Aderemi Makanjuola: We Opened the Oil and Gas Service Shuttle to Nigerians

The Chairman of the Board of Caverton Offshore Support Group, Mr. Aderemi Makanjuola, is a visionary entrepreneur who transformed the oil and gas aviation service sub-sector, opening it up for further participation by Nigerians, which hitherto was the exclusive preserve for expatriates. Not only did he break the jinx, but Makanjuola has also provided the key to make Nigeria an operational hub for helicopter service in West and Central Africa. He has also pioneered the establishment of maintenance, repair and overhaul facility that would serve the sub-regions. In this interview, Makanjuola talks about his company’s exploits and impact on Nigeria’s development with Kunle Aderinokun, Funke Olaode and Chinedu Eze.

Excerpts:

It’s been a long while that you started this business. How has it been?

It has been quite interesting and challenging. Everybody says it is difficult to do business in Nigeria. But I don’t think so because if you do it right and you believe in doing the right things properly, I am not sure you will get into many problems. For a businessman, why we get it wrong is that we are very optimistic. In business, you don’t have to be optimistic. You should be a pessimist. But you should be extremely confident that ‘this is my goal’. To me, every wall is a door. So whatever difficulties I am going to encounter, I am going to conquer it. I am not going to look back to say ‘it is the fault of this or that’. Everything I want to do, the success is mine, the fault is mine – and you leave the rest to God. But once you believe in that, then you can do so many things.

The government has done their best in many ways for the country and for the people. In our own case, we went to collect money at the aviation intervention through the Bank of Industry. We paid back. We went for another one, we paid back. They never stopped giving us. But when you collect money and the first thing you do is buy a Rolls Royce, you have already spent the profit before you even start the business – you don’t get it right that way. That is the problem everybody is getting into and it is creating a problem for business people in Nigeria.

You operate in a business landscape where the risk is high. How have you been able to cope with the challenges?

What I did initially was to look at the problem. What are the things that are making it difficult for a Nigerian to get into aviation because there had been two companies running the aviation industry – Bristow and Aero? If Bristow was bidding with Shell, Aero would not bid there. If Bristow was bidding with Total, Aero would not go there. So it was just the two of them. When we came in, the first thing we did was to say, ‘what are the real problems that are making it difficult for Nigerians to do it?’ The first thing we saw was that everybody tries to know the minister of aviation or the minister of petroleum resources who gives the green light if you get a helicopter you can operate.

You get the helicopter, you get the contract but you can’t operate it because the stakes are high. What are the stakes? You must have an infrastructure. You must have a hangar before you do anything; to put your helicopter in and to make sure you have the engineers – you have everything that needs to be done. So it takes a lot of investment and we saw that coming. The first thing we did after getting our licence was to say, ‘let’s build the infrastructure’. We built the helipad in Ozumba and we built the hangar in Ikeja. Having done that, we knew we were set for business. We knew it was difficult to get into the business as fast as one would have wanted. In the oil sector, the bidding is every five years. If you miss this year you can’t bid for the next five years. Somebody would have won it and it is always five plus two.

But between that, we started learning the odds and doing the shuttle service. With the shuttle service, they saw that we were very good. We have a good safety record and we keep our books. Soon, everybody was thinking of patronizing us once there was an opportunity to do so. They wanted a fresh blood in any way – luckily, they wanted an indigenous player. The local content also came into play around that time – then, of course, we were lucky – that helped us to get more people. We began training them – before, for every three expatriates you only had one Nigerian pilot. But now, for every single expatriate, we have four Nigerian pilots.

We have trained pilots. We are training upcoming ones. Yes, they are bonded. Once they finish their bond, they begin to earn as much as anybody in the world. Before, Nigerians earned less than the expatriates. With us, Nigerians earn the same as the expatriates. Even if we are paying in naira, we pay the equivalent of the dollar that they should get. That has helped the business. It has also helped Nigerians, spurring on others to imitate us. I’m convinced Nigeria should be a pool for other countries to dip hands into and make use of our pilots. These pilots can work abroad – just as we had to go to India, the Philippines and other countries to employ pilots. But we have stopped that now. You can’t see many Filipinos in Nigeria anymore. We have trained over 240 Nigerian pilots and engineers – they are working with us. Some have left.

