Shaetonhodi manoeuvres TransNamib’s train to profitability
By Desie Heita

John Shaetonhodi, the chief executive officer of TransNamib Holdings, has always emitted an aura of confidence, especially with the direction in which he is steering the company. He is so confident that in his first interview with the Economist in 2003 -just after the implementation of the company's turnaround strategy - he said “this year we will make a profit.” And true to his word that financial year's annual report showed that TransNamib registered an overall profit of N$80 million, although the profit was largely due to a tax write-off of about N$79 million. This week, Shaetonhodi said the turn-around strategy has been very successful. “Now it is a question of growing and sustaining profit to between N$20 million and N$30 million,” he said. And for this year, Shaetonhodi said the company will record a profit of N$26 million. Last year it was at N$21.4 million. When he took the driver's seat at TransNamib in 2002, Shaetonhodi found a bleeding company that had never made an operation profit since 1988 had accumulated losses in excess of N$80 million. Its key assets to business operations were old and carried a high service maintenance bill. Part of the problem, said Shaetonhodi, was the legacy of the company which in the end gave TransNamib a bundle of business units.

John Shaetonhodi, CEO of TransNamib.

“It ended up running everything, [almost] all the transport modes in the country,” he said. It was in railway, road transport, airport, and seaport. After all the units were unbundled, TransNamib was left with railway and road transport business units. But still the company was not making money. The turn-around strategy, which the management called Tanaula Project (an Oshiwambo word for turn-around), focused on eliminating costs and growing profit. And surprisingly, the management did not look at labour costs, which is usually the most logical and easier step to take when eliminating costs. They looked at the service rendered, which was horrendous at the time, and the tariffs charged. “We had to improve our service dramatically.” The company had a high case of late deliveries, and lost packages. “We incurred a huge bill in insurance payments,” said Shaetonhodi. The Tanaula project cost about N$100 million, which was spent on getting new locomotives, a state of the art information technology system. TransNamib obtained a loan of US$31 million (about N$200 million) from the Chinese government to purchase 17 locomotives, 30 fuel rail tankers, 152 rail wagons, sulphuric acid tankers and barrels.

The items are currently under production in China. In the process of turning the company around, Shaetonhodi did not only incur profit, but also managed to have himself questioned over his management style. TransNamib made headlines in newspapers with axed managers taking the company to the labour court. In some cases TransNamib has been ordered to reinstate the employees. While Shaetonhodi concurs that this has given the company a bad image, he partly blames the media for reporting only on the bad things instead of looking at the good achievements. “I guess when you are doing good people will always have a problem with it,” he said. He gives the impression that the media does not like him. “No they do not,” he said. So what happened? “There was no discipline at TransNamib. Employees came and went as they felt. We had to introduce a code of conduct and enforce it. Supervisors were not disciplining employees, so they were made to understand that it is their role to discipline and enforce the code of conduct,” he said. But what resulted in court cases? “Some people thought they were sacrosanct, untouchable, and obviously they went to the labour court to challenge their dismissal.” Shaetonhodi said, unfortunately, the media does not look at what happened. Even politicians came in to ascertain what the media is reporting. “But this does not mean we did something wrong. We were being fair. There was a lot of bad things and theft,” he said.