Alade-Akinyemi: Growth Opportunities Abound in Nigeria

Mr. Lolu Alade-Akinyemi, a certified accountant with 20 years of experience leading and transforming finance & supply chain teams in complex, multinational companies, is the Chief Financial Officer and Supply Chain Director of Lafarge Africa Plc. He spoke on the operating environment, the company’s performance and his career. Goddy Egene presents the excerpts:

How is the operating environment now affecting the cement manufacturing industry?

The operating environment in Nigeria is both challenging and dynamic. At Lafarge Africa Plc, we can see the growth opportunities in Nigeria despite all the macroeconomic challenges and complexities in the operating environment. The current challenges have impacted the cement industry value chain. In the last two years, naira has lost approximately 35 per cent in value coupled with the astronomical double-digit inflation. This has significantly affected the cost of doing business, specifically, the cost of energy, distribution, spares, maintenance, and materials. Beyond cost, there are also forex (FX) supply challenges generating some constraints for many businesses to invest in the required capital expenditure (capex). Amid all these challenges, our medium to long-term outlook remains positive.

Looking back at last year when the world was ravaged by the Covid-19 pandemic, Lafarge Africa Plc recorded improved results, what were some of the measures put in place to minimise the impact of Covid-19 on your entire operations?

I would say that we are a proactive organisation and as such, we were not caught off-guard when the pandemic happened. We immediately launched our health, cost, and cash initiatives. First, the health of our employees, contractors, our host communities, and other stakeholders was of utmost priority and we never comprised ensuring a safe and healthy working and operating environment for all our stakeholders. We minimised the impact of the disruption that came with the pandemic. We augmented our route to market to ensure our service level commitment to our customers is not eroded.

We effectively managed our supply chain to reduce the stock situation of key materials. From a cost standpoint, we aggressively challenged all discretionary expenses. The team rose to the occasion and worked together, across all functions. We were clear on the challenges ahead and what we needed to do. It was “One Team, One Direction” all the way.

Lafarge did very well in 2019 and 2020 despite the headwinds. How can you explain these performances? Secondly, if you look at your performance in recent times one of the factors that boosted performance was divesting from your loss-making subsidiary. How do you hope to sustain this performance going forward?

What drove our performance last year was the strong market demand and the ability of the team to capture and realise these market opportunities despite the supply challenges we encountered in quarter four as we temporarily shut down one of our production lines in Ewekoro for maintenance which will significantly reduce carbon emission. We delivered double-digit net profit growth, we generated strong cash flow and cash conversion, and we significantly reduced our net debt position. The fundamentals of the business remain strong and we are well-positioned to take advantage of investment opportunities to expand our business in Nigeria.

Looking at 2021, what will be your projection considering all the challenges because inflation is still going up. And what should stakeholders expect in terms of returns?

Considering the Nigerian population, current infrastructure gap, the lingering housing deficits, and the relatively low cement consumption per capita, our growth expectation is positive in the medium-to-long term. We believe very strongly in the Nigerian market, we will continue to execute our health, cost, and cash action plan and make sure that we continue to provide solutions to our customers. The outlook is positive.

Considering your competitors and their expansion drive, how does Lafarge hope to gain more market share?

One of our immediate priorities is to invest in capacity expansion given all of the opportunities in Nigeria I described earlier. We are very committed to expanding our operations in Nigeria.

Since assuming the role of Chief Financial Officer (CFO) at Lafarge Africa Plc, what are those unique initiatives that you have brought on board?

Our ambition is to build a finance organisation of the future that is agile and innovative with strong technical and commercial acumen. We are focused on effectively partnering with various functions and external stakeholders to ensure that the company’s strategy can be realised and ultimately, we create value for our shareholders. We have taken out complexities and simplified our key processes without compromising on control. We have implemented and elevated the exploitation of our ERM system, created management dashboards to improve our decision-making process, application of data to create insights, and proactively identify opportunities and manage risks. We have created a conducive work environment for our various teams and an effective performance management system that ensures that we have a high-performing organization. Our diversity agenda is a work in progress – the diversity that is not only limited to gender but extends to skills set, work experience, among others.

You have spoken a bit about your team, how would you describe your team briefly at Lafarge and what is your philosophy?

I am very proud of my team. My team is self-driven, highly committed and performance-focused. They all understand what is required and consistently deliver business results with excellence. I am very fortunate to have a team that has fully embraced our ethos of ‘One Team One Direction’. My philosophy is “We build together, we win together and we celebrate together.’

If you look at the operating environment right now, talking about artificial intelligence(AI) and the internet of things (IoT) taking over, what likely impact do you think this will have on the future of accounting jobs and across all the sectors of the business environment?

The exploitation of technology, specifically AI is here to stay and is a game-changer. It is poised to disrupt not just how we live our personal lives but how we work and the broader business landscape as we know it. It will create a competitive advantage for businesses that embrace it. Many of the in-demand jobs today did not exist years ago. Technology advancement has led to increased prosperity, productivity, and job creation. In the coming years, as changes occur across all businesses, AI will profoundly impact the employment landscape and productivity. We have seen these changes in the last 5 to 10 years and we will see more changes in years to come.

Talking personally now, what informed your career path and who were some of those people that influenced your decision to play in this accounting field?

I have always loved finance from a very young age. Therefore, going into finance was a no-brainer because I have always been known for being analytical and methodical in nature. I always look at things from different dimensions. Finance was a good springboard and launch-pad for my career progression as it provided the platform to better understand performance management. It made my transition to other functions seamless. In my career, I have taken up roles in many functions – sales, procurement, logistics, strategy, and business development. I am not your traditional finance professional.

For a young persons who are looking up to be like you what will be your advice to them?

You must have a strong appetite to gain knowledge beyond your core competency area, have a solution-centric mind-set, don’t compromise on performance, be known for consistently delivering on your commitments, show empathy, and go the extra mile to support others to achieve their goals. When success comes, don’t forget your source.

On a final note, as the CFO of Lafarge Africa what would be your parting words to all stakeholders of Lafarge Africa plc?

Lafarge Africa Plc has come a long way and is in a good place. The fundamentals of the business are healthy including our financials and sustainability drive. We have a great and resilient team and we are well-positioned to serve our customers better and capture growth opportunities in the Nigerian market.