We’ve been able to plough back the profit into the business by training our staff. Also, there are other spill-over opportunities: where do we go to repair the helicopters? It is done abroad. Can’t we do it ourselves? Yes, we can. So we decided to build an MRO – Maintenance, Repair and Overhaul. Where did we get the money from? We got N3 billion from the government and we put N1.5 billion into it. It is being completed now at Ikeja and it will open next year.

There was another thing that is affecting the country: the economy and ourselves – every six months all pilots must go for a refresher course using a simulator. There was no simulator anywhere in Africa. You could only get it in Canada, America or Dubai. We have recently decided that we are bringing in one and we have just signed the agreement with Thales in October. The French government gave us €8 million to bring it in so that we can train our pilots in Nigeria and also train people from other countries.

Regarding the MRO that we are building, if you want to paint your helicopter you have to take it out. Now, we can paint helicopters here in the MRO and we can do everything here. Then, there was the need for manpower. There are Nigerians to do that. I believe in interacting with the universities and other institutions to make sure everything works. They use their engineering departments to see that when students graduate there is work for them.

What is the business model for MRO? Is it strictly for your company’s use?

We are commercialising it. Even the Honeywell Group that sells spare parts to across the globe has come to us saying they want to be our partners – they want their spare parts kept with us so that in Africa anybody coming to Europe to say that they want to do this and that will be told to go to Caverton. The Rolls Royce people are also thinking of bringing in their engines and other things. In Nigeria, the way the minister of aviation is trying to do it is to make Nigeria the hub. These are the things to make Nigeria the hub. We are really doing our best to ensure that we are part of it.

What is your interest in maritime?

We’re still in the maritime enterprise, but you know the helicopter venture is capital intensive – it is more interesting than shipping. When you bring down your helicopter and switch off the engine that is the end. For the ship, the day you put it on water, it goes on and on. You feed the pilot, watch them, and clothe them. You do everything for them. You can’t switch off the engine. The day you switch off the engine, that is the day it sinks. So it is a tough business. We’re still there and working with NLNG and other LPG people. But space and the spheres are not as big as what is in a helicopter. We are even thinking of helping other Nigerians who want to come in to say you can use our facility to start – you can do this here. A lot needs to be done and we need other people to come up.

There seems to be a lull in the oil and gas shuttle service. Is it peculiar to Nigeria?

No, it is not peculiar to the Nigerian situation because everybody is careful as to when and how to bring up their oil. When the price was $100 to a barrel, everybody was bringing it out. But now it went down to $25, it came to $30 and $50. Once you sign a contract with the helicopter services, you have to pay them. But pay them with what? If at the time you signed the contract, oil was $100 per barrel. When they start pumping out for you, it comes to $50. You still must pay them at that $100 per barrel. Even with the contract, they have to call us in to discuss: ‘Give us discounts and the rest of that because you know we signed when it was this and now it is this.’ That’s the reason there is lull all over the world; they are laying off people. They are trying to say to people, ‘come back when you get this or that’.

What role did you play in the local content policy of the federal government?

What we did was to look at what has been happening. To help the local content, we believe that more Nigerians need to be trained. Nigerians are not able to train because they will go to Zaria, get the initial training and go for the commercialization. It becomes difficult because it costs nothing less than €100,000. We, therefore, decided we would help. We decided to them and pay what needs to be paid. We also decided to pay their salaries while they are on training. When they return we’ll still be paying them but not as high as they should get until their bond tenure expires. We have been able to do that successfully. We have trained, as I said, over 240 people. That has worked for everyone because if you are trying to satisfy your wants, you are indirectly satisfying other people’s needs as well. The government is very happy about it. The government also had this issue of training people under the PTDF.

They train them without giving a consideration to where they will work. We contacted them to know how many pilots they are training. They had trained about 20 and wanted to train another 10. We asked them where those trained were working. They told us they were not working because nobody would take them. These ones need to be trained, specifically to what the IOCs want. Therefore, we took the 10 and asked the government to pay the cost they would have incurred to train them abroad with the condition that we’d train them and employ the trainees. They are working with us now and they are all pilots.

Could you please assess how the industry was before you came in and the contribution you have made?

