… Urges investors to focus on asset utilisation, customer demand, and returns on capital
… SIFAX Group Chairman warns against asset-driven investments, highlights warehousing, cold-chain, and tech as key opportunities
By Rashidat O. Okunlade | Lagos
The Chairman of SIFAX Group, Dr. Taiwo Afolabi, has urged investors seeking opportunities in Nigeria’s logistics sector to prioritize cargo demand, efficient operations, and cash flow over the acquisition of trucks, warehouses, and other physical assets.
Afolabi said the profitability and sustainability of logistics investments depended largely on customer demand, productive asset utilization, and the ability to generate returns on committed capital.
He gave the advice while delivering a speech at the Odu’a Investment Company Limited’s 2026 Annual Strategy Retreat, held at the International Institute of Tropical Agriculture (IITA), Moniya, Ibadan. Afolabi was represented at the event by Oliver Omajuwa, Deputy Director, Strategy and Operations.
Beyond Physical Assets
The SIFAX Group chairman identified warehousing, transportation, agricultural aggregation, cold-chain services, technology, and specialized logistics as viable investment opportunities, urging investors to identify gaps across the value chain before making an investment decision.
He advised Odu’a Investment Company Limited to examine the transportation, storage, and distribution requirements of its portfolio companies, noting that their combined needs could provide a foundation for developing a shared logistics platform to support the company’s investment ecosystem.
According to him, opportunities in port logistics extend beyond terminal operations to cargo handling, freight forwarding, customs clearing, equipment maintenance, storage, and export consolidation.
He explained that integrating these services could improve cargo movement, reduce operational complexities, and enable customers to access multiple logistics solutions without dealing with several service providers.
The Agricultural Logistics Gap
On agricultural logistics, Afolabi noted that increased production would yield limited economic benefits without adequate infrastructure for aggregation, preservation, storage, and distribution.
He identified cold rooms, temperature-controlled transportation, and strategically located warehouses as critical investments capable of connecting agricultural production to processing facilities, retail markets, and export channels.
The chairman further explained that investors could explore greenfield developments, acquisitions, or strategic partnerships with established operators, depending on their financial capacity, technical expertise, and identified market opportunities.
He added that technology-driven solutions, particularly cargo tracking, inventory management, and operational monitoring systems, could improve visibility, efficiency, and service delivery across the logistics value chain.
A Caution Against ‘Asset Ownership’
Afolabi, however, cautioned against investment decisions driven primarily by asset ownership, stressing that the acquisition of trucks, construction of warehouses, or procurement of equipment do not automatically guarantee profitability.
He urged prospective investors to evaluate customer requirements, asset utilization, cash conversion, and returns on invested capital before committing resources to logistics ventures.
Why It Matters
In Nigeria’s logistics sector, the prevailing mindset among many investors is heavily skewed towards physical asset acquisition. A wealthy individual or corporation buys a fleet of trucks or builds a massive warehouse and assumes that profitability will automatically follow. Dr. Taiwo Afolabi’s advice at the Odu’a Investment retreat is a critical, reality-checking intervention.
The logistics business is fundamentally a service business. Without a clear understanding of cargo demand, route efficiency, and the actual cost of operations, expensive assets become liabilities that depreciate while sitting idle. Afolabi’s emphasis on cash flow and returns on invested capital is a lesson that resonates far beyond logistics, it is the foundational principle of successful investing.
Furthermore, his breakdown of the agricultural logistics gap is particularly relevant to Nigeria’s food security crisis. The country loses billions of naira annually due to post-harvest losses. The lack of cold-chain infrastructure and aggregation centers means that food rots in rural areas while urban centers face shortages and high prices. Investors who heed Afolabi’s advice to focus on cold rooms and temperature-controlled transport could not only build highly profitable businesses but also contribute directly to national food security.
Finally, the suggestion for Odu’a Investment to leverage its portfolio companies to build a shared logistics platform is a strategic masterstroke. By consolidating the logistics needs of its various subsidiaries, Odu’a can create a self-sustaining, profitable logistics arm that serves both internal and external clients.
© ROTAMEDIANEWS Digital Newspaper & BusinessEcho Magazine by ROTA Media Concepts
For advert placement, news tips and subscription enquiries, contact the Publisher/Editor-in-Chief, Rashidat Olushola Okunlade.
rotamedianews@gmail.com businessechomag@gmail.com
