…Financed Nigerian companies with nearly a billion dollars since 2006

HOUSTON – Ed Kostenski is the founding President of Nationwide Equipment a wholly logistics and finance organization based in the United States of America but with operations around the world.  According to him about 80 percent of his company’s earnings are from its Nigerian operations and as such Nationwide has financed Nigerian companies with nearly a billion dollars in the last 8 years.

In this interview which held on the sidelines of the just concluded Offshore Technology Conference in Houston, Texas he opened up on a number of factors affecting Direct Foreign investment in Nigeria as well as ways to fix those challenges.

Our US based correspondent Joseph BAMIDELE was on hand for this special interview.

Tell us about your company Nationwide and its scope of operations?

Nation Wide Group started about 31 years ago in 1983 and we are focused on emerging market mostly to supply financing and infrastructure equipment, oil and gas equipment with major emphasis on financing. Our major strength is not just to supply equipment because anybody can do that but it is the ability to be able to structure a plan that you will be able to give a general contract, project development company, or service company, the ability to buy now and pay later because everybody needs that flexibility credit terms to be able to go on in their project, that is part of the greatest strength Nation Wide Group has for the Nigeria market.

What various segments or Units makes up Nationwide Group have?

In terms of units, we have four divisions and we are active in Nigeria.  The group is just the umbrella of other companies. The Nation Wide Equipment is the recipient of two (2) Presidential awards one given by US former President George Bush on behalf of the Secretary of Commerce in 2004 as a President E-award. The second award is due to our continuous expansion of our US services, Nation Wide received an award that was given by President Obama on behalf of US department of Commerce.

You can Google Nation Wide Group and look at the awards given to us by the US government.

Which of your units or services is most active in Nigeria?

Nationwide Group Equipment, We supply quality infrastructure equipment with warranty including oil and gas equipment and marine equipment. The second is the Nation Wide finance arm, where we‎ finance what the group sells for the client and if they have other equipment to purchase for other projects, we will provide the money for them even if we don’t have direct related supply chain to them.

The third division is the Nation Wide Development where we actually get involved in the projects themselves bringing in technical support partnership from around the world to Nigerian companies that requires skilled management and more of an investment upgraded level.

Are you specifically saying Nigerian Indigenous companies with ongoing projects can consult Nationwide for finance or technical manpower?

Yes! We also provide that‎, we come in as an extra market to assist them to acquire the right talent and the reason is that they are already working with us either in financing or supply of marine, oil and gas equipment and it goes hand in hand because we see the challenges of these Nigerian companies ‎and what they need. It is a bumper package for them and they decide on what they need. 

Between the area of financing and supply of equipment where will you say you are stronger?

Oh! That’s a very difficult question because in one year it could be more on financing and the other year it could be on equipment supply but it could be pretty 50, 50.

In Nigeria, which would you say is stronger for you?

In Nigerian there was a time that it was equipment and due to the crisis in 2008 till date emphasis has moved a lot to financing rather than equipment. Everybody seems to have equipment but not everybody has the ability to package finance ‎for his client to where they can do project and we provide 100 per cent financing which is very rare with equity contribution.

We work with local banks that are willing to‎ put a guarantee on it and we provide all the funding and arrange all the shipment and importation relating to the job from site testing to inspection and everything that is needed to make sure that the end user, the general contractors is successful and he is implementing all the equipment to fullfil the job because if he fails in any way it is something we take seriously but we want them to succeed, we want the borrower to pay back, we don’t want anything that would put them behind payment schedule or challenges that they might have on the project. So we go further than just a lending institution.

How do you go about structuring? Give us an example of how you do your structuring 

For structure financing there is a book you can read,‎ and today in Nigeria we have done over $800 million since late 2006. Access bank and Eco bank were the first to do transactions. We were one of the first groups to take unconfirmed bank guarantees on the strenghgt of bank balance sheet in Nigeria in 2006 and actually provide credit which is unheard of in 2004 and 2005 when no one was taking Nigerian banks guarantee. It was not till the banking reforms in 2006 under Obasanjo and Charles Soludo as CBN governor at that time that actually pave a way to merge banks and force them to raise their capitalization and ensuring that these banks are stronger and as a result over 300-plus banks merged and were forced to raise their capital.

So the international community for lending could look at that and decide to credit these banks whereas in the past they never had it before and Nationwide finance was able to capitalise on that and assist Nigerian banks to raise credit offshore, off the bank guarantee and on unconfirmed basis‎, there was no asset as at that time and it was horrible in 2006.

Nationwide finance is the most successful financial organisation in Nigeria.

Which banks have you worked with over the years?

We’ve worked with quite a number of Nigerian banks, part of them are Access bank, Wema bank, Keystone bank, sterling bank, Enterprise bank, former Afribank now Mainstreet bank, former Bank PHB, Zenith bank, GTB, Diamond.

In Liberia we raised $5 million credit for GTB and Liberia was not guarantee by GTB in Nigeria and nobody was doing that.

In the area of equipment supply, who does the selection?

