The 45th-anniversary lecture of Odu’a Investment Company Limited (OICL) last Friday at the Lagos Airport Hotel, Ikeja, was quite a colourful event. It was a gathering of some of Nigeria’s best in royalty, politics, commerce and education. The ambience was excellent, the speeches were inspiring, the entertainment was exhilarating and the organization was impeccable. Nothing less would have sufficed: Odu’a Group symbolises the South West, the nation’s trailblazer.
Although the Group was formed in 1976 after the creation of Oyo, Ogun and Ondo states from the old Western State, many of the companies that constitute Odu’a Investment Company Limited predate the holding company. A good number of the businesses were set up by the Western Region government under the premiership of Chief Obafemi Awolowo, as a vehicle to expand the economy and create wealth for the people of the region. The government strategically established the secondary industries for four major reasons; to convert agricultural materials to finished products, to create employment opportunities for citizens of the region, to reduce dependence on imported items and to generate revenue for the government to fund its electoral promises. Financial institutions were established to raise funds for businesses and individuals, hotels were set up to promote tourism, and real estate companies were founded to improve life and living. Those companies achieved the essence of their formation by contributing either directly or indirectly to improving a lot of the Western Region and its citizens.
Over the years, many other companies have been added to the ones set up by the Western Region government with the Group branching out to various sectors of the economy. But the times are changing while market realities are also shifting. New industries have emerged, the world has become very flat and the flow of investible funds towards Africa has increased. To take advantage of the emerging opportunities, the board and management of Odu’a Investment Company Limited chose to make the current vision of the Group, which is to leap from being a regional player to a world-class conglomerate, the focus of the anniversary lecture.
Speaking on the theme From Regional Player to a Global Powerhouse, Mr Dotun Sulaiman, the Guest Speaker, while noting that the Group had not achieved as much as it could have, said he would have preferred OICL being more proactive in taking business decisions that would have created more value for the people.
Mr Sulaiman argued that retaining the form of a conglomerate would not, in the long run, bring maximum benefit to the organization and the people. He then suggested that the board should consider turning the conglomerate into a sovereign wealth fund.
He added, “Through this mechanism, the six South-West states will set aside an agreed amount every budget cycle to be aggregated and professionally invested for the benefit of future generations.”
The owner state governors, who were represented at the event, promised to keep on supporting the conglomerate to ensure that it delivers on its mandate of being an investment vehicle and a growth engine for the South West.
In a speech read on his behalf, the Lagos State governor, Mr Babajide Sanwo-Olu, described the theme of the anniversary lecture as very apt and extremely important as all hands must be on deck to scale up and lift the company to a global powerhouse.
The governor, represented by his deputy, Dr Obafemi Hamzat, said all the stakeholders had a responsibility to accelerate the process of transforming the legacy and the vision of the founding fathers of the company to make it better.
While congratulating the management of Odu’a Investment for keeping the organization alive after 45 years, he stressed the importance of accelerating the objective of setting up the company to meet up with the challenges bedeviling the country.
Sanwo-Olu called on the board and management to concentrate on the agriculture value chain, adding that investing in agriculture was critical to the survival of the region.
In her goodwill message, Dr Olatokunbo Awolowo Dosumu, daughter of the former Premier of Western Region, Chief Obafemi Awolowo, lauded the board and management of the company for making the company a going concern.
She said, “Despite some major challenges over the years, I must salute the resolve of the current governors of the six states which today make up the old Western Region for three reasons.
“Firstly, Lagos State chose to re-align with and has been admitted back to the fold. The significance of this move is huge, on several levels. Secondly, you have decided to allow the company to set up appropriate governance structures, so that it can be administered in accordance with global corporate best practices. This, I have found out, is already having a tremendous impact on the prosperity of the company and its shareholders. Thirdly, your choice of a stellar Board of Directors with reputable career track records and demonstrable competence is a wonderful reminder of the Awo ethos.
“Consequently, the Board and Management are gradually piloting the company towards rebirth and regeneration such that it is emerging from its challenging years and is expanding its portfolio into hitherto uncharted business sectors. The Company is, indeed, set to move into the future as a global player. Again, Chief Awolowo would be proud.
“We should remind ourselves, constantly, that the purpose for which this aspect of his legacy was created still subsists. May the legacy, therefore, continue to endure.
“Permit me to end this goodwill message with an excerpt from a piece written by Professor Hezekiah Oluwasanmi in January 1963: ‘…it can be said with absolute confidence…that the work of Chief Awolowo in Western Nigeria will remain a monument to brilliant planning and administrative genius.’”
