How did Tristar perform in the first half of 2021?
In the six months ended June 30, 2021, we had a strong performance compared to the six months ended June 30, 2020. The Group’s consolidated revenue increased in the high single digit growth compared with a year ago, with growth across all our four segments of surface transport, maritime logistics, fuel storage and remote fuel logistics. EBITDA and Net Profit both reported double-digit growth year-over-year, driven primarily by improved margins in all four segments.
We continue to demonstrate resilience in our business with a solid start in 2021, which is supported by long-term contracts and strong relationships with blue-chip clients globally. We expect the strong first-half performance to translate to an overall good result for the full year.
What is Tristar’s growth strategy for the next 5 years, which markets are you planning to tap?
To a large extent our business has grown by following our customers into new markets and locations, and we will continue this approach in combination with some strategic acquisitions to complement growth. We have historically grown in double digits since inception and we expect this trend to continue going forward. Of course M&A is also a key component of our growth plans and we have a healthy backlog of projects and M&A opportunities in the pipeline which will sustain business growth for the Group for several years to come.
All our expansion plans, whether organic or by acquisition, will have our end customers’ interests in mind. We are continually looking to expand our geographical footprint and are actively looking to explore opportunities in new markets. Today, we operate in 21 countries and territories spread across the Middle East, Asia, Africa, the Pacific and the Americas. This year we are launching Shell co-branded fuel retail stations in the city of Kochi in Kerala. India is a huge country and a challenging market with great potential for expansion and our plans are to build a logistics ecosystem around the retail fuel business in India.
National and international oil companies have been long-term customers across all our verticals of maritime, road transport, warehousing and fuel storage in the GCC and in other countries where we operate.
Long-term charter agreements are in place for a major portion of our maritime logistics business where we own and operate a fleet of 35 ocean going tankers for clean petroleum products, LNG and LPG.
In parallel, we are working closely with all customers, focusing on compliance to the new regulatory standards for maritime vessels and the decarbonisation journey under ‘IMO 2020’ which sets a limit on the sulphur content in the fuel oil used on board ships to further improve air quality, preserve the environment, and protect human health.
Having entered the LNG market in 2019, further focus on the use of LNG as a bunker fuel to step to carbon-free fuels is being evaluated.
Tristar is today the largest privately run liquid logistics company in the Middle East. As its Founder and CEO, what is the legacy that you wish to leave behind through the brand?
I want the Tristar brand to be in the same company of our blue chip customer base. This means leaving behind a company legacy that is well respected, trusted, successful and a place where people will want to come to work. I would also like to see the company as being not just financially successful but also one that will be a role model in leading the private sector to do more towards building a more equitable and sustainable world for society in general. This means leaving behind a company that will also be a business for purpose, and not just profit.
What are the steps that Tristar is adapting to help it evolve to meet the needs of clients in a post-Covid world?
We cannot predict the future. But we can seek to understand what the future might hold, and what that means for us as an individual company. We need to explore scenarios to bind the uncertainty, to help us understand the underlying drivers of outcomes, and for some understanding of how we can shape those outcomes.
Key questions are what next and with what consequences and opportunities. Outlined below are a range of steps that are needed to be considered as we move to a post pandemic world.
There is no doubt that the power of technological innovation is to the fore as a result of the pandemic. Covid-19-related themes from remote working to enhanced digital interaction have been rolled out and will continue to dominate our business performance. Sustainability, supply chain optimisation and diversity in our workforce will also continue to be at the forefront of all our decision making. Upskilling of our workforce to meet the growing demands of new technologies will be top on the agenda.
In 2020 we have experienced the power of technological innovation due to necessities resulting from the pandemic. The future of work is no longer a 9-5 routine, with technology allowing for more flexible hours and bridging the gap left behind by limited air travel with the introduction of Zoom and other technological advancements.
We have already implemented blockchain to provide real-time oversight of warehousing and distribution processes to our customers. It also enables our operations to eliminate the risk of human error and to optimise operations with automatic vehicle scheduling, which results in fewer and more carbon-efficient trips. With blockchain capability and real time oversight it was easy to adapt the transition from a just-in-time to just-in-case logistics model.
Maritime logistics has always been customer-focused, providing safe and reliable transportation of customers’ products. Many difficulties in the supply chain and particularly for crew changes arose last year. The measures and responses to this which enabled the business to continue can be utilised in a post-Covid environment with more automation and remote access becoming the norm rather than a necessity.
Smart ship technology is also being studied for our maritime logistics business to improve bunker consumptions by studying and leveraging tidal movements to plot vessels passages to gain fuel efficiency and predictive analysis for timely maintenance, helping avoid costly vessel downtime and off hires.
We are already exploring ways of meeting the guidelines of the EU’s emissions trading systems for maritime transport to meet global climate control ambitions by 2030 in support of our ambition to be a sustainable business and to play a visible role in promoting the UN Sustainable Development Goals.
Zero fatalities in over 150 million kilometres covered is an amazing statistic by any standard. Having implemented the Driver Fatigue Management System in your vehicles in 2018, what’s next on the evolutionary ladder in terms of tech upgrades at Tristar?
Our target is Goal Zero – this means no fatalities, no damage to property and no harm to the environment. Safety in operation is a 24/7 business at Tristar and must start at the very top or else it will not work. Technology is definitely a great support in implementation but it is the culture that is key in driving safety in any organisation.
We have leveraged technology to enable real-time oversight of driver performance and to assist the driver to better manage unexpected issues on the road, which could be beyond the driver’s control. For example our rollover warning devices give the driver an advance warning if the vehicle is likely to overturn, due to shift of the centre of gravity.
The fatigue monitoring system prevents the driver from dozing at the wheel by vibrating the seat if his eyelids close for more than one second.
In our warehouse operations, we have installed Collision Sentry devices as there are still many incidents in warehousing operations due to man and machine collision. The device is a collision avoidance system that helps to reduce or eliminate blind corner collisions between forklifts and pedestrians. It is designed to detect motion on both sides of the corner where it is mounted, providing a sound beep and visual warning signal, much like a flashing traffic light.
We have also started more interactive toolbox sessions with warehouse and workshop personnel by involving them to participate in identifying risks with their own creative ideas and share them during the sessions, which were predominantly the responsibility of the Safety Team or supervisors when they conduct walkabouts.
As an industry benchmark, how do you read the future of logistics here in the UAE? What’s the next big trend on the horizon and how is Tristar primed to manage the same?
The future of supply chains is being transformed globally by the development of a more digitalized environment, where value chains are connected, and distribution systems are increasingly intelligent, autonomous and automated. The Covid-19 pandemic amplified the need for supply chain organizations to seek tools that help them make better and more informed decisions faster. Opportunities are often born out of new customer needs and so listening to customers is vital.
Understanding emerging customer needs and patterns will be critical for the future of logistics. For example, remote working could have significant consequences on a variety of sectors in the economy including transportation and logistics. ●