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 AFRICAN GROUND OPERATIONS LIMITED
(AFGO)
Interview with
Mr. Koen Neven,
Managing Director
July 15th 1999
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Could you begin by giving us a brief historical background of AFGO?
In 1994, the Ghana Civil Aviation Authority decided to privatize Aircraft and Cargo Handling at the Kotoka International Airport in order to enhance general efficiency and maximize returns on investment. A British Company (Gatwick Handling International) and a Belgium Company (Ferrum NV), put up a joint bid and won the Contract through competitive bidding. The Anglo-Belgian consortium subsequently set up and registered a Ghanaian Company called African Ground Operations Limited (AFGO), to execute the contract. AFGO commenced operations on 7th October, 1994.
How are the Shares of the Company distributed?
The two parent Companies hold 50/50 shares in AFGO.
What changes has the country witnessed from airfreight following your establishment?
AFGO revolutionized aircraft and airfreight handling in Ghana by introducing the latest state of the art equipment into the handling business for the first time. Also, for the first time in its history, the Ghana Civil Aviation Authority which had never received any revenue from Aircraft and Cargo handling, started receiving returns on its investments in infrastructure. As a result of the vast improvement brought about by the changeover, confidence was created in the existing Airlines and many more new customers were attracted to operate into Kotoka International Airport. There has been a corresponding increase in Import/Export Cargo tonnages handled by AFGO, as a result of the changeover.
What exactly did AFGO do to turn the situation around?
In addition to introducing modern state of the art equipment into our operations, we brought in specialists from Gatwick Handling International and Ferrum NV, to train the local staff in modern ways of handling for a period of six months. New Structures were set up and new procedures were introduced. The net result was a positive change in loyalty, behavior and attitude on the part of the staff. The staff were adequately remunerated and highly motivated through the improvement of their general Conditions of Service. AFGO believes that its success depends on Industrial Peace at the workplace. Management is therefore constantly in dialogue with the Union leadership as a means of solving problems and maintaining cordial industrial relations. The sum effect of all these are high productivity and general customer satisfaction.
What kind of goods do you handle?
We handle everything including general cargo, spare parts, agricultural produce and personal effects.
A few years ago Exporters of non-traditional products were complaining of shortage of storage facilities. To what extent has this problem been solved?
The problem in those early years was mainly due to the fact that the Exporters did not have in place any sound arrangements with Aircraft Operators as regards reliable and dependable flight schedules. As a result, Exporters often waited at the Airport with their produce without getting flights to convey them to their destinations, and when this happened, storage facilities became a problem. This situation has changed for the better over the years.
The Cargo Aircraft Operators are now operating a more reliable and dependable flights which make it possible for freshly harvested farm produce to be shipped to Europe the same day. This arrangement makes it possible for Exporters to have their produce displayed in shops in Europe the next day after harvesting. The question of storage facilities has thus assumed less importance of late. In addition to this, the Phase Two development of the Kotoka International Airport includes the construction of a completely separate export area with a shed large enough to accommodate large farm trucks with export produce. The completion of this facility would facilitate the handling of exports in all weather conditions. The Shed would have cold storage facility to cater for the storage of any commodity that requires storage under controlled temperature conditions.
In 1998, you were exporting more than you were importing. Would you say that that is a good reflection of the general state of the Ghanaian economy?
Yes, a recently published Government statistics on Trade showed that Export figures exceeded Imports, thus showing a balance of payment surplus in the country’s favour. This trend is the result of the intensive Export Promotion drive embarked upon by the Government. In addition to this, the general infrastructure and handling facilities, and improved reliability of Cargo flight schedules, coupled with sound marketing arrangements made by the Exporters in European markets, have made it possible for the Exporters to increase the volume of exports (especially pineapples) considerably.
How much export do you handle a year on the average?
In 1998, we handled 25,000 tons.
AFGO is listed as one of the top 100 Companies in Ghana in 1998. What was your turnover in 1998?
Our turnover in 1998 was approximately nine (9) million US Dollars.
| And how exactly do you make your money?
We have three (3) main sources of revenue, namely:
a) Underwing handling of all Aircraft operating into Kotoka International Airport.
b) Handling and storage of Import goods.
c) Handling of Export goods.
Is there any room in the industry for other Airfreight handlers?
I do not think so. Air Traffic into Kotoka International Airport is low as compared to that of European Airports. Cargo figures for both Imports and Exports are so low that AFGO is presently utilizing only about 30 percent of its handling capacity. Bringing in an additional handler would therefore not be a viable proposition.
So what are your expansion plans for the future. In what ways do you hope to grow?
AFGO is capable of handling the expected increase in Air Traffic with respect to both Passenger and Cargo when the Ghana Government’s Gateway Program takes off and Kotoka International Airport becomes the "Hub" Airport for the West Africa Region. Ghana Civil Aviation Authority has lined up some projects which if implemented would provide the enabling environment for AFGO’s future expansion.
These are:
a) The extension of the Import Warehouse (which has been completed recently).
b) The construction of a separate Export Shed to provide all weather operations.
c) The provision of a Cold Storage facility as part of the new Export Shed.
d) The construction of an apron large enough to accommodate about three wide-bodied aircraft, in front of the freight terminal. This would considerably reduce the risk in shuttling between the Passenger and Freight terminals with Import/Export Cargo with its attendant security risks. It would also cut down Cargo Aircraft turn round times.
e) Enlargement of the present baggage make up area in front of the passenger terminal, to facilitate the sorting out of baggage from different Airlines checking in passengers simultaneously.
Do you actually go and do some outright lobbying for more Airlines to come here or are you waiting for them?
No. We do not go out to lobby. Airlines who wish to operate into Kotoka International Airport usually make business contact with us.
Could you tell us which Airlines have shown interest?
In the last two (2) months, Air France, Saudi Arabian Airlines, Air Portugal, Air Burkina and Air Guinea, have made business contact with us.
Have any American Airlines shown interest?
Yes, Air America has been here as well.
On a more personal level, what would you say has been your greatest achievement since you were appointed as Managing Director of AFGO?
My greatest achievement is my success in transforming the workforce into a team of loyal and dedicated Management and Staff who are harnessing their skills in an atmosphere of trust and mutual respect, towards the achievement of our corporate goals. I can boast of a Company with an efficient workforce with high moral, high motivation, and high level of productivity. We have been able to achieve industrial peace at the workplace by adopting an open door policy, with regular communication and dialogue with the rank and file. This has been achieved without sacrificing discipline.
As a vital service provider, I take delight in the fact that our customers are generally very satisfied with the services they receive from the Company as a whole. This would not have been possible without working as a team.
In short, we have a great Company, sustained by a winning team.
As you know, we target American businessmen. What is your final message to them?
There is enough to do here. Ghana is a country full of opportunities. There is a Government that has recognized a lot of opportunity and is putting in place, a lot of infrastructure to make it happen. Ghana is the most peaceful country in West African Sub-Region in terms of political stability. This fact makes it the best destination for investments, be it business or tourism. Ghana’s Investment Code is one of the best. The proverbial Ghanaian hospitality awaits all American prospective businessmen.
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© World INvestment NEws, 1999.
This is the electronic edition of the special country report on Ghana published in Forbes
December 13th 1999 Issue.
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GHANA
