By Ebele Orakpo
Mr Matthew Adebayo is the chairman of The Vine Energy Resource Inc (TVER), a renewable energy company started about three years ago. Adebayo who worked for Johnson and Johnson (J&J ) for 21 years and also a top executive of the company, served in three management boards of the global company before coming to Nigeria to establish TVER alongside other people.
He brings to bear on the renewable energy company, his wealth of experience. Adebayo spoke to Financial VanguardÂ in Lagos.
Mr. Adebayo who said he visits Nigeria almost every year over the last 10 years, was bothered by the nature of power generation in Nigeria. â€œIt is something that has really been very disturbing to me personally and to the rest of my directors. We have always been looking at what we can do to really mitigate some of these issues that we have.
The leadership to really drive thoughts into action came from Mr Wale Arogundade (TVERâ€™s CEO), Mr Dele Awe (TVERâ€™s CFO) and Mr Niyi Awoleye (TVERâ€™s Director of Engineering and Operations). Without their vision and tenacity to make a difference, TVER will not be in existence today. And for us, the key was not just to bring a solution but a solution that works for Nigeria. So one thing that we were very careful about was to make sure that whatever we were doing was in the context and the dynamics of Nigeria. TVER started from a conversation,â€ he stated.
Continuing, Adebayo said: â€œWe were sitting round a table, telling ourselvesâ€˜thereâ€™s got to be a better way of doing thisâ€™ and we all have our different professions. I have worked for Johnson and Johnson (J&J ) for 21 years.
I was top executive for J&J. I served in three management boards ofÂ J&J globally so I have extensive network and extensive business background. So we were just talking among ourselves asking what we could do and we started investigating solutions. We were very deliberate about what we were trying to do.
We looked at different industries and different leaders that have solutions that worked and we did extensive assessment and research and were able to find companies in the US, in Europe and in Asia-Pacific that are leaders in their fields and then we started collaborating with them. We look at theirÂ roadmap, there are some aspects of what they have that we believe can work in the Nigerian context. We sought ways to collaborate together and make sure we did something that will work for Nigeria. That was how we started,â€ he said.
Staff strength: â€œI think our presence in Nigeria is just starting so I would say we do a combination of things, we have people that we hire directly and we also have independent people so if you look at the total staff level, a combination of people that we hire directly and those that actually work for us, about 15 on ground for now.â€
In the next 10 – 15 years: In a couple of years, I think in terms of our growth projections, by the end of this year, we will be a $4 million company projecting to be $16 million in five years. That is our target. Remember that we are a US-based company so we have presence in the US as well. We are doing a lot of installations and we have a much bigger presence in Nigeria. Our plan is to expand into the rest of Africa. We are starting from Nigeria because that is where we come from and also if you actually look at the dynamics of Africa, Nigeria is the second largest economy in Sub-Sahara Africa and in two – three years from now, despite all the issues about Nigeria and all the misconceptions, and
economic downturn, Nigeria is going to surpass South Africa from the GDP perspective.â€
Expatiating, the TVER boss stated that â€œNigeria is one of the fastest growing economies with 6% growth in 2009 and an excess of 8% in 2008. With over 140 million people, we have a very young population (under 19 years old is over 50% of the population). There is huge demand but no supply of anything. No adequate supply of roads, water, electricity, housing etc. Foreign Direct Investment in infrastructure will continue (roads, housing, gas pipelines etc). Nigeriaâ€™s gas reserves alone if fully tapped, will drive huge economic growth. There is no doubt about that. So it is still a country to be reckoned with. It is a country that is still growing despite the issues we have and I think that is what we see as an opportunity.
Yes, it is very difficult to do business in Nigeria, you face all kinds of different constraints but it doesnâ€™t necessarily mean that the opportunity is not there, it doesnâ€™t necessarily mean that you cannot turn those challenges into opportunities as well. So that is what we see as our projection.â€
Asked if TVER has been able to help government in generating electricity for the national grid, Adebayo replied: â€œNot yet. I have to be frank with you. Part of our business module is to actually try and stay away from government as much as we can. We want to start with grassroots individuals, small businesses, schools, hospitals, and try to alleviate the huge energy cost that they are facing.
That is our first focus. Once we really establish ourselves and make a difference in those segments of the market place, then we have a track record so we can then say â€˜ok, letâ€™s talk to government about some of the policies that are impeding the ability of Nigeria to have electricity in abundance. Honestly, there is absolutely no reason why we should be facing what we are facing in this country.
There is absolutely no excuse for it. For me, what I want to spend my time on is â€˜how do I empower individuals? How do I make their livelihood easier and at least save them costs. Talk to any manufacturer in the country and the major issue is energy cost so I would rather spend my time with the business folks that understand what we are talking about and try to come up with a solution that would help them and then once you have the critical mass, you can then start to influence the government. We are not interested in government contracts, that is not where our core business values stand.
Affordability: â€œAffordability is a very individualistic kind of thing. To be frank, our products and services are not for everybody. It is not everybody that can afford what we have, but we do have from a low cost solution, all the way to the high end. On the low end, if you have N30,000, we have a solution for you.
It may not carry that much, it might just carry your light bulbs and fan. We also have a medium range solution for small businesses, people that live in apartments, bungalows etc. We also have the high end for people that want to carry air conditioners and machineries. Our systems can carry lifts, air conditioners, so we have solutions like that. Having said that, our solution is not for everybody. Some people would say, â€˜I would rather do what I am doing right now, I canâ€™t afford it,â€™ but we do have a solution that cater for as many people as are willing to take a look at it.â€
Mr Adebayo admitted that the business environment in Nigeria is tough, saying: â€œIt has been very tough doing business in Nigeria. It has nothing to do with the customers. It is just the processes of importing things, clearing things. There are so many rules that you have to follow, so many processes. Example, you bring something in and it arrives in Nigeria since first week in January and we just cleared it last week (middle of March), almost two months later.
Look at that time lag! And we pay demurrage as long as the goods sit at the port. Now think about the cost involved and the opportunity cost that comes as a result of your inventory just sitting there and you cannot even clear it quickly. That is part of doing business in Nigeria, you have to accept it and find a way to work around it and for us, we will do things with high integrity. Iâ€™m not going to pay bribe to anybody and may be that is why some of these things take longer because at the end of the day, you want to do things with integrity, you want to do things differently but there is a cost to that and we are willing to take that cost.â€
He advisedÂ government to make it easier for people to bring things in. â€œIf it is going to take me two months to clear a container, that is way too much so we need to look at the processes. Some of these processes may not even be necessary.
You have to fill Form MR, go to the bank, they have to inspect it, all these things are fine but how can we streamline the process so that it is consistent, so that I know that if I ship something today, this is the process I need to go through and it is well documented so everybody knows this is exactly what you need to do.
Not a situation where you do something this way today, tomorrow you do it that way, and another day you do it differently and then all these rules are coming in the middle. â€œOh, you need to have done this inspection, you need to have got this certification before and nowhere is it fully documented exactly what you should do so you are finding them out as you go along. That is very frustrating,â€ he said.