Nigerian firms that braved 62 years of headwinds

For more than six decades, some companies have been operating in Nigeria despite many economic challenges and political uncertainties that killed a number of other businesses.

These companies have thrived for 62 years or more and stood the test of time despite military coups, civil war, the oil boom and bust of the 1970s as well as the fallouts of the COVID-19 pandemic and the Russia-Ukraine war.

They include First Bank of Nigeria Limited, John Holt Plc, Union Bank of Nigeria Plc, Royal Exchange Plc, Unilever Nigeria Plc, UAC of Nigeria Plc, Shell Petroleum Development Company, May & Baker Nigeria Plc, Wema Bank Plc, United Bank for Africa Plc (UBA), Julius Berger Nigeria Plc, Aero Contractors and Sterling Bank Plc.

BusinessDay’s findings showed these companies have survived difficult periods by adapting to changing market conditions, diversifying their operations, and investing in innovation despite economic headwinds.

First Bank, founded in 1894, stands as one of the oldest surviving companies in Nigeria. With over 125 years of operation, it has weathered many economic storms, political unrest, policy changes, and financial crises.

Second on the list is John Holt, which started operating in Nigeria in 1897. The company has wide business units with interests in engineering, air conditioning and cooling systems, fire and safety equipment, construction, and property development, among others.

Union Bank is third on the list; the company’s rich history can be traced to 1917 when it was first established as Colonial Bank.

Through the years, the bank has undergone some corporate changes, including a name change and the transfer of ownership to Nigerians, thanks to the Nigerian Enterprises Promotion Acts (1972 and 1977).

Royal Exchange Plc (1921) is next in longevity, while Unilever Nigeria came to Nigeria in 1923 as Lever Brothers (West Africa) Limited.

Also on the list is UAC of Nigeria Plc; the company was incorporated on April 22, 1931, while Shell Petroleum Development Company, the first oil company to come to Nigeria in 1937 as Shell D’Archy, is also still operational.

Another notable company on the shortlist is A.G Leventis. The history of A.G. Leventis (Nigeria) Plc started when Anastasios Leventis himself formed a trading company known as A.G. Leventis & Company Limited in Ghana in 1937. The main activities of the company were importing and wholesaling of textile goods.

May & Baker Nigeria (1944) is also on the list of Nigeria’s oldest companies. Wema Bank is the ninth oldest surviving company in Nigeria, having been established in 1945. It is followed in the longevity ranking by UBA established in 1949.

Julius Berger was established in 1950, which was 10 years before Nigeria’s independence.

The company recently announced plans to diversify away from construction, its core business, following a tough fiscal year in 2020, when the coronavirus pandemic disrupted operations and depleted earnings, causing its after-tax profit to crumble 85 percent to N1.4 billion, the company’s weakest profit in four years.

Aero Contractors came in 1959, a year before Sterling Bank, originally known as NAL Bank, did.

Experts’ take

Michael Ohiare, managing director at Mutilinks Consulting Limited, said the companies have been able to adapt to changing market conditions.

“When the oil boom ended, for example, many companies were forced to diversify their businesses. They also had to become more efficient and productive in order to stay afloat,” Ohiare said.

Fummi Kuku, a Lagos-based asset manager, attributed the success of these companies to a number of factors, including their strong management teams, their focus on innovation, and their commitment to providing quality products and services.

He noted that Nigeria is a country with a large and growing economy, but it is also a challenging place to do business.

“Some unpredictable factors can make it difficult for companies to survive in Nigeria,” Akinwumi Adesina, president of African Development Bank Group, said at BusinessDay’s CEO Forum on Thursday.

“You succeed not because of ease of doing business, but by surmounting several constraints that limit industrial manufacturing. In short, it is not the ease of doing business; it is the pain of doing business,” he added.

Olumide Ayodeji, a former general manager at the defunct Kingsway Stores, said weak consumer purchasing power, supply chain disruptions, and inability to innovate or adapt to change are some of the reasons a company may struggle to survive beyond a generation, especially not outliving their founders.

“Nigeria is a tough place to do business in; We couldn’t cope with the harsh operating environment,” Ayodeji said.

Established in 1948, Kingsway had about 13 modern department stores and supermarkets in major cities of the country and employed around 1,000 people at the time.

Towards the end of the 1980s, price and currency regulations and a downturn in the economy forced the closure of many stores and eventually the closure of Kingsway Stores.

“Poor power supply, bad roads, huge levies, administrative bottlenecks, and poor regulations frustrated our business in different states across the board. The company was struggling to break even,” Ayodeji said.

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Also on the list of department stores that reigned pre and post-independence were UTC Nigeria Plc, a subsidiary of Union Trading Company, Basel, Switzerland; and Domino Stores.

Kelvin Atafiri, CEO of Cavazanni Human Capital Limited, said family businesses and companies have a tendency not to survive beyond a generation, especially not outliving their founder.

He said one glaring example that sprang to mind was the Concord conglomerate founded by Moshood Kashimawo Olawale Abiola in the 80s and 90s.

“African CEOs in general and Nigerians in particular typically do not like to think or talk about death, grave misfortune, or permanent disability. They make zero plans for successions,” Atafiri said.