Nigeria-American businessman, Victor Edozien, has quietly built a $400m portfolio in the American automotive manufacturing industry. He towers elegantly as Nigeria's image builder in the global community.
MANUFACTURING plants across the United States of America have faced steady close-downs as businessmen move their operations to Asia and Latin America to reduce cost and optimise profits. This has led to high unemployment and dislocation, leaving industrial centres such Detroit in ruins. If the situation is to be resolved however, it will be due to brave souls such as Nigerian American investor and business personality, Mr. Victor Edozien, whose string of plants are keeping thousands of people in jobs and last year returned a healthy $400million turnover.
Edozien's Asaba Holdings operates manufacturing, consulting and lifestyle businesses and has operations in five states in the US. Its portfolio companies include the AG Manufacturing Inc, which is an Electrical and electronics sub-assembly manufacturer for the automotive, marine and military defense industries; the SET Enterprises, which is a major provider of steel processing services to the automotive industry and the Asaba Group which offers strategy consultancy to the automotive industry and the US Air Force. The companies operate manufacturing plants in Michigan, Illinois, Alabama and Indiana.
'We have a portfolio turnover of $400m last year and our goal is to reach $1billion by the end of the decade,' Edozien told The Guardian at his office located on the 66th floor of the iconic Empire State building in New York. 'The basics are there. We have over 700 highly motivated employees and our businesses are well run.'
It is hard not be infected by Edozien's optimism about the ability of his businesses to continue its dizzying growth, after all the total portfolio turnover of the operation was a mere $1.2million in 2004. So, how has this man, who grew up in Nigeria been able to leverage his talents to build a successful business in the United States?
Edozien said: 'What I do is seek competitive white space to invest in. I usually use my own money to do business, so I have independence in decision-making. But I also have a strong management team to run the various operations. I rely on them a lot. I just provide guidance and strategic visioning. The crucial question for us is always, is there opportunity for us to move in? Once this is clear, I take the decision to invest or not.'
A Nigerian Life
Born in New Jersey, but educated in Nigeria up till undergraduate level at the University of Port Harcourt, Edozien - a scion of the Edozien royal family of Asaba - dropped out of school to relocate to the United States in the 1980s where he obtained a Masters' degree and served in the US army, 10th mountain division.
'I gained a lot from the military experience,' he said. 'The US military is one of the best in the world and you leave with focus and belief that you can do anything. The slogan used to be: 'be all you can be'. Does that give you the grounding to take on life's challenges, of course it does. I just see hurdles as challenges and I move ahead to climb it.
'When I was at Uniport, I wasn't the most disciplined student. That was the time of Andrew and I was one those that checked out and never looked back. I did two years in Geology at Uniport and transferred to Syracuse where I got a super education.'
After school, Edozien worked on electrical controls for air-conditioning, from 91-92 and was part of the team that designed the now ubiquitous remote control system for split-unit air conditioners. 'I have a patent for one of those designs' he said.
But he always wanted to be at the business end of things.
'The quantitative side of me is where I am more comfortable and that works fine in Finance, but the human relations part is the weak spot. I started working to get on with the business management side of things.'
He started a consultancy, the Asaba Group, which had a good client list including General Motors, Chrysler and Ford. It even executed contracts worth $20million for the US Air Force.
'I was making quite a lot of money out of the consulting,' he said. 'But I still wanted to be in a situation where I moved away from giving advice to doing things. I want to run better-managed and more profitable companies. I always have my eyes on the automobile industry because most of my clients on the consulting side are in the industry. I tried to convince people to buy non-performing firms in the sector. I talked to a lot of people in Nigeria to join me, but they did not want to invest. So, I stopped trying to depend on anyone for what I do.'
Edozien decided on his first acquisition when he came across an electrical parts manufacturing company that was dying.
He said: 'I was working with Chrysler and there was a contractor that had moved all its plants minus one to Honduras and China. There are characteristics of some plants that do not lend itself to being moved away. So, I moved on the plant. It cost $2million and from that point onwards, I put myself in a situation where I am able to take advantage of such opportunities in the industry.'
