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Local industries need protection – Obidigbo

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Chief Chike Obidigbo, popularly known as Osisioma ndi Igbo, an industrialist, politician and a youth coach is also the Chairman of Hardis and Dromedas Limited. In this interview with IJEOMA EKWOWUSI and ECHEZONACHUKWU JONEKAY EMEJULU, he discusses the business of manufacturing in Nigeria among others issues: Excerpts:

 

MAY we have a peep into what you are known for?

We have a large number of products; we operate mainly in the health, hygiene and household products which are called the daily used products. We produce soaps, disinfectant, germicides, fumigation compounds, bleach and also produce all kinds of detergents.

We do know that the country has its constraint of raw materials acquisition and a lot of other logistics that make running an industry a little bit difficult. How are you coping with all the exigencies?

Well, manufacturing is not supposed to be a difficult area ordinarily and naturally. Manufacturing is the key; the most important sector in any economy because of the value addition-it takes something, adds value and then brings out something else at the end of the tunnel. So it is the process; the in-between from the starting point to the end point that creates jobs. That is why government takes manufacturing very, very serious and in our clime here, we are still very lucky because we are operating in a totally untapped environment; unharnessed, totally virgin economy where manufacturing should play a lot of roles and it is very unfortunate that our leadership has no knowledge of these things I am talking about because if they have the knowledge, they would have given a lot of lasting solution to the problem. This is not something you can throw at them and they will understand. No, they will not understand until somebody who is knowledgeable in the manufacturing business comes to the helm of affairs.

We know that importation (raw material base) is a big problem to manufacturers in this country. What is your take on this?

Importation is not supposed to be a big problem because nobody is stopping you from exporting your own to other countries. It is only a problem because we are not prepared for it. You see, importation is a kind of competition; it makes you better prepared, better equipped to compete because ultimately, the market is outside this country. The only big problem is that we are not serious in this country. For instance, in our own case, 85% of our raw materials are imported into Nigeria. Then, it is not as if we cannot produce them here but we do not have the zeal to do that. It is only the government that can assist the industrialists to do that because first of all, they are heavily capital intensive.

A typical indigenous raw material manufacturer cannot do anything about it. It is easier for you to pick up the raw materials, put them together and then, you have your products in the market but for somebody to start investing in that area is a massive investment which only the government can assist. The multinational companies investing in the country are not interested in that area at all. They would rather buy such materials from their home country, bring them here and then process into finished goods.

The importation of finished goods like the ones you make use of here seem to be in competition with the locally made ones. How do you see that?

Local industries are normally protected against stiff competition coming from outside. The term is called protectionism. The local industries are protected because other countries are coming into Nigeria and secondly, in this part of the world, competition is very high. There are so many reasons for this. First on the list is that raw materials, as I earlier mentioned, are imported hence costly. Next is that manufacturing under normal circumstances is supposed to be a 24 hour operation in order for you to maximise your profit. It means that a lot of facilities are on ground. For instance, power- you must have 24 hours of power. Not just any power but power that is of good quality, reliable and the power that is constantly available; power that is affordable. Let us take for example, the business routine in our country where we waste the whole night- as soon as it is 6:00 pm, businesses are shut down while the entire country goes to sleep until the following day. Look at the manpower wasted stupidly. In fact, it is wasted

in the most stupid manner.

Don’t you think that the challenge is not enough? For instance if the demand for your goods are stretching, do you think anybody is hindering you from doing a 24-hour production?

Not really. There are constraints that will prevent that from happening. I earlier mentioned power as one business constraint. There is no stable electricity in our country. Generating your own power affects the cost of doing business. Cost of production is extremely very high in Nigeria. We are running our plant today at the current price of diesel which is almost N270 per litre. At the end of the day; we still compete with products that are produced in an environment where the cost of production is regulated.

Again, another terrible thing that is happening in this country is that our banks are not useful at all. In China, for instance, their Bank of Industry (BOI) offers an interest rate of about 1.5% per annum for industries. Here, you are running an industry and then, the bank wants you to pay an interest rate of 32%. How do you compete? You see, there are things which the governments are supposed to do and are not doing so. I would proffer that the government should ensure that the interests that banks pay on their own with the money that are given to them like deposits and savings must be pegged at a specific amount. If the banks first of all, do not pay anything more than 2% on deposits and savings, then, many people will not accept to deposit their money in the banks. They will want to invest it.

