Jacob Wood, a Chinese entrepreneur in Nigeria, will be a member of the Nigerian delegation to the Forum on China-Africa Cooperation Summit and the Third Ministerial Conference to be held in early November in Beijing, where he looks forward to a chance to bring Chinese and African businesses together.

“I have been working in Nigeria for more than 30 years and I think the country, with a population of 150 million, has a comparatively big market. Nigeria also welcomes Chinese businesspeople to invest here,” said Wood in an interview with ChinAfrica.

Wood, Chairman of the Board of Nigeria Golden Gate Group of Companies, first went to Nigeria in the 1970s to work in his father’s textile factory . Nigeria is one of Africa’s major cotton producers. Owing to the fierce competition in the textile industry, he chose to go to Canada to study hotel management, and worked in the Shangri-La Hotel after he returned to Nigeria.

In the mid-1990s, Western countries launched economic sanctions against Nigeria on the excuse of its human rights violations, which pulled the Nigerian economy into a downward spiral and forced many foreign-funded companies to pack up and leave. However, quick to see an opportunity, the forward looking Wood took the plunge and invested $8 million to establish the Golden Gate Paradise in Lagos, former capital of Nigeria. Wood’s entrepreneurial spirit soon saw his business expand rapidly. He branched into other fields such as tourism, construction, interior decoration, building materials and wood processing. Currently, his group has more than a dozen ventures in Nigeria, with $100 million in total assets.

“China and Nigeria have a long-lasting and long-tested friendship, which we can feel in our daily life,” said Wood, adding that the bilateral economic ties are becoming closer.

Sources from the Chinese Customs report that the volume of trade between China and Nigeria in 2005 totaled $2.83 billion, up 29.7 percent year on year. Nigeria has become China’s second largest trading partner in Africa. Meanwhile, direct Chinese investment in Nigeria had reached $34.58 million by June this year, mainly in such sectors as steel, household electrical appliances, electric machinery, offshore fishery and woodworking.

China is currently working in cooperation with Nigeria to launch in 2007 NIGCOMSAT 1, the first communication satellite of Nigeria and Africa.

Making the connection

According to Wood, the previous generation of Chinese entrepreneurs who came to Nigeria in the 1950s have already integrated into local society, owning more than 70 percent of the Nigerian economy.

“We hope to establish a platform for Chinese enterprises to launch business in Nigeria,” Wood told ChinAfrica.

Wood was designated as an advisor to the Nigerian president in July 2004. “President Olusegun Obasanjo gave me the important task of introducing Chinese investment and he welcomes more Chinese to invest in Nigeria because of the example set by the previous generation of Chinese entrepreneurs,” said Wood.

He also helped the China Civil Engineering Construction Corp. contract the project of revamping the 3,000-km railway in Nigeria. It is China’s largest construction project in Africa, worth $560 million.

“I focus my business in Nigeria and I hope to introduce more Chinese to the rising market,” said Wood. In August, Wood came back to China to negotiate an investment with the Jiangsu Shinco Electronics Group Co. Ltd. and the Jiangsu Skyrun International Group to jointly establish an air conditioner assembly factory in Nigeria. The two Jiangsu-based companies are the leading household electrical appliance producers in the province.

Wood also plans to set up a TV set assembly factory in Nigeria which, he said, has no such production factory at present. He has chosen the Sichuan-based Changhong Electron Group Corp. and the SVA Electron Co. Ltd. as his potential partners.

“Our strategy in introducing Chinese investment to Nigeria is to establish new enterprises or factories in the country.” Wood, using his contacts and resources in Nigeria, undertakes the construction of infrastructure facilities and factory buildings and deals with local policies and regulations, while his cooperative partners are mainly responsible for technology, equipment and production. With this method, his group has successfully established many joint ventures, such as the Golden Swan Nigeria Ltd. with the Jiangsu Jintan Construction and Erection and Engineering Co., the Golden Eagle Machinery Corp. with the Jiangsu Golden Monkey Machinery-Electric Co. Ltd., and the Golden Forest Shopping Mall with China’s Wenzhou business circle. His target is to complete the air conditioner and TV set factories within the coming six months.

Mutually beneficial

Wood sees mutual benefit as the key to success. “Chinese companies can extend their business into Africa, which may help reduce Nigeria’s unemployment rate,” said Wood. He added that there are more than 20,000 Nigerians working in his group.

Wood recently built a seven-story hotel in Abuja, the country’s new capital, with 98 percent of the staff being Nigerian.

“We prefer to hire local people because they know the local market better. We plan to see that all of our deputy general managers are Nigerian in the coming 10 years,” he said, adding that many of his Nigerian employees are well educated.

In 1999, when Nigerian President Olusegun Obasanjo assumed office, the country’s education system was in urgent need of improvement. Wood funded the construction of four schools in Lagos. He plans to eventually build 25 schools in Nigeria. In recognition of his humanitarian work, he was conferred the title of the Baba Ase of Lagos in 2001.

Few bad apples spoiling the barrel

Wood puts the success of the old generation of Chinese entrepreneurs down to long-term planning and operating honestly. In this regard, he said that some short-sighted Chinese enterprises have damaged the image of the whole Chinese business community and affected business negatively.

With the rapid development of China’s economy, some Chinese enterprises have brought high-quality products and services to Africa, but some others have been engaged in such ill practices as smuggling, price wars, illegal migration and tax evasion, said Wood.

Last year, one of China’s biggest commercial ventures in Nigeria, Dragon City, consisting of more than 200 Chinese firms, was closed down by the local government because of the bad business performance of some of its enterprises, which led to direct economic losses of more than 100 million yuan. Though it reopened early this year, the incident has left a very bad impression of Chinese business practice.

Wood singled out underpricing as one of the biggest problems hammering China’s reputation. Because of China’s export subsidy policy, some companies export their products at such a low price that they cannot make a profit, said Wood. “All they earn is China’s export subsidy.”

To illustrate his point, he said 15 years ago there was only one Chinese motorcycle company, Jincheng Corp., in Africa. This year, the number of Chinese motorcycle companies in the continent exceeds 30. In 2004, China exported 150,000 motorcycles to Africa with a sales revenue of $100 million. In 2005, China sold 300,000 motorcycles to Africa, but, the revenue remained the same. “This means 150,000 motorcycles had no value. This type of price competition not only harms African economies, but also adversely affects China’s economic development,” said Wood.

He called on the Chinese Government to take measures to prevent companies with poor business practices from going abroad, in order to maintain the good relationship between China and Africa. “As an overseas member of the Chinese People’s Political Consultative Conference, I will do my best to promote the sound development of this relationship,” he said.