Elumelu shares Heirs Holdings Group turnaround success story, pledges partnership with FG to boost economy
Chairman of Heirs Holdings Group, Tony Elumelu, has explained the Group’s success story in investment portfolios spanning power, oil and gas, financial services, hospitality, real estate and healthcare sectors, operating in twenty-four countries worldwide.
Elumelu also expressed readiness of the Heirs Holdings Group to support and partner with the Ministry of Finance Incorporated (MOFI) in combating the various economic challenges facing the country.
Elumelu revealed this while speaking on Tuesday (today) at the MOFI Public Wealth Management Conference held in Abuja.
MOFI is a strategic institution that will support the Federal Government’s efforts to address economic challenges and drive growth in the Nigerian economy.
Elumelu who also doubles as Chairman of Transcorp Group and UBA Group explained: “There is no rush to see immediate profits; we must have that mindset if we are to fully unlock the value contained within these state-owned assets.
He advised that the Ministry should “First set the strategic intent, prepare the milestones, know how you will be judged, and then execute, execute, execute – with discipline and always with that strategic intent in focus.
Founder of The Tony Elumelu Foundation, while using Temasek as a case study, said, “When I was told of the subject, I instantly drew a parallel with TEMASEK in Singapore.
“TEMASEK started out in 1974 with the same aspirations as MOFI.
“Temasek was established with state-owned assets worth $300 million; today, those assets are now worth approximately $300 billion.
“How did this happen? In 1974, following independence from the British, the Singaporean government found itself as the owner of a variety of new state-owned enterprises.”
According to him, “The Singaporean Government felt that it was necessary to separate governance from business management.
“This stemmed from the principle that it was not the business of the government to operate the businesses it owned.
“This principle led to the establishment of Temasek in 1974 to own and manage the assets held by the Singapore Government.
“The arrangement allowed the government to focus on its core role of policymaking and regulations.
“Today, Temasek has investments in the strategic sectors of its economy to unlock significant value: Transportation, industrial, financial services, technology, telecommunications, real estate and consumer goods.”
Elumelu noted that Temasek typically owns significant stakes in companies, often with a focus on strategic investments that align with Singapore’s economic development goals.
He said, “Temasek also actively manages its investments, engaging with portfolio companies to drive growth and value creation.
“Meaning that they are not a passive investor that sits back but more like a Private Equity firm that works closely with management to unlock value.”
The business mogul stressed that “We need this approach in Nigeria.”
While narrating the turnaround success of the Heirs Holdings Group, Elumelu said the Group are known for how to turn around businesses.
“Our expertise is in unlocking the value in the assets we hold.
“And our track record speaks for itself.
“The turnaround of a defunct Crystal Bank birthed into Standard Trust Bank, which is now part of today’s United Bank for Africa (UBA).”
According to him, “This was not a state-owned enterprise, but the same principles for turnaround occurred here.
“We had a clear vision from day one of what we wanted to achieve in the financial services industry.
“We set out clear goals, which we labelled our strategic intent, and worked assiduously to ensure we met them.
“Today, UBA Group operates in 20 African countries, the UK, France, the UAE and the USA.
“We are the only African bank with a deposit-taking license in the USA.
“In 2010, following my retirement as the CEO of UBA, and in looking for new opportunities and ventures, the Heirs Holdings Group, my family’s investment firm, acquired Transcorp Plc.
“At the time, Transcorp was formed to lead the industrialisation of Nigeria.”
He spoke further, “The only asset Transcorp Group had back then was this hotel in which we are all gathered today.
“Today, Transcorp plays in the hospitality, power (both in generation and distribution) and in the oil & gas sectors.
“In Power, we acquired the 972MW gas-fired Ughelli Power Plant and ramped up its generations from 160MW to 701MW within four years of taking over the plant.
“Our Ughelli Power Plant is the first privatized power company to be discharged from post-privatization monitoring having surpassed all set targets by the BPE and the National Council on Privatisation.
“Transcorp Hotels has also been issued a Certificate of Discharge by the National Council on Privatisation.
“We are confident that once we fix the issues of gas supply in Nigeria, we will be able to generate enough electricity to significantly power our country’s industrialisation.”
Elumelu explained, “We have partnered with the FG to unlock the value of state-owned enterprises, and we have shown how private sector efficiency translates into profitability and increased prosperity.”
Elumelu said, “In our group, we are guided by the philosophy of Africapitalism, investing for the long-term, not the short-term, in strategic sectors of the economy that not only create profit but also create social wealth for the communities we operate in. It is the philosophy that drives our business, but it is also what drives the Tony Elumelu Foundation – why I have catalysed thousands of young entrepreneurs across Africa – why we have funded, trained and mentored them to create a new generation of Africapitalists.”
While listing Leadership Capacity as one of the key success factors, I advised the ministry to assemble the best in the industry who possess a turnaround mindset to transform the state assets and set performance targets for them.
Other key success factors he listed include creating a high-performance environment, a culture of excellence, corporate governance, risk management, and non-interference in management.
Elumelu further saluted MOFI for setting out these goals, for looking widely for models and approaches – and for bringing a private sector mindset to the stewardship of public assets.
He added, “Our Group stands ready to support and partner with MOFI in whatever way we can to ensure that this initiative is a long-term success.”