More so, if the deposits are kept in the banks, then, they can now say at ½ %, 2%, we can loan them out say at 7 ½ % instead of 32% which is killing. The fact that our bankers do not have knowledge about the industry at all is demoralizing. The banks can give you loan, but they never bother about sending somebody to know how the business is faring. They have no interest at all. As far as they are concerned, they are trading in money. There is no investment banking knowledge whatsoever. Yet, they are always talking about time durations which is not good for the industry but for buying and selling. Again, they are more concerned about the traders instead of the manufacturers as they regard the latter as a high risk area. Also, the government is not doing anything to patronize and encourage the indigenous manufacturers; they are doing absolutely nothing. Yet, they will announce in the media that they just released a huge amount of money for local manufacturers. It is a big lie. We are manufacturers-we have our association; we do have our friends within the industry and we make phone calls to other manufacturers to know if they have gotten anything from the so-called ‘released money’. So if none of us had collected anything, then who did the government give the money to?

us had collected anything, then who did the government give the money to?

manufacturers. It is a big lie. We are manufacturers-we have our association; we do have our friends within the industry and we make phone calls to other manufacturers to know if they have gotten anything from the so-called ‘released money’. So if none of us had collected anything, then who did the government give the money to?

More so to access loan here, even from the Bank of Industry is not a child’s play. When they give you this loan, they think they are doing you a favour by giving you the money. By the time you are done with all the rigmaroles culminating from the process, you discover that the cost of that fund is very high, even though they say it is at 9% interest but it ends up being more than that. So, there are too many problems confronting us.

We are also saddled by workers attitude to work. Young people do not want to work again. What they want is money, money and money. They are not patient enough these days to learn something about what they are doing. For instance, if the machine goes faulty, it is either the machine is abandoned or the call for a foreigner to come and fix it is placed because they lack the technical skill. And you cannot cope with a manual intensive production because you cannot be able to meet up with the demands of your products.

How do you cope with marketing your products?

Marketing is not difficult here because Nigeria is a very, very large market. So, as long as you are introducing value; something that people see and they know that it will add value to their needs, like is it a good quality? Is the price good? Is it competitive? Generally, the market has been appreciable so far. When we were at Enugu, which was where I started the industry, there were some of our products that we were not producing enough because as it is dropping, they are being moved away. In all, products should be consistently available in the market to allow for product trust in your customers.

How do you control imitation of your products in the market?

In-house, we have our own quality control just to ensure we are giving out standard products. We have encountered imitation of our products quite a number of times but imitation can never be the same as the original.  Moreover, the traders are aware of the fake ones in the market which often times fizzle out naturally because the traders are the ones that will pursue it out of circulation. So, it is always easier for them to imitate the foreign products than the local ones since they would want to imitate products that are doing well in the markets. Whereby it is the local products that are doing well in the market, there must have been a connection with traders. Then, when the fake ones come in, they block the circulation.

Again fighting imitation is a very dangerous and difficult thing because sometimes, the operators are very organised and daring. You just pray that these people do not remember your products.

How long have you been in business?

We have been around for more than 30 years but not here, in Enugu. When we started, we were not too much in a hurry. We took our time to develop our products and then, I had the knowledge of production. So, I know the things that need to be done here and there, like how we can bring our products into the markets; the acceptance of our products in the markets and how to satisfy our customers. Likely measures you certainly have to put in place include foremost, you go for a product that the market needs; drop value at their doorsteps, ensure that the quality is consistent and the price is comparative. Also, do ensure that you develop sufficient and reasonable good marketing strategies.

Can we know some of your products in the market?

We began with a product called Isol germicide, Isol soap, then from there, others came up like our Royallux cleanser astringent. I think that up till date, we are the only company producing astringent in the country. Now, we have in our production line products like bleach, detergent, various kinds of bathing soaps, hotel soaps, glycerin oil, metylated spirit. In all, we have a very large number of products and our products are very good.

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