However, it was not easy turning the plant around. Edozien and his friend and financial adviser, Michael Oniamwah (also a Nigerian-American) worked for almost three years to turn the business around. But first, they had to convince the entirely white staff that they are who they claim to be. And a major newspaper did not help matters by carrying a story that appears to condemn the plant before the new owners even had a chance to start implementing their turn-around plan.
'You can imagine the shock on the faces of the staff when, after closing the buy-out deal, we walked onto the floor of the plant to say we are the new owners,' he said with a chuckle. 'We were the only two black people within a 150 mile radius - and we are the new owners of the plant! Two guys with Nigerian accents and we told them we just bought the business. They were all just staring at us.'
Until one person spoke what was uppermost in the minds of the staff at that time: when were they getting paid? It was near Christmas and the former owners had not paid the salary.
Edozien promised they will get paid, and they were. Although the company lost money the first two years, and had to rely on cash injections from the Asaba Group consulting business, it finally became profitable and now has an annual turnover of $35million. The company, which has 250 people on its payroll, is the second highest employer of labour in the town of Habour Beach, Michigan.
His next set of acquisition was the SET Enterprises, with plants in Michigan, Illinois and Alabama. Perhaps the SET plant in Detroit is a good example of the force for good that businesses such as Edozien's could become in a society. The plant is located smack in the middle of decaying Detroit, with boarded-up and crumbling homes within its immediate vicinity. Staff of the plant gamely tried to keep public facilities such as community parks going. Of course, each of the huge plants also depends on power - and this means Edozien could not even think of moving any to Nigeria.
'You see how much power they depend on,' he told The Guardian during a trip to the SET flat rolled steel plant at New Boston, Michigan. 'If I don't have constant power, we can't work. So, it is going to be hard to move any of the operations to Nigeria, but it is not impossible.'
Edozien was a partner in the SET operations before he bought out the owner. So, how risky is it to partner with him, seeing as he is past master at consolidating businesses he is involved in. He said, with an easy smile, it is not really a risk.
'The thing is, I make money for people. The only people who are not happy with me are those who try to double cross me,' he said.
Double-cross is not uncommon and Edozien has battled through a few. In fact, he only last March won a two-year-old legal suit against former partners- turned- adversaries, who wanted to usurp his rights to global energy drink, Cintron. The legal battle was costly - about a half a million dollars in legal fees - and draining. But Edozien said the brutality of the case provided further motivation for him to take his businesses even higher.
'My former partners, who tried to use the American court system to bully me, thinking I am not American, have been disgraced,' he said. 'This is the greatest country in the world. There is no other place where someone like me can be this huge. I speak with an accent. I have a Nigerian heritage, but this country has helped me to build a multi-million dollar business
'However, it can also be brutal if some people wanted to take advantage of you. People talk of 419. It is everywhere, and here in America, people use the court system to do it. My happiness is that I prevailed. My partners and I own the Cintron brand all over the world and the court has now confirmed that we are the owners here in the United States.'
He said his upbringing, not to cower before a bully, helped him to pull through.
'A bully succeeds because people let him. You can't appease a bully. You have to draw a line somewhere that there are things you will not take. Thank God I have the resources to fight these people. If you seek to appease, you only empower them. Once they realise you will not roll over for them, they start to panic and leave you alone.
Edozien said his basic business philosophy is trust and that he has built his life around integrity.
'I don't have access to my checking account,' he said. 'That is how much trust I have in the people who work for me. If I don't trust them, they can't last with me. Contracts have to mean something. I know will always fulfil my side of things. A card laid is a card played. You have to hold up your integrity. It is due to integrity that the partnerships that I have, such as the one with Akon, works. I do what I say. He does what he says. We trust each other.'
He, however, owns up to the challenges that being a Nigerian could pose to building a business in the US. But he said dedication and integrity would always triumph over the initial reluctance.
'Some of the times you have to push your business as an American,' he said. 'People are scared to do business with Nigerians and you have to keep pushing and let people know you are not a 419ner. The truth is that 30 per cent of the black brains in the US are Nigerians. The mystery is why Nigeria is not doing anything to bring back its talents. A part of me feels the greatest challenge Nigeria has is the enthronement of mediocrity and a system that does not want its brightest to do well. Then Nigerians do not love their country enough, especially the leadership. They do not feel accountable to the people at all.'
