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Odu’a Investment Company Limited recently relocated its headquarters to the Cocoa House Complex, Ibadan. The Group Managing Director of the investment holding company for the South-West states, Mr Adebayo Jimoh, in this interview with
Adekunle Tayo and Chukwuma Okparaocha, explains the motive behind the relocation and the series of strides taken by his regime to reposition the company in his drive at making it a platform for agricultural and industrial growth of the South-West. Excerpts:
Having being in the saddle of leadership of Odu’a Investment Company for about five years, everyone is delighted at your various achievements. The company’s headquarters recently relocated to Cocoa House, Dugbe Ibadan, what prompted this move, will it be permanent or is it something that will change with time?
Firstly, I welcome you all to this very befitting Cocoa House Office Complex that was bequeathed to us by our forefathers in 1965; some few years after independence. It was a time when Nigeria was operating as a federal system of government with each region having an autonomy in terms of its own economic growth and pattern.
Our forefathers, at that time, identified that the greatest strength of Western Nigeria was agriculture. If agriculture is your strength, the revenue from agriculture must be used in providing infrastructure that will outlive people, and infrastructure that will create revenue for government’s operational running. It is not like oil that every month or everyday is drilled.
Agriculture is seasonal and revenue is got from agriculture, such revenue should be tied to projects that will provide recurrent revenue that will be used for running the government, and that is why, strategically, our founding fathers started developing complexes, industrial estates, recreational services and other services like WNTV (now NTA).
Look at the Ikeja industrial estate, which empowers people and creates jobs. But, immediately we discovered oil, we abandoned most of these infrastructure; we left them to decay, forgetting that properties are like human beings; they breathe, they live and they have life span. Also, there is always supposed to be a maintenance schedule or repairs and infrastructural changes for properties, but we just abandoned them.
When I got into Odu’a five years ago, I discovered that the greatest strength of Odu’a was in property; not in shares, because I saw that the shares issue was just like a balloon waiting to burst. In our company, I keep telling people that I have identified that we have three legs of revenue drive: the first leg is property which is supposed to be the right leg, the second leg is dividends from companies that we have investments in, and the third leg is shares trading from the stock market.
I saw that two legs were very weak and they were likely going to fall, so I said we should focus on one leg - property. The first thing we did was to introduce a pilot scheme at Lugard Avenue, Ikoyi, Lagos State. In this place, we decided to build an apartment of flats which was commissioned in 2008. Each of these apartments now generate $50,000.
We also decided to look at Ibadan as a pilot scheme. We identified one property at Iyaganku, which we named “Orange Court”, the one at Ikoyi is called “Odua House; prior to this point, Orange Court had just a three-bedroom apartment on 5,000sq metre. And the rental that people were happy taking was N300,000 per annum. The person there had a large a hectare of land for poultry and I asked him to be given a quit notice.
My first two years were a battle; I had a lot of press war. Everybody thought Adebayo had come to sell Odu’a’s properties, but I told them that I had come to add value to Odu’a’s properties, but they didn’t understand the concept. So, we brought down the building - a colonial building, and on that Orange court today, we’ve built 12 apartments. We got a loan from the bank to achieve this. Our strategy was to sell 50% of the 12 apartments to pay back the loan, and for the remaining six apartments, we take about one million naira from our tenants as rents, as against N300,000 and we have quality tenants.
We’ve started the second scheme, while the third one is coming up at Agodi GRA.
Then, I said I would focus on commercial development. The other two legs are weak and they will continue to be weak until the cost of doing business in Nigeria is reduced when infrastructural growth comes in. Until industries make enough money to pay dividends, but as we are now, industries are struggling very hard to survive. The operating capacity is below 40% in most industries.
So, we went into commercials just to sensitise people. I saw that it was a dis-service to the Yoruba nation when you have the Sketch premises wasting; then it had been abandoned for 12 years. I made a presentation to the governors that I wanted to put up a mall where Yorubas and Nigerians could have comfort shopping just like they have it in Lagos. So, we went into the concept of commercial development.
Therefore, the Heritage Mall, which is currently under construction, will be due for completion mid-next year. Cocoa House project had been ongoing for about two years. We identified four key areas; the sewage that was installed in 1962 was what we had been using. It was blocked sometime ago and we had to break the entire sewage system. Now we have a biological sewage system for it.
