Uwadiale Agenmonmen: Business Owners Should Cut Cost, Employ Strategies to Attract Customers
Uwadiale Agenmonmen is a petroleum engineer, entrepreneur, investor and philanthropist. He is the Chief Executive Officer of Raedial Holdings Limited, a conglomerate with interest in agriculture, real estate, financial services, hospitality, power and energy. In this interview, he shares his experiences and journey as an entrepreneur. Oluchi Chibuzor provides the excerpts:
Can you tell us about your career trajectory and background?
I am a proud engineer. I had always wanted to work in the oil and gas industry. While my career has mostly been abroad, spanning around ten years, I’ve had the chance to travel to various countries including the US, UK, Ghana, Angola, Senegal, Kuwait, Abu Dhabi, and Turkey. I was barely in Nigeria for more than six weeks in a year because I was always moving from one country to another. My experience as an engineer still reflects in most of my interactions.
I studied Engineering. I had first degree from the University of Benin and I had my Masters from Robert Gordon University, Aberdeen, United Kingdom. I also did a short business course with Lagos Business School (LBS) in Agricultural business. At the early stage, it was always a goal to work in oil and gas. Oil and gas was the industry then as they were paying a good chunk of money at a time. It was not just the money; it was also exciting. I worked in the unit where we drilled the oil which I believe was almost the same concept as creating something from nothing.
Your career has witnessed some interesting changes, what prompted the switch from engineering to agriculture and real estate?
A lot of people wonder why I made a drastic change from oil and gas to agriculture. Agriculture is something that I actually found interesting. I think there are a lot of similarities between agriculture and real estate when it comes to building something from nothing. It has always been fascinating to me for a long time and that is why our major businesses at Raedial Holdings are centred around agribusiness and real estate. It affords us the opportunity to build things from nothing. In the agribusiness for instance, if you’ve ever seen the palm-oil seed, it’s so tiny that it grows and yields for 30 years and it brings very good returns. It’s just from one seed plant that just keeps growing while you nurture it. Real estate also has that same effect as well because it involves developing a structure that was initially just a design on paper which is why I like Dubai, the structure they have there is remarkable, they are different and not conventional. So, we are trying to see how we can develop affordable housing projects. We want to see how possible it is for us to build houses that people can afford and have the payment spread over a long term without interest. We want to give people the opportunity to own good homes, not far-fetched ideals they cannot buy not until they can earn a certain amount of money. That is really how we transitioned from oil and gas to real estate.
At what point in your career as an engineer did you get to the stage you knew it was time to venture into entrepreneurship?
Although I had grown to the stage where I was earning extremely well for doing not much, it wasn’t even about the money at all. One major reason for deciding to switch to business was my family. I was everywhere, travelling to different countries, and I was not really at home. On several occasions, I would get home, get a work call and I’m on a flight back to Lagos. Also, my job then became repetitive and to crown it all, I got stuck in Kuwait during the Covid-19 pandemic. Kuwait is a very conservative country, we could only go out between 5 pm and 7 pm every day. I needed to be close to my family, but I also knew if I came back home I couldn’t afford to stay idle. That was when I realised I needed to jump into entrepreneurship. I had to set up and do something about it. A lot of people advised me to keep on working while I maintained my personal business on the side. But I knew if I wanted to make the best out of my business, I can’t do both. I would still have to attend to bosses and that will consume my time.
Have you always been passionate about entrepreneurship and how did it start?
Entrepreneurship has been a thing of mine for a very long time. However, there are some basics you must have for you to strive regardless of what you want to achieve as an entrepreneur. Education and experience are two very important elements entrepreneurs should have. I gained experience by working with other oil and gas sectors and people with different cultures and perspectives. It is a great deal managing other people’s business, so I knew I had to pay my price. I paid my price in the oil and gas industry by working hard. The decision-making process in running a business is different, and I learnt from the employers I worked for. Managing a business of $50 million for a company at a time; I was looking out for seven countries at a time. I know what targets are. I know how to work with different types of customers. If you have never worked in such capacity, you can never know because there is no school that will teach you that. I strongly believe that if you can pay your price for your dues, work for employers, gain experience and when you think you can deal on your own, start.