Before we came in if you were a Nigerian you couldn’t be an engineer. You couldn’t sign out a helicopter. You could only be a fitter. So all you needed to do was to go for an additional training and you’d become a pilot. The training is very expensive Nigerians weren’t trained. They left them as fitters. When we came into the industry and began employing Nigerians, we saw there were a lot of fitters inherited from Bristow. We called in the manufacturer to train them in Nigeria. We trained 50 people and we got 50 engineers overnight. So, all the expatriates had to go home because Nigerians are now the ones doing the work. The Nigerian staff’s salaries went up; their families were happy. It is the same thing with the pilots. You couldn’t be a captain; you could only work for a particular period and you could never earn the same as what an expatriate earned. We decided that both expatriates and Nigerians – once they have the same qualifications and do the same work – should get the same pay. That is how we broke encumbrances. Nigerians are now able to hold their heads high.

You have maintained a good safety record. What is the secret?

There is no secret except that we believe in zero tolerance for error when it comes to safety. Also, we operate to ensure that safety comes first in what we do. Life doesn’t have a duplicate. We have maintained high standards of safety for eight years. We didn’t have any accident or incident – thanks to God. Three-quarters of or 90 per cent of our staff are Nigerians. We should take pride in ourselves that we can do it. We are always able to do it; and with God on our side and with confidence, there is nothing that we cannot achieve.

Do you intend to have a charter or commercial service in future?

No. I don’t have interest in any commercial service because of the way the commercial service is being run presently. Nigerians can’t make money out of it. I really credit the people doing their best to do the shuttle service between Lagos and Abuja and all that. They don’t make money. They can’t make money. One, the price is low. Two, it is too short. It is 45 minutes. But if they are able to route Lagos, Abuja, Port Harcourt, and Malabo, and come back they will make their money. Therefore, West Africa has to be better than what we’re doing now. We must ensure that the aviation sector is run in such a way that benefits everyone. There is no profit because it is a flight that must leave by 7 am and at 7 am if you have 20 passengers out of 100 seats you leave. Everybody goes to Abuja in the morning at 7 O’clock so all flights go at the same time. Everybody comes back at 4 O’clock. Between that there is nothing. It is a tough call. British Airways and others are doing long hauls. They have the experience. They are properly backed up. They have the staff. Nigerians need to train staff, need to do many other things before it happens. The Nigerian Airways was doing well then.

Are you planning for an international operation in the foreseeable future?

No, we don’t plan to do any international operation in that sense. If we want to do an international operation, we’ve to get invited into the country and operate in that country for them – like we’re presently operating in Cameroon. It is not from Nigeria to Cameroon because even to do that you will have to get many things in place. But you can operate in a particular country. For instance, we have been invited to Equatorial Guinea to operate and train their pilots as we have trained Nigerian pilots. It is the same thing Cameroon is asking for. Equatorial Guinea has been operating helicopter service to produce its oil for the past 30 years. They have only two captains who are locals and they see that in Nigeria, we are doing it ourselves. They said, ‘Why don’t you come? Come and help us set up our own.’ We will do international operations but located in the countries that require our services.

Tell us about the recognition and laurels your group has received

We’ve received a lot of awards – like in the safety category. Every year, we win the Shell Award for Safety. We have so many of that. There is a particular world helicopter body, which has 15 companies sitting on its board, Caverton is the only black company representing Africa on that board and that is because of our safety records. Our managing director is the only person that represents Nigeria.

With your knack for airline operation and management, what is your background?

I was trained as an economist. I had my first degree in economics at the University of Leicester. Later, I went to the University of Manchester, where I did Manpower Planning and Training. I came to Nigeria to do my youth service in Kano with Barclays Bank, which later became Union Bank. After working there for 10 years, I worked with Devcom for another 10 years. So I have been able to see the perceptions of what is needed. When you are a banker you see it all. It was around that time Nigerians were being given oil blocks and none of them was able to start the operations because of one thing: they didn’t have a helicopter to go to their rigs. Even when they were about to go instead of Shell allowing them to go and do their campaign, they blocked them and took the helicopter away from them. I saw that that was something that was missing. I was interested in that. You don’t need to be an engineer to own helicopters. I have been trained in leadership skills to bring the right people together. When something is wrong, say it’s wrong; when it’s right, say it is right. As a leader, all you need to do is to look for the truth. Once you are able to get to the truth, you will be able to operate effectively. If you are not able to get to the truth, you will not operate effectively.