Afenifere leader, Chief Ayo Adebanjo, in his goodwill message, called for the restructuring of the country, pointing out that the practice of federalism before and shortly after independence gave the regions the opportunity to utilize the resources in their domain for the benefit of their people.
According to the elder statesman, were it not for the practice of federalism, it would have been impossible for Chief Awolowo to establish the businesses that formed the bedrock of Odu’a Group.
Speaking on the plan to turn the Group into a global powerhouse, the board chairman, Dr Segun Aina, said, “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 added, “As part of efforts to actualise our objective, we have, in the last 18 months, creating new subsidiaries, such as South West Agricultural Company (SWAGCO Ltd), and South West Innovation and Technology (SWIT). We also participated in the 2020 Federal Government Marginal Field Bidding process and was successfully awarded a field with one other partner, and an operating company — BITA Exploration & Production Ltd SPV incorporated to drive this initiative.
“As we commemorate the 45th Anniversary of Odu’a Investment Company Ltd today, we look ahead over the next five years and beyond and what we see is a golden opportunity to build a legacy institution managed and supported by the best and the brightest of our people. The future we see is one in which we all work together to facilitate the success of the company and achieve significant value for all its stakeholders.”
Earlier in his welcome address, the Group Managing Director, Mr Adewale Raji, said, “We have carefully crafted this anniversary to not just commemorate how far we have come since we were incorporated 45 years ago, but to paint a picture of how far we hope to go.”
The journey to change the OCIL narrative from a struggling conglomerate to a prosperous holding company started with the appointment of Mr Adewale Raji as GMD. For six straight years before he assumed office, the conglomerate did not pay any dividend to its shareholders. But right from his first full year in the saddle, he returned the company to profitability and has ensured payment of dividends.
That did not happen as a matter of course. To turn the tide, Raji who assumed office on June 1, 2014, invited KPMG Advisory Services to facilitate a brainstorming session for top management staff of the holding company as well as the managing directors of all its subsidiaries. At the end of the exercise, the conglomerate came up with a five-year (2015-2019) strategic plan which included growing the business from N4.5b to N20billion with an underlining 15 per cent profit before tax.
To achieve these objectives, OICL identified its subsidiaries with capacity for growth and bolstered their ability by injecting fresh blood while boosting the aptitude of the existing staff members through training. These interventions helped subsidiaries such as Wemabod Estates Limited as well as Glanvill Enthoven Insurance Brokers and Pension Consultants to improve on their innovation, enterprise, customer focus, market share and effectiveness. The Group also identified Lafarge Africa Plc as a company with great potentialities, so it increased its equity in the company by N1.63 billion during the company’s Rights Issue of 2017.
Knowing the capacity of the manufacturing sector to facilitate growth for the group, Odu’a put measures in place to revive some of its moribund manufacturing enterprises. It also went into partnership with Westlink to establish the Westlink Integrated Agriculture Limited.
The Group similarly set the process in motion to revitalize its hotels to make them competitive in the ever-dynamic industry. It expressed the desire to have equity ownership of its three hotels (Lagos Airport Hotel, Premier Hotel and Lafia Hotel) with capable investors in exchange for securing long-term investment for the upgrading of the hotel facilities and establishment of management affiliation with international hotel chains to drive excellent customer service, brand recognition and sustainable profitability.
Given what he accomplished over a period, it was not a surprise that he got his appointment renewed for a second tenure.
But if the Raji administration initiated the move to improve the profitability and relevance of the Group, the emergence of Dr Segun Aina,OFR as the board chairman has raised the ante with his insistence on adherence to corporate governance and a lean structure for the company. With the coming of Dr Aina, the management has been strengthened with the appointment of executive directors on the board with independent directors. The appointments have increased the effectiveness of the management and the capacity of the board.
To concretize the company’s growth plan, the board under Dr Aina has come up with the SRC 2025, which is the Group’s plan to Sweat its assets, Revive its ailing companies and Create new value over the next five years. SRC 2025 is already bearing fruits as it is the harbinger of SWAGCO, SWIT and BITA. It also gave birth to the vision to turn Odu’a into a world-class conglomerate and transform it from a regional player into a global powerhouse.
One of the major conditions for running a prosperous business is having a strong and knowledgeable board as well as effective and result-oriented management. Now that Odu’a Investment Company Limited can boast of both, the dream of turning the pride of the West to the bride of the World is within reach.
By: Sulaimon Olanrewaju (Business Editor, Nigerian Tribune Newspaper) Nov 15, 2021