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.