It is the client because the buyer is responsible for paying back the loan because they have the best idea of what their business need the most. We guarantee the banks and approves the credit and the client is the one that sizes up the project with the type of equipment that the project needs and we will be competitive as we can if they have alternative sources that are more competitive and better terms we will supply the money we let the client know what is best for his project.

How is the Nigerian business environment when compared internationally?

Nigeria is now rather the top10 biggest global economy ‎in the world and Nigeria is the biggest market in the whole Africa with soon to be 200 million people probably within the next six to seven years and that is not something to be taken lightly it is something that should be taken seriously and we recognize the demand in the market place for goods and services.

Do you have any challenges doing business in Nigeria?

Sure! If we didn’t it wouldn’t be normal business‎. We had challenges but there is nothing that we have not been able to overcome and I will give the credit to the ingenuity, the aggressiveness and willingness to make it happen of the Nigeria people because they are probably tough out of all the African countries I have stayed in my life, they are the most creative and tenacious, ingenuity minded people in the continent without a doubt.

I have met international business men around the world and we agree to that statement. If there is a way to do something, they will find that way and that is how any economy can grow. That spirit of entrepreneurship, that drive that can really grow the market place of any economy to the level that it needs, just to keep up with the growth of the population in Nigeria.

There are lot of challenges in the future to meet the up the growing population of Nigeria in terms of the new cities to be built, new projects, housing development schemes and health care, facilities, infrastructure, water supply. So it’s going to be a big challenge in the next 25 years for Nigeria. We have seen that so we need to finance projects which are crucial to the success of Nigeria as a country.

How much of your entire operation does Nigeria account for?

It will be conservative to say ‎85 per cent. Some years it could drop to 75 percent but in average it is between 75 to 85 per cent. In terms of global operation, it changes, the wind of trade changes over time because in some years oil prices could be above 55 per cent and we might not be active in Nigeria yet we could go above our target that was announced and we might probably be servicing more of the gulf fields in places where the world emphasizes our money.

There are strategic members in the world that would just balloon the prices in the market and naturally oil prices drops there would probably be a shift in our business percentage based on how much we are doing in Nigeria.

It would be right to say that 70-80 per cent of your business comes from Nigeria?

In fairness, yes!

Most business men complain about government policies and they are affected by its inconsistencies, what has been your experience in this regard?

Yes we’re affected as well! That has probably been the biggest frustration for us working in Nigeria in the last 13 to 14 years. I would say the operation of the port in Lagos is very frustrating, challenging and can be very depressing at time. You can have all your paper work in the right manner and your importation is correct but sometimes your goods just get delayed.

They get cleared but they just get delayed and the demurrage ‎cost gets accumulated to your account without any reason and you would pay them or you won’t have your goods cleared. That is enough to want to make you go to court or something. It would discourage most businesses if it happens repeatedly which it does but it is getting much better in the port.

There are other challenges apart from the port, I think that the taxes are too high on the people for what is been provided to them as a people. What could be done with the resources is not happening as fast as it should be. Am not saying they are not, they are.

The growth of Nigeria is tremendously expanding and there are projects that needs to be done in a timely fashion but it is not been done for some reasons. I will give an example I drove by road from Lagos to Benin Republic. I have driven from Benin to Lagos it was not that bad but try the other way with just a little rain fall, what should take an hour on a typical African high way may take you a day or 14 hours.

That is absolutely ridiculous with a country that has enormous reserves, the road construction is not a big project but you will realize that is a bottle neck for growth in the country that is one example.

 The second challenge is at the airport but it is much better now than what we use to have several years ago.

 As a result of the growth challenges, the expansion or the services does not keep up with what is happening in Nigeria, that is what I mean. The infrastructure at the airport is also challenging. People are just getting in and out of the country; there are no VIP services inside Lagos‎ for average and influential business people. You are just thrown outside there and it is like people pouncing upon you and it’s like you don’t know where to go.

There should be a service for people who want to come into Nigeria and invest, a small investment be it service provider and those who want to invest billions of dollars in the country to be able to feel secure immediately when they land because first impression is lasting, that is something I think should be worked on.

From your own point of view, what is good about doing business in Nigeria?

There are a lot of good reasons in doing business in Nigeria; I can give a pretty list on that. But the two most important is the ability to grow your business in very quick booming level.

You can come into Nigeria and start out a humble and small business and in the next three months, you could have large orders in the history of your organisation and that is depending on how you service people and how people are comfortable with your services.

I have worked in several companies in the world and I have never seen any country where you can accelerate in prosperity and growth as fast as in Nigeria. It is very different with the rest of the world and that is very encouraging to the energy and intellectual business people.

I would say that Nigerians are smarter than you think. People may have ideas about Africa or Nigeria but they are very intelligent, they know how to get things done quickly and that is efficient.

I have seen things happen in Nigeria much faster than America and I praise Nigeria for that.  ‎The infrastructure wheel is growing and that would make any business to grow.

What do you think is responsible for the speed of growth in Nigeria compared to other parts of the world‎?

I see the willingness to make business and the willingness to serve in the Nigeria people. They are willing, they are able, and if it can be done they will do it. I am speaking on the private level not government. The private sector is very dynamic, very exciting, very positive, optimistic and full of energy and that would always foster growth. Nigeria has a lot of things that can cause growth of any goods and services pretty rapidly.

