As Managing Director of Lagos Deep Offshore Logistics Limited (LADOL) Base; Nigeria’s first 100 per cent indigenous logistics and fabrication base; Jadesimi is one of the few females in top management positions in the oil and gas and maritime sectors in Nigeria.
She is a recipient of the prestigious Desmond Tutu’s 2012 African Youth Leadership Award.
In this interview, the Oxford University trained medical doctor and Stanford Graduate School of Business alumna speaks on the mission of her company.
LADOL Free Zone, as well as some of the major milestones it has achieved?
LADOL Free Zone is unique as it is the only indigenous Nigerian free zone and the only one that is privately financed. It started as a green field, with the vision of creating a hub in West Africa for logistics, marine vessel repair and maintenance, and even shipbuilding.
Since its foundation, over 150 million dollars have been invested in order to complete the shift from an undeveloped site into a fully operational logistics base. The fact that the base is within a free zone enables us to provide a one-stop shop. We have completed several rig repairs in Nigeria, which were previously done outside the country, and we are responsible for the largest rig repairs that have taken place in Nigeria. We have been able to demonstrate that this can be achieved with 24 hour operations, during which we provide accommodation, catering, procurement, offices, manpower, etc., within the free zone.
In 2012, over 104 rigs were towed out of Africa to be repaired elsewhere, due to the fact that there was a major lack of facilities across West Africa. The lack of infrastructure in Africa is a challenge to attracting foreign investment into these sites.
Taking this into consideration, LADOL has achieved a very significant milestone in justifying and demonstrating the indigenous lead in investment and development of new infrastructure through the LADOL business plan, and in making the vision of the company a reality. Through this, we hope to inspire other investors to take a leap into the sector. It is crucially important for us and for the West African growth, particularly to service the oil industry and maritime sector, that more facilities are developed, as well as specialised infrastructure.
Now that we have the proper facilities and infrastructure in place at LADOL, we are looking forward to expanding into other areas of the country and attracting both international and indigenous companies to establish in our bases.
We are also seeking foreign technical partners to come and invest in the market, and to work together with indigenous companies that are willing to invest in infrastructure. For long-term partnerships, foreign companies need look to the indigenous private sector, which is currently investing.
Nigeria also has a very high level of untapped intellectual and human capacity. Investment in training schools and educational programmes is also increasing, for example LADOL has established a partnership with Samsung Heavy Industries to open a training school this year. This will be Samsung’s first training school in Nigeria, and apparently the first in Africa. We are also going to open other required training schools for the maritime training sector. Both infrastructure and human capital development are necessary, particularly since the projects we are undertaking have never been done in Nigeria before.
One of the benefits of Free Zones such as the LADOL Free Zone is that qualified international staff can be brought in to carry out specialized jobs while Nigerian staff are being trained for the tasks.
Furthermore, LADOL Free Zone offers international companies a hassle free environment in which all required government approvals and documentation are done on site, constant power supply, drinkable water, comfortable safe accommodation, offices and all required operational support equipment and facilities from quay wall and workshops to heavy lift cranes.
Free Zones are also a low tax environment with no corporate tax, which means that a foreign company can take all its profits out of the country; and operations can be carried out with foreign currencies.
How does Nigeria benefit from LADOL’s services and facilities?
Facilities such as LADOL foster the inflow of foreign capital investments into Nigeria. As previously mentioned, West Africa’s major challenge has been the lack of infrastructure throughout the region. A major challenge to the development of these Greenfield sites in the last 100 years has been the lack of indigenous ownership and investment. Thus, green field sites need to be developed with proper infrastructure, and indigenous investors need to lead the way, followed by foreign capital, attracted into the developed areas created by the indigenous investors.
Having a Free zone also ensures that LADOL’s environment gives foreign companies all the operational and bureaucratic systems they need to operate in a cost efficient and safe manner in Nigeria.
Over the past 20 years, Nigeria has spent over 300 billion dollars on oil and gas. In the next 5 years over 150 billion dollars will be spent on deep offshore oil and gas across West Africa. Taking these figures into account, and given the demographics of the country, we cannot afford to continue to export our jobs and foreign capital. Therefore, we need to prevent that flight of foreign capital and attract foreign investment, which will result in job creation.
Human capital development and training are another essential aspect of LADOL’s mission in Nigeria. Technology transfer requires that a clear plan be in place for how the Nigerian staff are going to move up and increase the level of Nigerian involvement in the management of the company.
Technology transfer has largely not been achieved by African countries partly because foreign companies have traditionally been operating without any local partners, which has impeded technology transfer.
In this regard, LADOL offers foreign investors added value partnership, due to the fact that we can provide them with a fully serviced facility from which to operate in Nigeria, without having to make upfront investment or difficult decisions. At LADOL, foreign companies can do business in Nigeria without encountering unfamiliar environments or additional costs, it’s a hassle free, fully serviced and secure location in which local and international companies are able to focus solely on their businesses and be compliant with the local content laws.
Local investors, such as those behind LADOL, are making long-term investments, from which they will benefit in the medium to long term. Typically it is only indigenous investors that are capable of, and willing to wait for a medium, to long-term period of time to get the return on their investments.
How does LADOL reach foreign investors?
In order to attract customers, the first thing we did was to build and operate the facility. We did not get our first contract until we had completed and opened the first phase of our development, which involved over USD 80 million of investment. By waiting until the facility was 100 per cent ready to operate, we ensured that from day one we delivered world class services to our clients. In fact our first project was supporting the final installation of the Agbami FPSO, which at that time was the largest in the world. The project took two years and involved a dozen local and international companies all working together at LADOL.
Once we had proved successfully that we could deliver world-class services that the industry demands, we reached out to various international and indigenous oil companies, as well as to the government ministries and the equivalent of the Local Content Board at the time. We told them about our experience and the services we could provide.
The main reason we were able to establish business relationships was because we started offering services that were not previously available in Nigeria. For the past five years, the oil and gas industry has been stagnant. Looking at the level of investment we have had, it can be said that it has decreased over the last years.
However, we are currently experiencing a boom. In the next 10 to 15 years, the sector is going to rapidly grow, as an estimated USD 45 billion dollar will be invested in the country in the next 6 to 7 years. However this boom will be different from those in the past, because for the first time, services which were previously offered outside of the country will now be offered in Nigeria. For instance, complete rig refurbishment and repair.
Other factors that have helped us reach foreign investors are: our transparency, our world class operational systems, our HSE and quality standards and track record, and our certified personnel and equipment.
LADOL is also the only fully operational deep offshore logistics based in Lagos.
Deep offshore oil and gas is very costly, up to 10 times that of onshore exploration and production, so the cost savings we provide through our custom built facilities and efficient round the clock services are a must- have, in going forward.
The fact that Nigeria is now attracting new investment from multinational oil companies is a reflection of the fact that the policies implemented by His Excellency President Goodluck Jonathan and ably assisted by Dr. Mrs. Alison Diezani Madueke (CON), the Honourable Minister of Petroleum Resources, are having a positive impact.
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