In a recession corporate titans must raise the bar – Adewale Raji, GMD, Odua Investment Mr Adewale Raji, the Group Managing Director, Odua Investments Group heads a conglomerate with diverse interest in construction, real estate, manufacturing, banking, insurance and the hospitality sectors. As the numero uno of the investments brand owned by the southwestern Nigeria Yoruba States, Raji has come a long way from his days at PZ where he started his career and rose to the top executive board position before moving to pilot the affairs of Odua. Raji who has extensive experience in management, finance and marketing in this very interesting encounter as captured by WALE ALABI and AKIN AKINLADE shares his management perspective, especially in a recession. Excerpts:
Q- In view of the current harsh economic climate in the country, how easy it is running a big, conglomerate like Odua Investments?
A- Looking at the current state of our economy as a nation, this time of recession is no time for corporate players or businesses to fold our hands but for us to raise the bar, challenge ourselves and ask ourselves how we are going to make a difference. At a time like this, resilience, innovation and looking for ways to turn things around go a long way: it is tough. It is fundamental that we do not lose focus of the essence for our existence while looking out for more sustainable things that we are getting involved in. We can borrow from our past experiences when we took advantage of the partnership to create businesses that are very successful. If you take a look at investments in building construction value chain in places like cement, roofing, you will see that they are profitable. As long as you have population growth, middle-class growth people are bound to improve their standard of living. We endeavour to take advantage of this to attract very capable and very creditable partners in other to grow our business based on the essential needs of people which has to do with shelter, food and other items for survival.
Q- As the GMD of a conglomerate, how have you been able to navigate across the diverse sectors of your investments?
A- The Odua group has two segments of the business. One, we have areas, where we are involved in direct operations. We are also equity investors where we are not managers of the business.
In areas we are involved, we make sure that we align with people that we can take benefit within their managerial abilities making sure that people we delegate tasks to are really far competent to us in that task and masters in the field.
Q- As an investment group how have you been able to manage and monitor your investment where you are just equity investors over the years?
A- When we try to raise capital, instead of going to the bank we raise from our shareholders. For many years profits have not been removed from shares and this has diminished our holdings on these entities. As an investment company as long as the business is thriving, we make sure that we have our resources including the latest facilities in order to be able to respond to whenever the other thriving businesses require additional cash for their expansion so as to assist not to have diminishing value. In places like Lafarge, we have lost our pre-eminent position on account of not taking advantage of opportunity early enough. And in some cases, we undervalue sales on existing shares. For reasons that were not convincing and can’t be shown today. It is important that an insurance company should be resourceful enough to pay attention to its investment requirement in order to keep increasing in value rather than position itself where it leads to the diminishing of their value.
Q- Corporate governance has been a recurrent issue in corporate Nigeria, its abuse is killing businesses. As a management expert, what is your take on this?
A- Frankly, it’s a Nigerian problem, the public sector has huge issues about governance. Under the very difficult climatic business condition that enterprises are faced with those who observe corporate governance are the ones that are surviving. For example, look at the breweries they adhere to their values on a daily basis. Decisions made are strictly on the interest of the business. Businesses are located near the raw materials market or things that are generally beneficial to the business.
Business is business but when other periodical decisions are put before these, that’s when it experiences serious problems and suffers depreciation. Once a business is settled, one starts to push for growth and expansion that will have more room for more hands. Corporate governance is not a western ideology. No business can survive without corporate governance.
We are not averse to making money, it is the fact that a business has to be clean and the shareholders that have invested need to get benefits. For the organisation to be able to help the state, there is a need to show responsibility to the shareholders so that they will be able to give their backup. Improvement in profit is a way to show responsibility.
Q- Can one say, it is as a result of this positive development under your leadership that made Lagos State come on board?
A- Maybe it was what made the business popular. When it comes to pace-setting in the country the South West has been a leading light and since the creation of state everyone has come to focus on their state and that does not really help us in terms of integration and giant strides expected from us by our founding fathers. So the coming of the Lagos state will be beneficial. Lagos has an advantage of early exposure to western contact, which even Nigeria as a country benefitted from. By reaching out to other states in the southwest this will create an opportunity where the strength and weaknesses can become complementary to the southwest. For economic development, it would be hard to take on programmes where there is no uniformity.