Risks and cash flow are on the forefront of Mangadi Dikotla’s mind, as her company Afric Oil continues its expansion path. “We’re growing and sometimes you tend to forget about risks and all you see is opportunities,” the CFO of the country’s first BEE oil trading company says. “I consider that my most important job at the moment, along with ensuring a healthy cash flow of course”
Dikotla is a chartered accountant with a background as a tax specialist, rising through the ranks at Total South Africa to become its Acting Group Tax Manager. She says she realized she wanted to work more closely with a business. “I wanted to be more involved in understanding what is happening throughout a company.” In October 2011 Dikotla joined Afric Oil and she says “so far, so good”.
Afric Oil was launched in 1994 and was the first black owned and operated oil company to market and sell refined oil products in South Africa. The company deals in a broad range of refined oil products ranging from diesel, petrol and jet fuel, through to paraffin and lubricants. “When I joined the company, it had just gone through a difficult phase,” Dikotla recalls. “We were battling the worldwide financial crisis and there were also a lot of changes within the business. We used to be part of Engen, with all the associated support and access to Engen’s infrastructure and securities – that came to an end.”
Dikotla explains that Afric Oil had to rebuild the company based on a new model. “We had to look for more suppliers and funding from banks since we now we had to work on a 100 percent commercial basis. So there was a lot of negotiating with Engen, other oil suppliers and banks. Today we buy from five suppliers, which include Engen, Sasol and smaller parties. We’re also talking to Shell about the supply of their product and we’re importing, although that brings its own issues – especially tax-related ones.”
Although Afric Oil deals with big sums of money, it has less than thirty staff members. To become a “strong, independent company” the firm first had to learn to stand on its own feet, says Dikotla. “When Afric Oil started it was advantageous to have Engen on our side. Because of that partner we have been able to establish a strong brand in the industry. When the ties were cut, we had to learn how the industry works, which is necessary because we can’t lean on Engen’s input anymore. It has been difficult for the company; people have had to appreciate change. We had to make everybody understand that this is the way forward.”
Now Dikotla and her colleagues have secured more suppliers, securing a bigger share of the “bulk commercial users” has become priority number one, says the CFO. “It’s important to have a strong base to be able to get and keep big clients, like Transnet. We especially focus on mining, institutions and parastatals. We have to go out to banks and look for money to finance deals and to invest in infrastructure. We don’t own any depots, which is hampering us. That is why we’re looking into opportunities to invest in one.”
Dikotla recommends that young, aspiring finance professionals “get a qualification, get a solid foundation and the right experience”. Patience is also important, she says. “It takes time. It is a good idea to make a roadmap for yourself. As a CFO you are not a specialist but a generalist, so you have to make sure you get the right exposure – in my case I had to leave the tax environment. I always try to learn from my colleagues from different departments and it’s important not to be afraid to approach challenges and opportunities head on.”
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