Uanguta lays bare Namcor’s money struggles

Namibian oil company Namcor is still in the financial weeds, according to interim managing director Ebson Uanguta.

"We are not out of the woods yet," he warned yesterday. Speaking at the government information centre, Uanguta shared insight into the state of affairs at the state-owned enterprise.

Despite a N$1.2 billion guarantee provided by the government earlier this year, which convinced commercial banks to make more money available to the company, Namcor still faces financial risk. Arrears could be covered, ongoing debt was restructured and better terms for future purchases could be negotiated, but the company “may need further support going forward”, the interim head said.

"The transformation and reform will still need support over the coming 12 to 18 months.”

"The debt is huge," he said, adding that Namcor’s creditors were almost ready to take the company into liquidation.



Efficiency ‘crucial’

Since the deputy governor of the Bank of Namibia was seconded in January this year to handle the oil company's turnaround plan, there has been progress, according to him. However, Namcor's finances remain a challenge.

The situation was caused by the decay of Namcor's management, lack of efficiency and the operation of parts of the company in isolation, Uanguta said.

"We had to break the silos." Specifically, collaboration between the downstream sales and marketing department, and the logistics and supply department was extremely important. He added that local sales must be processed in such a way that there is enough capacity available as soon as the product lands at the Walvis Bay harbour. Oil that has to wait on a ship for unloading costs hundreds of US dollars a day, which can impact Namcor's profits.

"We are now working on being proactive," he said. "Efficiency is crucial.”

He stressed that the oil industry insists on efficiency, especially as regulations on the price of fuel limit profits.

International oil companies boast of technology that measures their stocks around the clock and can instantly communicate the levels of storage tanks worldwide. Namcor does not have this level of support, and a delay in information carries severe consequences, according to Uanguta.

"We are now working on putting systems and processes in place for immediate access to information."



Millions saved

Uanguta also took the lead in reforming Namcor's budgeting process, saving N$22 million in unnecessary expenses for the state-owned enterprise.

"To limit costs, one must start with planning," he said. Travel and accommodation costs are two of the expenses that have been cut. "We must try to live within our means. Discipline starts at home.”

Dissemination of information within the enterprise has also helped to reduce discord and speculation, he noted.

Uanguta further lauded Namcor employees who have been working for three to four years without a raise before urging them to undertake their jobs with pride.

"When we manage these enterprises for the government and the country, we must do it as we manage the financial affairs at home. Our finances at home are handled so wisely, but when it comes to government affairs, there is [a] laissez-faire [attitude] and we do the least. The government is us, and the chosen few who serve should consider it a privilege. We have to show that we are not doing it for ourselves, but that we represent the people. We have to do the right thing and see that in five or 10 years, the people will benefit from it," he said.

Namcor spokesperson Paulo Coelho said the process to appoint a new managing director continues, and Uanguta is expected to stay on throughout the current financial year, depending on Namcor's advice.