Dr. Chris Ezeh is Executive Director and CEO of The John Holt Group. John Holt was founded in 1897 and is one of the oldest and most important participant in diverse areas of the Nigerian economy. In his position within the group, Dr. Ezeh is responsible for managing the company’s day- to-day operations and setting its strategic direction. In this interview, he discusses the company’s investment approach and future strategy.
By Onome Amawhe
HOW does the mission and visionof John Holt translate into current realities?
Our mission is to impact positively on the prosperity and well-being of our stakeholders. For us, stakeholders include customers, staff and owners of the businesses, obviously. The most significant thing about John Holt is the brand equity that we have. Because we’ve been around for a very long time people trust us, and customers know that even if JohnHolt prices for certain products and services are higher than the alternatives, they are sure of the quality they get. They are sure that we’re not going to cut corners. This is what has sustained the business for as long as it has.
What is the current business focus of JH and how can it be compared to the business model put together by its founders?
John Holt started as a trading company. That accounts, to a large extent, for why we have branches throughout Nigeria.
As a strategy, our branch operations share proximity with markets and city centres because of our trading businesses. Since our early operations, we’ve branched into many other businesses in engineering, sales of generators and other power products. We build boats in Port Harcourt, and offer warehousing, shipping and clearing services as well.
Then, we are not limited to these only because we are constantly seeking new business opportunities. We are currently incubating export business in reaction to the import dependent nature of our company because a lot of the value products that are required by our customers are imported. The only 100 per cent home grown businesses in our portfolio is our warehousing and boat building operations – which also have import requirements in terms of the parts used in building boats. In the area of revenue generation, it is the home grown businesses that account for a huge part our income. And that goes to show the importance of home grown business.
What are the important milestones recorded by the company since it was established in Nigeria and how have these affected its future strategy?
The first that easily comes to mind is our foundation membership of the Nigerian Stock Exchange. That in itself has helped to set the tone for the influx of other companies into the exchange. John Holt is the originator of many viable companies in Nigeria either as co-owner or operator of the business partnership.
Some of these companies include Thomas Wyatt, Costain, NAL Merchant Bank Plc (now Sterling Bank) Westminster Dredging, Wempco, Maersk, Nigerite, among others. Some of these companies are still in existence and some have had to change name over time.
We are not limited in the types of business we do though we started as a trading company. Our early business history made us more receptive to ideas that were hitherto alien to us and like I mentioned earlier we are looking at export in relation to what is going on in the economy. We are looking at developing other home grown businesses for that same reason.
Many old companies tend to be set in their ways, and I admit that John Holt was the same at some time. To some extent, it’s quite difficult to change certain things in old companies because they are used to doing things in certain ways, but in a way, that’s the advantage of operating in a country like Nigeria where things change very quickly. If one intends to guarantee any kind of longevity for business in Nigeria, one has to be able to adapt very quickly to changes in the environment otherwise smaller companies would mop up market shares.
What has been the biggest driver for growth in the Nigerian market?
That can be looked at in terms of numbers or patronage values. In terms of value, it’s got to be our property and warehousing businesses. In terms of numbers, our generator sales business takes the lead. Like I mentioned, we started with many branches because of our trading businesses and over time those branches have been converted to warehouses through which we offer warehousing and inventory services.
It’s a very simple business model that’s needful because infrastructure is poor generally and manufacturers cannot hold all stock in Lagos and then truck to all country locations every time they receive an order. This service adds significant value because it enables manufacturers and distributors to penetrate multiple cities almost at the same time and because of the proximity of our warehouses to market and city enters, the visibility is there and these are the things that new products need.
How has the recession affected your operations and how is JH mitigating the risk?
I doubt if there is any company that hasn’t been hit by the recession. For us, unfortunately, we are an import dependent business and the significant dependence that we have on foreign exchange has led to severe issues in terms of ability to trade. Obviously, because of the demand for our products, we have to continue to bring in the products. And of course, they’ll be more expensive because we now have to cost at the rate that we receive the Forex. And this has affected sales somewhat but we are not going to sit back and wait for things to improve.
This is why we are looking at developing other businesses. Consultants have been engaged and we’ve made significant progress in the export business that we are looking and other retail type options so that we can effectively deploy these same branches that we have to provide retail outlet services.
How do you see JH under your leadership?
I was made ED in November 2013. Under my leadership, the focus has been on shoring up the brand equity that we have and our good name couldn’t have been bought. It was earned and we have sustained that good name these past many years.
And we’re not going to compromise on that now. And that’s the one thing that scares our competitors. Focus has also increased on our customer engagement (we talk to them more and try to understand them better so that we can meet their needs in a more responsive matter). We have a significant interest in the power industry as a result of the expertise that we have developed and the need that is apparent.
This need led us to have an arrangement with Siemens to import John Holt made transformers. We are also looking at pre-paid meters because they are now required and we find that we can very easily extend our brand to accommodate all of these additions
What is the most challenging part of being at the helm of a 100+ year old company?
I think there’s a general challenge of being at the helm of any company operating in Nigeria. The issues in the economy; policy changes-without notice are enough to keep anyone up at night. Internally, there’s a lot more control because there are laid down procedures that are respected and guides operations but there’s always this air of uncertainty and so one has to be ready for very quick changes in strategy direction and create enough buffers for this shocks when they come.
For instance, the Forex loss that we have suffered as a result of the devaluation of the Naira is significant but fortunately, because of the development of other areas of our business, we were able to absorb some of the shocks but not as significant as we would like. Now, the focus is on home grown businesses because we are determined that we’ll not suffer the fate that we did in the past.
Where do you hope to take JH in your time as CEO?
My role in John Holt is one that involves the provision of guidance to the other units and ensure that they get things done. For me, the important thing really is getting the right people in the right place and in recent times, there have been quite a number of staff movements all in an effort to identify suitable positions for particular staff based on their skill set in order to derive the most value from them.
As a marketing person, I’m usually on the road looking for business.