You studied economics. You worked in the bank. Then, you ventured into the aviation sector where you have prospered in the last 17 years. What were your dreams as a child?

My dreams were in two folds: the first is because I was taken care of by my parents I always prayed to be able to take care of them. Also, I always prayed to be someone of importance in life. When I started growing up and thinking of having a company, I hoped and prayed that I run a company that would be a household name like Coca-Cola. At the age of 70 now, I am not asking for prosperity but posterity. When you are asking for posterity, you must have done a lot to make sure that people will remember you. Because you didn’t bring any money (into the world) you won’t go with any money (when you die). It is either you’re forgotten the day you die or after a week or so – or another 10 years, when there’s a remembrance for you and somebody sees it in the papers and say, ‘You remember that man?’ But if I leave behind Caverton and there is posterity with it people will still remember me.

You’ll be 70 years old on November 24. How will you say life has treated you?

Thanks to my parents and my grandparents who brought me up. It has been very wonderful. As a young person, you don’t know what it takes to be successful. They will tell you; they will teach you; they will train you. It is after they have left you that everything starts dawning on you and then you start saying, ‘Oh, this is what my grandmother told me!’ I was talking to my wife last week. I said, ‘Look at my nails. They are long. My grandmother must not see this!’ She brought out a nail cutter for me to trim them. That is part of the training you have got that you don’t even know you had and it is imbibed in you. When I was working with Dr. Mike Adenuga, I used to believe that he was always a bit hard on people. But when I started my own business, I thought I should be harder. That is part of what you learn in life and what you learnt unknowingly are the things that come to help you as time goes on. I have had a good life. I have been very successful. I have a good family: my wife has been very supportive. She has been able to help in training the children. I play the good cop. She plays the bad cop. She is stricter than I am. We have been able to bring up our children in the way that is good and they are bringing up their own kids now.

How will you describe your growing up in the Lagos of old?

Lagos of old was fantastic because we were all over the place. In the morning you went to school. In the afternoon you returned home. We went for after-school lessons. Later in the evening, we went out to play with our friends. And it was not that when you committed an offence in one particular place, you’d think you would go scot-free? No. The person you offended would beat the hell out of you. He would take you to your mother and say, ‘I have just finished beating him. This is what he did.’ They would beat you again. The discipline was fantastic; the families knew one another and everything worked – that was Lagos. People came in and Lagos was able to accept everybody.

In Lagos, there was no Christianity or Islam – they were the same. There were no Igbo or Yoruba. Even when the Igbo came in they were encouraged. They asked them to leave their yams – they went and came back again and it was quite nice. But then things started changing because we couldn’t say that is the kind of life we want to live forever – development must come. It is affecting us now. We need to accept one another. A Yoruba man could go to an Igbo man’s land and say, ‘This is where I want to live my life because I like it here.’ The same thing could happen to a Hausa man anywhere. We need to learn how to accept one another and say, ‘Hey, we are one!’ But we are still finding it a bit difficult.

At 70, would you say all your aspirations have been fulfilled? Are you beginning to slow down?

If you have lived up to the age of 70 and you know people who died at the age of 40 or 30 – incidentally, my own brother died about two weeks ago at the age of 68 and he wasn’t sick –, you would know that life is not something you can take for granted. Except you have signed a pact with God that you would live to be a Methuselah. Every day one lives, one has to thank God for being able to wake up. So if you have lived to be 70, for God’s sake, slow down.

Looking back, if you could turn back the hands of time, are there things you would have loved to do differently?

As a mature man now, you have grown. You’ve been able to do things the way you want without thinking about the consequences. There are little, little things you have done and you say, ‘Oh, I should have done it that way. But it is a matter of hindsight.’ I was talking to a friend of mine this morning and we were saying, ‘Now that we are growing older, we are being very forgiving and very understanding. That somebody who has not been able to reply to a text, why do you need to be talking to him?’ My friend said, ‘You know our own educational background and responsibilities are different. He did have a school (-leaving) certificate, but you went to the university. You have a responsibility towards your staff and all the rest.

The first thing you do when you wake up in the morning is to look at your emails to be able to answer questions and be responsible. So for him, it is nothing.’ There is a lot of understanding we should train our children to imbibe in their lives so that they can see the other side.

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