Since the advent of Mr Adewale Raji as the Group Managing Director of Odu’a Investment Company Limited, the fortune of the company has been on the upswing despite the prevailing dire economic situation.
For over 10 years the company had failed to pay dividends to the owner states but that trend ended with the coming of Raji.
For four consecutive years now, the company has been consistent in the payment of dividends to its shareholders. At the 36th Annual General Meeting (AGM) of the conglomerate owned by the six states of the South-West geopolitical zone recently in Ibadan, the board of directors chairman, Chief Olusola Akinwumi, announced, to the exhilaration of the shareholders, that a sum of N277.778 million had been set aside as dividends to the owners. The sum, according to the Group Managing Director, brought to about N920million the total amount paid as dividend by the conglomerate over the last four years.
Before the slide that almost rendered the company unviable, Odu’a Investment was the pride of South-West people. The Group paraded leading manufacturing companies such as the Nigerian Wire and Cable, Cocoa Industries Limited, NIPOL, Askar Paints Limited, Epe Plywood, Lafia Canning Factory and a host of others. These were manufacturing giants which did not only add to the Group’s bottom line and profitability but were creating employment opportunities for the zone’s teeming youths. But at a point in the Group’s business voyage, the manufacturing companies lost their vibrancy, stagnated and headed south before eventually dying off one after the other. The demise of these companies negatively affected the fortunes of Odu’a Investment Company Limited because being the major shareholders in these companies, the Group had in them a steady source of revenue. To tackle this challenge, the holding company had to devise a new strategy. The success of the strategy has resulted in the parent company regaining its winning ways and, once again, delighting its shareholders with regular payment of dividends.
While addressing shareholders at the 36th AGM where the reports of the 2017 financial year were considered, Raji said, “Over the last few years, the board and management have dug into the Group’s rich history, listened to shareholders and stakeholders alike and consulted widely to come to the realisation that achieving sustainable growth and diversification of its income sources from preponderance of real estate assets is fundamental to securing its future.”
Consequently, the company has taken deliberate measures to widen its revenue base, increase its profitability and boost its chances of meeting its stakeholders’ expectations.
Knowing the capacity of the manufacturing sector to facilitate growth for the group, Odu’a has also put measures in place to revive some of its moribund manufacturing enterprises. According to the board chairman, Olusola Akinwumi, who is an engineer, “The company has made disciplined investment for growth opportunities. We recently embarked on the recovery of one of the moribund manufacturing outfits in the Group, Cocoa Industries Limited (CIL), for better utilization of its facilities in joint ventures.”
What Odu’a has done with CIL is to buy back the company from Emerald Packaging Company Ltd (EPCL), its majority shareholder until recently. Though initially wholly owned by Odu’a, the Group had divested 60 per cent ownership to EPCL in 1989, while the Group retained 40 per cent. In the late 1990s, CIL ran into troubled waters when it was unable to repay a bank facility. Odu’a had to rescue the company by offsetting the obligation and consequently increasing its stake in the company to 70 per cent. Odu’a Group eventually bought out EPCL and now once again, wholly owns the company. With this development, steps are underway to make the company fully functional to live the dream of the founding fathers.
Seeing that the revitalization of Odu’a Textile Mills Limited in Ado Ekiti cannot be immediately realized, Odu’a Investment Company Limited decided to turn the factory into a breeding ground for the much needed technical manpower. To this end, it signed a Memorandum of Understanding (MoU) with Afe Babalola University’s Directorate of Technological Development to transform the factory into an industrial park to train young Nigerians. For this purpose, Odu’a incorporated a special purpose vehicle educational centre within the factory to provide technical and vocational skills training to bridge technical skills gap among youths. The centre will train and award ABUAD diplomas in mechanical, electrical and civil engineering after a study period of two years.
The remaining part of the facility will be converted to incubation centres for different small and medium enterprises for the purpose of ensuring industrialization of the geopolitical zone.
Identifying agriculture as a sector with great opportunities, Odu’a Investment decided to pay more attention to it by increasing its investment in the area. According to the board chairman, Akinwumi, the Group had embarked on the commercial cultivation of tomatoes on a portion of its 3,500 hectares of land at Imeko in Ogun State. As he put it, “The ultimate is to establish a processing plant for value addition and social development of the community and overtime achieve transfer of technical expertise to competent Nigerians.”
Expatiating on this, the GMD said, “Through our newly incorporated Westlink Integrated Farms Limited, we have commenced varietal tomato cultivation at our 3,500 hectares Imeko farmland in Ogun State. The business plan is to run a model farm that also supports out-growers’ scheme where our tomato to paste processing plant will guarantee the market for all produce in the locality. This farm is supported by Fidele Aggregation Limited, a Nigerian company with the technical backing of the world-renowned Syngenta AG of Switzerland. This venture is planned to have stabilized large scale tomato cultivation for a 120-ton a day tomato to paste modular processing plant to be installed by its third year of cultivation.”
Odu’a Investment is also exploring opportunities of large scale agricultural business with some partners at Oke Ako Ekiti. To facilitate this, it incorporated The Farming Company Limited as a special purpose vehicle (SPV). According to the GMD, “The plan with our partner is to make its cultivation participatory and inclusive by integrating the contiguous communities into the implementation of the agricultural transformation to a production and processing zone.”
Serious efforts are also on to revamp the moribund Okitipupa Oil Palm Plc by partnering with others. The chairman said, “The oil palm industry requires massive investments and any future development of this plantation must be done in a sustainable manner. We hope that Ondo State Government will take advantage of the opportunities made available by the presence of a big industry like the PZ Wilmar Group.”
Odu’a is also keen on revitalizing its hotels to make them competitive in the ever dynamic industry. According to the GMD, the Group plans to share 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.
To ensure sustainable growth and profitability, Odu’a Investment is not downplaying equipping its workforce with necessary skills. To underscore this, the GMD said, “At the core of our vision for the growth, profitability and sustainability of our business is our people. Employees’ continued training and capacity building focused on fostering a culture of excellence, commercial acumen and customer-centric across all functions remain cardinal. We continue to attract talents to Odu’a Group in our areas of deficiency to ensure that we can truly turn around the fortune of the business in line with our vision and values.”
Since Odu’a Investment Company Limited has bottomed out and the worst is over, the only way for it to go is up. So, for the conglomerate, it is a new dawn, not just for the owner states, management and its employees, but also for the people of the South-West geopolitical zone and Nigerians as a whole.