44-yr-old southwest partnership holds lessons on regional economic development
The theme of this year’s Nigerian Economic Summit was “Building Partnerships for Resilience.” This arouses a certain curiosity if there is anything other geographical areas can learn from the South-west in terms of economic integration and partnership.
At the region’s Odu’a Investment Company Limited’s 38th Annual General Meeting (AGM) on 7th October, 2020, it was disclosed that 2019 profit before tax (PBT) was N889.71million and this was 5 percent higher when compared with 2018 PBT figure of N849.34million.
The meeting approved, among other resolutions, the group and holding company consolidated financial statements for the financial year ended 31st December, 2019 as well as the payment of cash dividend of N320million to its shareholders. The company, as part of its corporate governance reforms, also got shareholders approval for the appointment of two independent directors and group executive directors to strengthen the board which now has 11 members, noted a press statement last month.
This business holding with dozens of investments across different sectors is collectively owned by the six states in the southwest, and has for over 40 years been a common interest in unifying the region economically.
Odu’a Investment Company Limited is an independent private company run by an independent board of directors of seasoned professionals with vast experience in business and human resources management, according to a corporate description on its website.
In 1976, following the breaking of the Western State into three states: Oyo, Ondo and Ogun, a state implementation committee ( SIC) comprising the three military governors and their secretaries to government and heads of service was established to ensure the smooth take- off of the newly created states. Furthermore, the equitable distribution of personnel and assets of the former Western State since the Federal Government directed that where practicable, the new states should not maintain common services.
The State Implementation Committee had given a thought to the establishment of a holding company, which was to take over the supervision and monitoring of sundry investments of the former Western State that were
hitherto under the control of the Western State Industrial Investment and Credit Corporation. Such investments were over 60 in number at the time. The Economic Project Performance Unit, in collaboration with the Western State Industrial Investment and Credit Corporation, was given the duty of making necessary recommendation for the establishment of a holding company.
The committee later decided that the company be named Odu’a Investment Company Limited, and further approved that a financial provision of N7 million be made available to the company by the three state governments. This was to cover initial administrative expenses and commitments already entered into by the Western State Industrial Investment and Credit Corporation and Ministry of Industries on the existing projects. Also, part of the fund was to be used to invest further in the subsidiary companies when
desirable.
The ambition at the time was that “the company would be an octopus, probably only second in size to the UAC Group of Companies,” read part of the company’s history on its website.
The company, which was incorporated in July, 1976, and commenced business on the 1st of October of the same year, has, since inception, been operating as a conglomerate with over 70percent of her business as investment/joint ventures with reputable multinationals.
Investments within the group at its inception covered a wide spectrum of economic activities, viz; integrated textile mills, breweries, commercial banking, insurance business, real estates, livestock rearing, fisheries services, carbonated drinks, food and beverages industries, manufacturing in chemical and mechanical industries, hotel and catering, vehicle distribution, bottling and marketing of liquefied petroleum gases, printing and publication.
Apart from investments in limited liability companies, Odu’a Investment Company Limited also owns substantial properties in choice locations in the Ikeja residential/industrial Estates and Apapa in Lagos State as well as a number of residential and commercial properties in Ibadan, including the Aje House. It also has investments in properties in various parts of the country.
The company has also indicated that foreign and local investors are also discussing regularly about joint venture partnership for expansion of her other subsidiaries like Cocoa Industries Limited in Ikeja, Epe Plywood Industries Limited and Odu’a Printing & Publishing Co. Ltd.
It also says its relationship with foreign partners in the management of Nigerite Ltd and Lafarge Cement WAPCO Plc is waxing stronger while in the hospitality sector, it is discussing with international brand managers in developing her three hotels: Lagos Airport Hotel Ikeja, Premier and Lafia Hotels both in Ibadan into globally acceptable standards. As an active key player in the competitive trade and business world, opportunities abound in the ODU’A Group to local and foreign investors/technical partners seeking reliable partners in new business opportunities viz; Independent Power Project, Oil and Gas, Pharmaceuticals and Packaging.
“The prudency of management and its budget monitoring processes coupled with increased efficiency and productivity reduced operating costs and boosted profitability of the company in the year under review,” said Segun Aina, chairman of the company’s board following the 38th AGM.
He assured shareholders that “with the new vision to be a world-class conglomerate and the ambitious financial targets, the board remains positive about the company’s future and will continue to work closely with the Management and provide the needed oversight, guidance and strategic direction.”
According to Adewale Raji, the company’s group managing director/ceo, some of the company’s new forays include: the oil and gas upstream sector and agriculture with processing component. This includes the group’s mechanised farm at Imeko, Ogun State, where 1,200 hectares of cassava is currently under cultivation with a technical partner that will feed into two 50ton/day modular processing plants for the conversion of cassava tubers into High Quality Cassava Flour (HQCF) and High Quality Cassava Starch (HQCS). There are also renewed organic growth efforts at its Wemabod Limited (Real Estate) and Glanvill Enthoven Insurance Brokers & Pensions Consultants Ltd (Insurance Brokerage).
The group had also recently incorporated South West Agriculture Company Limited (SWAGCO) to mid-wife the agriculture transformation of the South West strictly on sound private sector principles and strategic partnerships. This agric investment firm, the company says, has already identified focused food crops, cash crops, livestock and agriculture processing that will guide its investment decisions. SWAGCo will spin-off SPVS that will bring about profitable economic growth and social impact of job creation and lifting the rural economy of their locations.
The Group’s future outlook includes essential sectors of the economy like food and manufacturing, healthcare & pharmaceuticals, logistics, Ict/digital, etc which are covered in the new 2021-2025 Strategic Plan.
With the expansion of investments across states, many regions have a big lesson to learn from the South-west region on economic integration. The lesson has become critical due to the impact of falling oil prices on state economies and the need to tap resources around states to improve the lives of the people. Currently, the future of oil is not so bright and it would be a miracle for minerals to still sustain Nigeria in 30 years’ time. This is, therefore, time to forge regional economic forces to improve the lives of Nigerians and boost states’ revenue profiles.
With the expansion of investments across states, many regions have a big lesson to learn from the SouthWest region on economic integration. The lesson has become critical due to the impact of falling oil prices on state economies and the need to tap resources around states to improve the lives of the people