A lifestyle business
EDOZIEN is not all about steel and gadgets. He is also the major shareholder in Vedozi, which is a lifestyle company behind the Cintron Premium energy drink. The drink, which comes in three flavours of Original, Cranberry and Pineapple should have no problem establishing itself among the global energy drinks brands. It has enjoyed rave reviews and has the weight of Senegalese American singer, Akon, behind it
'In the energy drink sector, we feel there is a space we can occupy, and this is around lifestyle and music, rather than the energy boost itself. Cintron has unique characteristics and we have partnered with Akon, who is building a lifestyle firm - Aliman,' Edozien said.
'We started building the brand with the intent of growing from Africa out. At the time, when you think of music as lifestyle , Akon was it. I contacted his agent and we met in Atlanta in 2009. He liked the idea
and accepted to come on board. We have been working on it since then. Building a global brand takes time, but we are not rushing. We are in Africa, mid-east and Latin America and we are planning a push into Europe.'
With Cintron, Edozien had promoted Akon's shows in Lagos and South Africa and a new campaign is in the works. So, how much has investment has the drinks business soaked. Edozien is not saying, but he feels every cent put in it has been money well spent.
'We have put in millions to grow the business,' he said. 'That is the way to look at it. But every business has its own investment basics. Even in manufacturing, you put in $30-40million on a plant before you even start to make a product. So, that is the way it is.
Incidentally, Edozien's early efforts to promote his drink in Nigeria foundered on betrayal. His local dealers refused to pay for delivered product.
'I can sue the guy and the case will last for years in court, but we decided to cut our losses and move on,' he said. 'Nigeria is a huge market and we have to focus on getting our products everywhere. We also have cases in Senegal, Egypt and South Africa where people have refused to honour their contracts. It is tough to build a business when you are not sure of the other guy. But we are learning. There is something called time value of money, which was why we moved quickly across Africa. But it didn't work out. I know we have a super product, but doing business in Africa could be tough - especially if you have a US mindset. Here, a contract is a contract and there are no stories. So, now we are working with new individuals who share our values.'
The Cintron distribution fiasco is not Edozien's only problematic business deal in Nigeria. He was one of the potential investors in the Oku Iboku paper mill and had secured funding from the United States to turn the plant around. But Nigerian privatisation officials had other ideas about how the sale should be done. His bid was rejected and the billion naira plant is now being used as a jetty.
'Oku Iboku is a sad story,' he said. 'If I go to another country with the same offer, they would give it to me to run. But we were pushed away by funny officialdom. It is sad. Although America is older than Nigeria, it is hard to be here and not conclude that people here love their country. The question to ask is if it is the same on the Nigerian side. Do we have the same sense of patriotism?'
Each of the businesses within the Asaba Group operate autonomously, with light supervision from Edozien. He said the key to his success is that he keeps things simple. He also keeps an eagle eye on the operating cost.
'It is a lot of multi-tasking, but I allow the managers room to do their work', he said. This means he can keep his eyes on the larger picture - and focus his energy on keeping the major customers sweet. The group's major customers are Ford Motors (steel); Chrysler (electricals) and the US Air Force and US Army (advisory). When he is on the road, which he is on a lot, Edozien tries to participate in crucial meeting s through conference calls.
'I don't mess with such huge businesses,' he said. 'A $10million business is not to be played with. This is customer account operations that need my full attention. These are meetings with top management of these organisations and I must be present.'
The automotive supply business is highly competitive and you have to constantly drive down the cost margin to stay in business. He said his team of experienced managers understood the industry and are often on the same page with him. When they are not, there is frank and open discussion on the way to go. But he takes the major decisions.
'Money I can always get, but good management is hard,' he said. 'But there is division of labour. While my management focus on today, I have to think of the next day. My General Managers worry about getting the trains to run on time, I worry about the destination and the direction.
'It is not important how big the business is, the important thing is profit,' he said. 'We look for value, not volume. Since we get business on a competitive basis, you have to drive the process to constantly make it profitable. We run our plants on profitability margins. This is the principle I bring to my businesses. It is not revenue that matters, but the profit. It is the contribution margin from a business that pays our bills.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in ASABA GROUP HOLDINGS over the next 72 hours.