Since entering office, TransNamib CEO Johny Smit has reiterated his commitment to turnaround the company’s economic fortunes, stabilize the financial position of the company, cut on wastage and providing sustainable and affordable railway services to Namibia and beyond.
Despite entering at a time when the country is facing tough times, impeding its growth and its ability to support state owned companies, Smit seems to have a plan on how to steer the TransNamib train.
But considering the company’s past records and the number of Smit’s predecessors who failed to compete their full terms in office, this train ride will by no means be as smooth as it may sound. Smit sat down with The Patriot to detail his background and his plans to make one of the country’s most underperforming SOEs profitable.
He touched on issues such as political interference, fully utilizing the asset base of the company, maintaining a sound relationship between board and management as well as private sector involovement.
TP: What does good corporate governance mean to you?
JS: Within any company there are policies that need to be followed, be it within the structures of the company as well as in terms of looking at the objectives of the company. As CEO, I am appointed to turn this company around so that it becomes profitable. So within the framework of our policies and guidelines between myself, the board and my management and rest of the structures of our shareholder, that is what good corporate governance means. With no intentions of self-interest, the interest of the company must always supersede everything.
TP: What is your vision for TransNamib?
JS: It is a bit difficult to say at this point in time, but in terms of the long-term value that TransNamib must add value to its shareholders and further to that push ourselves in terms of the logistics hub initiative. We need to occupy our rightful place in that sense, because at the moment we are handling a only a small portion of the transportation volumes in the country.
TP: What reforms do you intend on introducing at the institution?
JS: I am a man with many ideas but before implementing them I need to have a basic understanding of TransNamib. The main idea is to turn it around, but in terms of any other further detail as to how and when I cannot answer yet. I need to see the foundation I am working from, at the moment I do not know what it is.
TP: Can you think of any issues that might hamper your plans for the company?
JS: I believe in terms of my appointment I have been appointed for a reason, to push the company forward. There are a lot of opportunities to turn company around. You need to look at the business opportunities of the company and see what the low-hanging fruits are. In terms of time, my vision is for us to create value on the business by increasing cargo movement in the medium term while the long-term vision is centered around linking ourselves to the region. In terms of decision-making, whatever I decide must be in the interest of the long-term plan, I cannot take short-term decisions.
TP: A number of CEOs have been appointed and dismissed from TransNamib over the last decade and many have not finished their term of office. What will you do different to ensure that you finish your term?
JS: That makes it even more exciting because I want to succeed. I never failed and do not intend to fail. What happened in the past is not for me to judge, but for me to carry out my mandate and move the company forward through value creation.
TP: Many Namibians have abandoned travelling by rail, mostly because of the time it takes to travel from one destination to the other. How do you plan to get travelers back on the train?
JS: It is a combination of factors, some include the confidence of the public, the reliability of our service and the need to become more efficient when it comes to service delivery. We cannot continue doing things in the same format, we need to find swift ways to do business and relook how we engage clients because the road sector that we are competing is very flexible and competitive. In short, it is a combination of factors that we must address, but it is possible.
TP: What do you make of the statement that the country’s roads will only become safer if rail travelling is enhanced. What is the role of TransNamib to achieve this goal of road safety?
JS: We should optimize on that aspect in order to get more cargo onto the rail. At this stage the balance between rail and road is not in line when it comes to safety of our roads, but also in terms of the long-term perspective of cargo transportation in Namibia.
TP: SOEs have been viewed as mere job creation entities, with some having more employees compared to the task at hand. What is your general sentiment as far as this matter is concerned?
JS: We do find ourselves in a challenge at the moment, my perspective is that we must develop more business so that the cost per employee is at a level where company can still generate funds in the long-term and create shareholder value.
TP: The institution employs more than 1000 people. What measures will you take to ensure that the employee numbers and funds pumped into remuneration is equal to the output?
JS: We have over 1000 workers but there is already a programme in place to trim this number. More importantly however, is the need for us to focus on increasing cargo volumes and by extension generate revenue to ensure that TransNamib achieves self-sustainability levels. We also have to look at staff transformation in regard and ensure that when we change processes, we must look at our staff setup and composition as new skills come into play.
TP: There has been talks over the years that political interference is one of the reasons why the company has performed poorly over the years. How do you intend on dealing with political interference, should it arise?
JS: For me as a person and in my previous role as CEO, I have always tried to remain focus on the value and interest of the business and to make sure there is growth. My perception is also that interference will not happen where people get the benefit and the value of a company.
TP: The relationship between boards and executives at some the SOEs have been poor in the past. How will you work on ensuring that your relationship with the board is sound?
JS: With respect to that relationship, as CEO I have the executive powers to make decisions within my delegation framework. The board is there to provide strategies to support that. That is the role we will fulfill in terms of the executive powers at my level and that of the rest of the executive team. Through this process, we must ensure the relationship remains sound.
TP: You make it sound like a walk in the park when you speak of turning the company around. Is it really as easy as you make it sound?
JS: For me, off course a lot of things are tough in life, but if you focus on the simple things you will always win. For the short term it is about moving out of the ICU and then moving to the mid and long term. For the coming year it is important that the executive fulfill the role of ensuring that the decisions we take move us forward. The board will be part of the process in terms of their strategies as provided by the Namcode which provide guidance on corporate governance in Namibia.
TP: How would you value investment from the private sector?
JS: In terms of the business, we have to relook at our business opportunities and engage with our clients. I can already see during the time I have been here that we have not been looking at the full complement of the services we can deliver to our clients as well as to see how far we can take it. But if there is a need to develop strategic partners we will do so within the scope of the company’s operations because the private sector is key to our existence.
TP: There is a widely-held sentiment that TransNamib must sell-off some of its stake or enter into a PPP in order to ensure sustainability. Do you agree with this sentiment? If not, what is your take?
JS: In the short and medium term I would not recommend that because we must first look at how we can improve the management of the company and how we can we manage our assets better to create value. If we start giving it out we would still have to manage that contract, so if we cannot even manage what we have, how will we manage a management contract with a third party?
TP: Government bailouts have been the order of the day at TransNamib. What is your plan to put an end to over-dependence on government?
JS: In the short-term it is difficult considering where we are at the moment, we will need some form of support. But within the medium-term we have to move away from bailouts, we cannot have bailouts for TransNamib anymore, this company must become a business that creates value to its shareholder. It is still premature to say by when we will start making money, but we will keep the public informed as the process unfolds, for now we need some breathing space to get out of the ICU, that will take about six months. We need time to find our feet because at this stage we are slinging in the mud.
TP: You said the company will need some form of assistance from the shareholder, but you aware of the financial position of government. What alternative support mechanisms can you think of, if any?
JS: There are options we are looking at, I did not just take this position blindly. I thought it through and there is potential in our assets to help us in that regard. It is my firm view that all assets of TransNamib must we fully utilized so that we can start making money.
TP: Can we expect any changes to the business plan of the company?
JS: At this stage I am still studying the business to understand it better and subsequently the business plan. It will not be a significant change to the plan, but some critical elements will change, these elements are aimed at improving the way in which the company does its business.
TP: Could you give a last message of confidence about TransNamib to the readers?
JS: We need everybody at the moment to help us change the steering of this boat, it is going very close to the ice and we need to move it away from it. We need the employees, shareholders, public and the clients.