We have also put in a new industrial borehole to solve the problem of water. We now have a capacity for 200,000 litres of water at Cocoa House. We also saw the need for a new large space for parking. At the mall, there is an underground parking space for 200 cars. We also provided two new lifts. But we have not finished, because our former office will be redesigned to accommodate shopping activities like eateries. We have concluded arrangements with Shoprite and others, now, all the good things in Lagos will now be in Cocoa House. I am not doing anything new; in the 70’s there was Kingsway and UTC, so why can we not bring back the good old days?
If our forefathers could do this in the 60s, I think we are only putting icing on the cake, and that has been my focus.
This complex could be enough to pay the salary of all my staff, and it is a dis-service for us to have abandoned what our forefathers gave us to maintain.
So, what is the occupancy rate now?
When we came in, it was less 10%, but our target is that by the end of December, we should get to about 40% and by the middle of next year, we should have attained our 100% occupancy rate. But, we are being selective; we have actually sent out a lot of people. It has to be corporate, institutional tenants. We have intentionally increased our rate to N5,000 per square metre to reflect the value which we have added.
Odu’a is involved in an academy called Odu’a Farmers Academy. What prompted this idea and what do you hope to achieve with the project?
In 2007, both the FG and all the states, especially Odua states, had, as one of their major agenda, food secuirty. But food security cannot be achieved just by mentioning it on paper work. Any nation that cannot feed its people is not fit to survive as a nation.
We now identified the need to train young and willing entrepreneurs who want to take commercial farming as an occupation.
But, such people need support, training, supervision and funding. We have identified these four criteria. In terms of training, we brought a concept from South Africa; the module we are using is borrowed from South Africa. The modules cover all aspects of agriculture. It is purely commercial, and each trainee has a demonstration farm on site.
I discovered, through visits to all our states, that there is no Yoruba state that does not have an old, abandoned farm settlement. So, we are not doing anything new. If in the 60’s, they could put up all those farm settlements, but when we saw oil, we just abandoned them. What Odu’a has done is to invest a lot of money in each of the academy. Last year, we invested about N50 million, to renovate, buy some equipment, including laboratory equipment as well as getting some lecturers who will train the students. But, some states said that they already had their own farm centres, because they did not understand our module, but now, they are coming back, and by the grace of God, we are going to extend this Farmers’ Academyto all Odua states. so, we started with the pilot scheme; one at Ede, Osun State and Awe, in Oyo State.
The first set got admitted last year October and they are actually graduating now, the interesting thing about this is that the Federal Government institution have already bought into this idea. CBN has come about two times to give the students lectures on entrepreneural skills and development. Nigerian Agricultural Rural Credit Development Bank (NARCDB) has now partnered with us.
The certificate of each student guarentees him a loan after graduation. Each of the graduands, by the grace of God, will be given cheques to start his farming.
However, we are not going to leave them aloose, Odu’a, through the local governments, will provide for the students large acres of land.
A lot of them dropped riding okadas to enroll in the school. One of the students selling vegetables told me that he was making more money everyday than what he was making when he was riding okada.
So, what we are trying to do is to empower our people and to prepare them for the revolution ahead. It is going to be a very big one in terms of survival, and for us in this part of the country, we have to go into agricultural revolution. Our fathers who are on the farm are getting old, therefore, if you want the younger ones to take over from them, they cannot use the old practice, so, the academy is providing them with the new practice, and afterwards they will be given loan and taught how to write business plans, they all now have bank accounts with NARCDB; they are becoming more responsible. They are also being taught how to manage post-harvest of their farm produce.
Now, one state, because of what it saw, took it upon itself to provide electricity to one of our farmers’ academy. Also, each local government in the states has been asked to enroll a minimum of three students. Our youths will become properly engaged. By the time we are able to have this academy in all the five states, we are going back to the old days of people having skills in planting, in managing their farms, skills in harvesting and marketing. So, at the academy they are taught all these basic things. Also, because of the link with NARCDB, they are now into community and they have FADAMA support.
