Business
Odu’a Investment Company restrategises at 45
By AYOOLA OLAOLUWA
The pride of South West heritage, the Odu’a Investments Company Limited, is back from the brink, after surviving years of stagnation and unprofitability occasioned by gross mismanagement by past administrators.
The group, it would be recalled, was incorporated as a limited liability company in July 1976 to take over the business interests of the former Western State of Nigeria, now comprising Oyo, Ogun, Ondo, Osun, Ekiti States and much Lagos.
While the going was good, the conglomerate which had substantial investments in manufacturing, real estate, food and beverages, agriculture and agribusiness, oil and gas, hospitality, construction, printing and publishing, equipment leasing, financial services, logistics, health care and telecoms, dominated the nation’s economic space like a colossus.
Apart from leading manufacturing companies such as the Nigerian Wire and Cable, Cocoa Industries Limited, NIPOL, WEMA Bank, Lafarge (WAPCO), Unilever, Tower Aluminium and Nigerite, Askar Paints Limited, Epe Plywood, Lafia Canning Factory, Crittall Hope, Ire Clay Products Ltd, SKG-Pharma and a host of others which the group wholly owned or has interest in, it also boasts of imposing legacies such as Western House, Marina, Bristol Hotel, Lagos, Cocoa and Aje Houses in Ibadan, Premier Hotel, Lagos Airport Hotel, Wemabod Estate, among many others.
The company also owns substantial properties in choice locations in Ikeja residential/industrial estates and Apapa in Lagos as well as several residential buildings in Ibadan including Orange Court and Almond Court.
These companies and manufacturing giants, apart from providing the much needed income for the owner states, also created employment opportunities for millions of youths from the region.
However, with the coming to power of the military in 1983, the fortune of the once boisterous conglomerate nosedived and for several years, it tethered towards bankruptcy and eventual collapse. From about seventeen subsidiaries where it maintained majority interest in 1985, it had decreased to seven subsidiaries in 2019. The manufacturing and industrial interests of the firm have also shrunk considerably, with most of its income generated from leases earned from its properties.
According to a former staffer of the company, Otunba Rotimi Adedayo, the military almost destroyed the Oodua group with their pillaging.
“Immediately they came to power in 1983, they started pillaging the wealth of the company. They send their families and friends to Western Hotels (Premier and Lafia Hotels) and the Lagos Airport Hotel to be accommodated and fed without paying for the services. A governor even retained a suite in one of the hotels for the three year period he was in power.
“Drums of paints were collected freely from Askar Paints for their own private properties. The same applied at the Nigerian Wire and Cables and other companies. They were almost bled to death by their military rulers and their civilian collaborators.
“As if that was not enough, they started to install their incompetent surrogates to head companies under the group who packaged returns (money) for them every month. Due to their incompetence and massive looting, the companies were soon ran aground.”
The political class that took over from the military in 1999 did not also help matters as they were more concerned with which state will fill top positions in the conglomerate.
While the decay lasted, the company, which recorded strings of losses for close to twenty years, was unable to pay dividends to its owners.
Troubled by the declining fortunes of the company, its owners came together in 2014 to unveil a five-year growth plan meant to grow the group’s business in five years (2015-2019).
The five-year growth plan included consolidating on existing businesses and diversifying into high growth and profitable sectors of the economy to realise the strategic objectives of creating value for the shareholders and delivering social impact to the South West states.
Lagos had officially joined the O’odua Group, with the acquisition of 115m shares, thus growing the share equity of the company to 690 million. The deal also allow Lagos to acquire land in other South West states for massive rice production.
Apart from these measures, the Oodua Group owners also appointed a new management team led by the current Group Managing Director (GMD), Mr. Adewale Raji, to drive the growth of the company.
The new helmsman had during his inauguration lamented that the company, whose assets base is in excess of N80billion, generated a little above N1billion.
“In all these years, no dividend was paid to shareholders which are an aberration in a business”, Raji had said at his inauguration in 2014.
He further said that the holding company and the group had no manufacturing company in existence as the Nigeria Wire and Cable, Ibadan, Askar Paints, Ibadan, Epe Plywood Ltd, Lagos and Cocoa Industries Ltd, Ikeja had all became moribund at the time of his resumption.
BH findings revealed they owing to the numerous measures put in place by the management of the company, there has been a change of fortune in the firms businesses.
The ambitious growth strategy, especially the admission of Nigeria’s economic power base, Lagos State, into the group in March 2018, finally paid off in 2015 when the company paid N1.53 billion as cumulative dividend to its shareholders.
The positive trend continued with the earning of N698million and payment of N277million dividends to shareholders in 2016, profit after tax of N698 million in 2017, profit before tax of N849.34million and payment of N320 million dividend in 2019 and N364million dividend payments in 2020.
An elated Group Managing Chief Executive Officer of the company, Adewale Raji, had declared in 2020 that the management had changed the orientation of the company from that of a ‘rent collector’ to that of an ‘enviable conglomerate’ that can stand tall among peers like UAC, PZ Cussons and Dangote in a near future.