Talking about my experience with entrepreneurship, in the early days of my primary school, I would buy three groundnuts with additional nylons and divide the three groundnuts into four to make a profit. In my university days, my brother and I set up a lot of cybercafes in Benin during the analogue era. We set computers from scratch, motherboards, hard drives and memory cards.
Why did you decide to venture into oil palm production?
One reason why I chose the palm-oil value chain is that I like the stability it offers and every part of the palm value chain has its use. Besides the fact that you just plant once, you can maintain and harvest for 25 or 30 years depending on the species, nutrients of the soil and minor practices. There is actually no part of it that is a waste from the oil plus the red oil, palm nutshell which can make biogas. It is an end-to-end useful by-product and we realise there is a huge deficit in the value of palm oil in Nigeria.
The name of the company we use for our agro-business is Raedial Farms Limited. If you go with some industry focused users value report, I think presently it is by a million metric tonnes deficit for palm oil in Nigeria and we cannot breach the gap. In setting up, you would have to engage with communities and offer a lot of employment to various people.
How many people have Raedial Farms Limited created employment for?
Considering our contractors and labourers, we are looking at about 500 at the farm while the direct labour force is currently around 50.
You also have investments in real estate. What inspired that?
While we are not relenting in our growth in Raedial Farms, we decided to step our foot more into real estate so we can actually provide affordable housing units. We’ve looked at the market personally in Lagos and we’ve realised that we can make better houses. We have heard of issues with land purchases and unit purchases. We believe we can do better with our team and level of knowledge and experience.
Lagos is the hub for everything and all our partners are in Lagos. We decided that we wanted to be closer to our partners to actually show them that we are not in some remote location. Not just the real estate business but the entire Raedial Holdings is in Lagos. However, the farm is in Benin. It has been a good experience so far and we look forward to providing excellent services to the Lagos market.
What aspect of the real estate industry is your business into?
Our real estate business goes under Magnificent Multiservices Limited but we just call it The Magnificent. We will also go into some building projects. We are trying to see how we can close the gap in Nigeria’s housing deficit by embarking on affordable housing projects. We will also engage in some luxury projects when the economy and the environment permit such projects. We are currently selling June 15, Raedial Paragon and Imole Lagos. These products are unique because we have taken our time to ensure we follow the right processes with documentation.
What is your assessment of the present investment climate in Nigeria?
Houses that were selling for N40 million, just a year ago are now going for N65 million. There’s inflation and businesses in all sectors are feeling the effect of inflation. At this time, a lot of investors are paying attention to the trends while limiting their risks. But one thing with real estate and agriculture is that they are basic human needs. It is true that the market has slowed down drastically, but the market is picking up and we are all accepting our new normal. Consumers are starting to realise that real estate is still one of the most secure investments.
Properties are pretty expensive in the major cities, especially Lagos. A lot of Nigerians feel that real estate developers charge exorbitantly and are driven only by profit. Some Nigerians think this is limiting real estate growth and also denying average Nigerians the opportunity of owning properties. How correct is that?
With my wealth of experience outside the shores of this country, I understand what investors go through and we want to give them real value for their money. But by being on the other side of the curve, I understand the pressure on developers. Running a business in Nigeria is different. Developers go through a lot, property sourcing, documentations, building materials and operations costs are over the roof.
So it’s not developers that are limiting real estate growth, it’s the inflation, the economy, it’s the market. One thing we have tried to do differently is to make property ownership as affordable as possible for people. We have also created flexible payment plans with zero interest for up to 18 months for our clients. For Imole Lagos, the initial deposit is just N250,000. We have made it so low, so that every Nigerian can own a property, so this just shows that the hypothesis that developers charge exorbitantly is wrong.
To what extent has government’s policies such as the FX unification, petrol subsidy removal among others affected your business?
The removal of subsidy increased the operating costs of businesses. Particularly industries that heavily rely on fuel, such as transportation, manufacturing, and agriculture. I work in the agric sector and this has led to higher prices for food. It has also caused inflationary pressure, impacting the purchasing power of consumers. The government policies and FX unification has affected demand and profitability, particularly in the real estate sector because it relies on consumer spending, but not so much on the agric sector because it relies on consumer survival.
How best do you think young business owners can navigate these challenges?
I think young business owners can cut down on a lot of operation costs, and employ a pricing strategy that keeps customers coming, while they do not run at a loss. It’s a strategic season for everyone and smart entrepreneurs can find ways to grow amidst this.