Apart from Nigeria which other African countries do you have operations?

We have South Africa, Zambia, Ghana, Kenyan, Senegal, Angola they are our biggest trading partners. Elsewhere we just do business.

What type of equipment have you supplied?

Our equipment division supply mining m‎achines, oil and gas, sea going vessels to service the oil majors working in offshore platforms. Last year we finance a drilling rig not forgetting those indigenous base companies. These are companies that could not get financing without our help.

You mentioned mining equipment, what is your assessment of Nigeria mining sector?

There are lots of steel in the mining and ore sector of Nigeria,Zinc and other mineral resources. These are the main minerals, we supply equipment to those industries that are actually doing those type of digging and findings, we assist the granite companies as well, drilling equipment, warehousing, polishing factories where these mineral are actually taken to.

Do you see the prospect of that company expanding?

The sector is huge but it is not expanding as rapidly as it should. Running a mine is not like running a shoe store, it is capital intensive, it is time intensive, there is risk related to it, it is very labour intensive and you must have good management skills, good servicing of the equipment used on a daily basis.

I think those few services are why the mining sector has not blossomed as expected in Nigeria‎.

30 years down the line, where are you headed with Nationwide?‎ What are your short, medium and long term vision for the company?

That’s a very big question. On the short term we see the company’s continuous strength in Africa to continue supporting our customers relating to the project, financing infrastructure mining, oil field and gas equipment. That is not going to change because we have orders on a weekly, monthly and continuous basis.

In the medium term, we are putting together facility in Nigeria and other countries and expand our services in rental and lease in Nigeria and to service the oil and gas sector of the world. We have ample underground equipments that they need to go take to the field and work.

On a long term we see Nationwide continuous expansion ‎in and around the African region to duplicate what we are doing in Nigeria because the population is much more than neighboring African countries we will be there to service them, we want to expand rapidly without the need to acquire debt financing.

How soon will you commence the leasing and rental project?

Based on what is on ground now, I would say by the end of this year we would have the leasing division. We already have a leasing division in America.  Anything t hat the customer needs from medium to long term. We would probably not buy a half a million dollar crane for three months but if the market demands we would take the risk and buy equipment that we know are of high demands in any country or region and make it available and market them.

Does it include small and medium scale enterprise?

Yes we do! Our organisation for many years has a training program for companies that need to train their staff in the area of technical advancement or servicing or repairing of such ‎equipment. If your machines are down nobody is making money even in small scale, it hits the bottom line.

We have a work shop program where we have taken many Nigerians and we run them through three to six months course to be able to help them advance their business‎ mostly in trouble shooting skills and industrial equipment. We offer services free of charge, they bring the people here we assist them with Visa, accommodations etc. We do that to our clients, we train their people in the workshop.

 Which companies have benefited from this assistance? Be specific

 We keep confidential those we do business with but I would refer more to the banks‎ but there is one group that we raised $20 million for who is a project service Company for Shell Nigeria. Another company Nationwide raised money for and was able to help its customers to advance their business was Divine Marine Shipping in Nigeria; if they need the vessels we supply it and the finance. Another group is Morlar a shipping company, they work for NNPC and some oil majors to move product in and out of Nigeria, that project worth is about $25 million.

Another company is QMC Nigeria which is a core owner and operator that supplied the granite for the expansion of Eko Atlantic which is an ongoing project.

We also serviced Floating Berg specialised in marine vessels for Chipo. These are the people that we have serviced.

 In assisting these companies, what comes to Nation Wide‎?

 In long term business we hope for‎ more than anything, we go into relationship with clients and customers with the believe and hope that we will grow the relationship more than just make the money. We offer help, solutions, technical supports, ideas and possibly joint venture so that we can do things together and team up to grow other businesses.

 When you have that attitude of serving and in doing your best for customers the money, the dollars, the naira will follow, it is just natural. If you go into business looking for the money, you will probably fail one day soon. We can’t do that! People will come to you and see that you are not out to get money, nobody likes to see that people are out in doing business to make money. People want to feel important and respected and that has been the spirit of Nation Wide Group.

 We are a no fee based company for financial services which means that we don’t charge you until the‎ loan is successful and closed. We don’t encourage any of our staff to solicit for any money any time as up front.

 What makes Nationwide unique such that clients would rather deal with it as against other financial services providers?

 I think it is personality and we are fun to do business too, we are dynamic, I will say a lot of ways like Nigerian companies ‎in America and our ideas and our approach to business. I will say our greatest strength is that we find a problem and solve it relating to the customer finance. We don’t just give because we can’t just get it done; we sit down with our client and talk about his business. We tell him the challenges that he has and probably going to have with individuals and organisation. If we can’t help them we will direct them free of charge to the right place we believe will help the organisation not just in financial services but in any way possible.

 Can you give us a figure of the credit lines you have given to Nigerian banks?

 Nearly a billion dollars since 2006 when the banking reforms took place. The banking reform was put in place by former CBN governor Soludo and former president Obasanjo.