company has ever come to being shut down and maybe that is what was needed for it to bring in new partners and reach for the next level of its potential.

"In the immediate future the group will be focused on the oil & gas sector, where first oil is expected by 2026, but there is a lot of logistical work needed to be done over the next three years and hopefully carry everyone along with them.

“We will be looking to employ local, buy as much as we can from here and even source funding locally. We will try and get as many opportunities to locals in a sustainable manner,” he said.

In the medium to longterm they are going to see more corporate evolution as they mature.

“I may still be the MD for the next two, max five years. We are trying to drive the business so that management is more independent from the shareholders,” he explained.

Jeff thinks they are definitely out of the woods, never mind that the enduring lesson from the Covid pandemic is to hope for the best but expect the worst.