The learning curve: investing in Nigeria.

Position:SINGAPORE-AFRICA - Interview
 
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"We have learned how to manage the volatility and the complexities of Nigeria and we are doing fine, and the security environment has got much better," said Amit Lohia, MD of Indorama, in an interview with African Business

African Business: You have been in Nigeria now since 2006, almost 10 years. What are your principal activities?

We manufacture polyolefins there with a gas cracker, which is a process to convert gas into ethylene and propylene, and then you convert that into polypropylene. The market has been growing domestically every year, year on year, for the last three years and we sell practically everything locally.

We didn't really plan to be in Nigeria, it wasn't part of our business plan, but in 2005 a trade delegation from Nigeria came to Indonesia and my father was persuaded by one of the ministers to attend a trade fair. There he heard that Nigeria was privatising a number of petrochemical companies. That sparked his curiosity and he went to investigate, not expecting anything really, but he came back very impressed with the worldclass petrochemical complexes that were operating well, and he believed they would be very interesting prospects for us to look at.

There was a tendering process to privatise a fertiliser company and this gas cracker complex which we ended up acquiring. In the fertiliser complex we were very successful, and we ended up being the highest bidder and that's how we got into this business in Nigeria.

How long was the process between deciding to invest and execution?

It was a 12-month process; travelling to the country, looking at the facilities, conducting due diligence, negotiating with the vendor, then the tendering process before closing the transaction. It was not too long, 12 months is pretty quick.

This was during President Obasanjo's time and his administration was very committed to the privatisation process and executed it in a very transparent, fair way.

I believe President Obasanjo was quite a big fan of the Singaporean model anyway. He visited quite often.

I never met him personally, but I know they really were trying to do the right thing by raising these, from their point of view, "dead investments", realising their inherent value through a private operator like us.

How have you found it? Nigeria can be quite a taxing place to operate.

Like any new country, there's a learning curve. In a country like Nigeria, there's an even more difficult learning curve. The initial two years were very...

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