So, it is a whole value chain that we are creating. I’ll say it again that we are doing nothing new, but we are bringing back the memories of our forefathers, so that at the end of the day, we will not starve. It has been estimated that by the year 2020,the populationof Nigeria will be close to 200 million; how are we going to feed them if we don’t prepare youths to go into agriculture. So that is the essence of the Farmers Academy.
There appears to be a reduction in the number of associate companies and subsidiaries of Odu’a, is it a deliberate strategic plan to whittle down the involvement of Odu’a in such companies, or is it because of economic recession?
We cannot hide it from these two angles. When I came into this company, I looked at the growth sectors. We identified five major areas of growth sectors; real estate, agriculture, financials, manufacturing and power.
For the first one – real estate, our WemaBod Estate had been underperforming. It is now going into real property development.
For the second sector, which is services which include hotels, banks and telecoms, we intend to bring in equity partners who will bring in funds and manage our hotels to international standard. By that time, our equity in these companies will no longer be 100%.
You will now see a mixture of Nigerian and foreigners running Premier and Lagos Airport Hotels. I have sold this philosophy to all my people and they all agree with me that it is better to have 10% equity in a viable company than 100% in a dead company.
On manufacturing, when I came on board, Nigeria Wire and Cable was under-receivership; it was closed. There were snakes and other reptiles in their machines. Now, the company is back, but we have to whittle down our equity from 70% to about 20%. We have also done the same thing to Askar Paints. We partnered with D’Alberto, which is a construction company, but they are still trying to settle down because of the recession.
In the financial sector, it is not as if our involvement in Wema Bank and Great Nigeria Investment Company, (GNIC) has thinned down, the FG passed a policy to say that no government or government-related business should have more than 10% equity in business, because it was discovered that many governments were killing instead of helping such businesses.
Where do you see Odu’a Investment Company in the next five years?
In the next five years, we want to see Odu’a providing the platform for major agricultural and industrial growth through industries that have local contents as the major source of raw materials being positioned in all the Odu’a states. We want to be the major catalyst for bringing all these industries up in our localty. Also, we want to empower our people. We have a lot of other plans, but these will be the centre.
What has been the CSR contribution of Odu’a Investment Company so far?
Apart from the normal responsibilities of attending to immediate activities, we have a policy of nurturing future leaders by instituting a scholarship scheme.
To date, over 400 Yorubas in institutions of higher learning have benefitted from this scheme.
Every session, we give each beneficiary N100,000.
We also support our institution through the support for our mother tongue – Yoruba. We have constituted a centre called Yoruba Centre of Excellence, which is managed by seasoned Yoruba leaders selected from each of the five states. It is targeted at supporting the development and speaking of the Yoruba language. We’ve done some competitions on Yoruba essays. We are also supporting sports.
What is the update on Cocaoa Industry?
One major reason we sought and got a seat in Abuja – Odu’a was the first company to have a seat on the Nigeria Investment Promotion Council (NIPC) – was to get first hand investors coming into Nigeria looking more into the South West. The Cocoa Industry needs a total overhaul. Penultimate week, a group came from France, and, I also had a meeting with another group from China to look at the Cocoa Industry. We’ve taken the decision that we are only going to open the Cocoa Industry in a big way with foreign partners that will come in and use our local raw materials for food processing. But Odu’a as a company, doesn’t have the capacity, it doesn’t have the technology, or the resources to go into it.
Among your stakeholders, Ondo and Ekiti States could be not be said to have been feeling your impact, how are you addressing this?
Actually, I will call it a cycle. For any organisation to succeed, it must define its objectives. Our objectives in Odu’a is to be a company that will be responsible and that will be able to pay our stakeholders’ dividends through the revenue drive.
When we launched ‘O’ net in 2007, all the Odu’a states were happy with the activities of the company, but because of the limitation in the type of licence we have, which is just a regional licence, it was not sustainable.
But Ekiti, Ondo and Osun States, you cannot say these states physically have Odua’s presence. One thinking we had when we wantedto start the farmers’ academy was that those would be places where we could really grow the farmers’ academy, because those are the agrarian and food basket of the South- West, but unfortunately, Ondo and Ekiti did not buy into the farmers academy. But now, with the administration in place, they are communicating and saying they are prepared and we are going there.Share