The company’s owners, in an apparent move to sustain growth and also reward performance, in 2020, re-appointed Raji as GMD for another five years.
BH gathered that before the five-year tenure of the GMD expired on 31st May 2019, the owners, represented by the board, had engaged the services of KPMG Advisory Services to carry out evaluation of his five years in office. In order not to create a vacuum, the board granted the CEO a six-month extension to remain in office until KPMG completes its assignment.
After receiving the green light from KPMG, the board proceeded to renew Raji’s tenure for another five years, starting from 2020.
Recently, the group rolled out the drums to its 45 years of doing business and keeping the flag flying. Speaking on the sucesses achieved by the company at a commemorative lecture held in Lagos, the Group Chairman of OICL, Dr. Segun Aina, said the management of the conglomerate was able to achieve this by leveraging on the models observed in similar institutions across the globe.
“We have redefined our vision to one that captures our ambition appropriately, which is, to be a world-class conglomerate, and a mission to deliver sustainable returns for all stakeholders enhancing the legacy for future generations,” he said.
The chairman also said the next four years would be the foundation years for the conglomerate to transform into an impact-driven organization.
“Our targets for Odu’a investment over the next four years are audacious in terms of social impact, growth in revenue, and returns on assets with various assets optimization programmes planned.”
Part of the plan, according to the chairman, include diversifying the group’s portfolio of assets beyond real estate and other subsidiaries and associates.
He further stated that the new investment initiatives would target selected secors like the financial services, transportation and logistics, healthcare, ICT and energy.
“We have the strategic intent to dilute ownership in some of the investments where we currently have 100 percent ownership while limiting our shareholding in new ventures to minority holdings as may be necessary. We are also seeking partners that will provide capital and technical expertise to run these businesses.
Other plans the company’s owners have, BH learnt, include the transformation of its real estate business, Wemabod Estate, into the leading real estate development company in the country; transformation of its hotels, Premier and Lafia Hotels in Ibadan, Oyo State and the Lagos Airport Hotel into world-class destinations by partnering with global brands.
While the owners have plans of taking the conglomerate to higher heights, they have already embarked on ambitious actions like the establishment of new business lines such as the South West Agriculture Company Limited (SWAgco), Bita Exploration and Production Limited, South West Innovation and Technology Limited (SWIT), as well as many others.
“Our agriculture investment vehicle, SwagCo, is primed to create a pool of hundreds of thousands of farmers and agro-prenuers across the states.
”SWIT on the other hand will drive our strategic partnerships, investment, and activities in the technology and digital space through investment in Techhubs, FinTechs and other ICT business, thus creating huge jobs, a new crop of techpreneurs and wealth as we also set out to support the development of a digital economy in the South West,” Aina noted.
Also speaking, the GMD of the organisation, Adewale Raji, said improvement in its financial results were driven by disciplinary operational performance and focused efforts to transform its business models to one in which all constituent units were operating and contributing as a proper growing concern that is responsible and discharging to the expectation of shareholders and stakeholders.
He assured shareholders that the group would increase its involvement in agriculture and agribusiness to achieve its growth, profitability and sustainability targets.
While stating that efforts were on to renew organic growth efforts at the company’s real estate and insurance brokerage firms, Wemabod Limited and Glanvill Enthoven Insurance Brokers & Pensions Consultants Limited, he vowed that there is no going back on the group’s commitment to agriculture to address food security, earn more earnings through export, job creation, as well as accelerating the industrialization of the region.
Giving his anniversary lecture, a management expert and former Country Manager of Accenture, Dotun Sulaiman, said the group was a treasure inherited from past leaders of the South-West region and that there was the need to take it to greater heights.
While urging the company to focus on its areas of strength and delve into emerging sectors of the economy, he lamented that the company had missed many investment opportunities in viable sectors like telecommunication, energy, and fintech in the past.
“The Western Region recorded many firsts many years ago, but where are we today? Though we have yielded grounds, hope is not lost. If we begin to do the right thing with our inherited treasure with O’dua Investment Company, we will definitely achieve a lot.”
On his own part, Lagos State Governor, Mr. Babajide Sanwo-Olu, tasked managers of the company to explore new areas of opportunities in the economy.
The governor advised the company to consider investments in the storage and processing of agricultural products.
Many stakeholders who spoke with Business Hallmark on the sidelines of the event in Lagos, said the decision to admit Lagos as a shareholder was the jinx breaker, as it provided the group with the much needed funds and expertise to move it forward.
“With the hundreds of billions of naira Lagos is pumping into the group, it is no suprise that the group is witnessing a ebirth. No only that, Lagos is at the forefront of innovations in the country. Look as the waste management issue, the state first commercialized it and is currently minting money from the business.
“The brain and expertise is here (Lagos) and other South West states are surely benefitting from it”, said Dr. Femi Coker, a political economist with the Osun State University.