Chief Eric Umeofia, President, Erisco Foods Limited |
Chief Eric Umeofia is the Founder and President of Erisco Foods Limited that manufactures tomatoes locally. In this interview, he speaks on his company’s success in tomato processing, the need to encourage local industries and exportation, among other things. Sit back and enjoy it.
You
seem to support import prohibition as a way of rescuing local industrial firms.
What informed your position?
A former finance minister,
during a live interview, was then asked if the country should ban some of these
good we can produce here, he said no, describing ban as old fashioned. We
should encourage manufacturers by giving some incentives through CBN for the
economy to grow, insisting that banning is old fashioned. How can you control
investors who are ready to use their products to kill Nigeria with substandard
goods? In their countries, where they are using six drums for production, they
are using one and a half drums without separation in Nigeria.
Through such acts, they can
never stop it because of its huge profit. Nigerians prefer cheaper products.
Recently, someone told me they went to the market to ask for Nigerian tomato
and the response they got was that Nigeria’s tomato is more expensive. So, with
that type of mentality, the minister is telling us we cannot ban. While the
economy was failing, they were in service and we cannot repair it till now. So,
what makes that idea good? I want to say that minister is old model.
What we need to do for the
products that we can produce better, is to push sub-standard goods out of the
system so that Nigeria would be better. The other day, the former deputy
governor of the Central Bank, Tunde Lemo,
said every country devalues 25 per cent of their currency every year and that
Nigeria must devalue. Yet, when he was the deputy governor, he didn’t encourage
devaluation. My question is, if we devalue, would we get more money in our
federation purse? This would keep on destroying our economy.
Exchange rate was 60kobo to
a dollar when I was young, now it is N197 at the official market. I don’t need
to go to Harvard University to know
that what they have done in the past has failed. Now this governor says he
wants to try the other way around and they would not encourage it. An example
is the case of Dubai, where for the past 15 to 20 years, they have not devalued
their currency. Most of the Middle East countries do not devalue and yet their
currencies are very strong. What is the essence of devaluation? Our problem is
to diversify the economy in the right way and that is what Central Bank is
trying to do now.
For example, in Sokoto,
600,000 metric tonnes of onions out of one million metric tonnes they produce
every year get spoilt. This is due to lack of preservation. The simple solution
is controlled humidity and they would be in money. So why should we allow these
farmers suffer. Also you can get onion juice, power, and dried onion, all of
which are in high demand in Europe and America.
The
manufacturing sector seems to be bedeviled by a lot of challenges. What is your
assessment of the sector’s performance?
I think we need to go
beyond paper certificate if we will improve manufacturing. Here in Nigeria,
someone would claim to be an expert in a field he has never practiced. You
cannot call yourself an expert without practicing.
There are a lot of things
that are happening in this country that keep amazing me and surprising me, and
till now, nobody knows our problems in the manufacturing sector. Why is it not
growing? This is because we are not concerned on how we are going to grow this
economy by ourselves. We leave manufacturing to foreigners who keep exploiting
us and taking our money away. When you watch interviews on the television,
every time they call on an expert, I question what they have achieved to be
called an expert. A professor or a doctorate degree holder who has only learnt
the theory cannot be called an expert without actually practicing. Why can’t
they dabble into their theories? Let them take part of their money to start a
pure water factory and see how successful they will be.
You cannot buy experience
with any form of certificate. Experience is practical. Anywhere in the world,
if you watch the economies that are growing, what they do is they try you based
on what you have practiced and if you are good, they take you. Here, if people
with experience want to go to the television to speak, they tell you to pay.
Then they go and invite a so-called expert and then pay them to talk on what
they have never practiced.
The initial plan from day
one of many foreigners is to protect their interest in the Nigerian economy.
They don’t have plans to develop Nigeria to be self-sufficient. In other words,
they won’t allow any undue competition. But on paper, they say they are
protecting Nigerian manufacturers. Personally, what I have experienced through
many association and bodies has shown me that the place is being run to protect
foreigners.
For instance, our civil servants
are not well trained to discern intentions. So, anyone who comes to show them
documents on theory is readily accommodated. We have a huge economy and if it
is developed, unemployment would not exist. In every aspect, agriculture, food packaging,
construction, among others are key drivers of the economy. Thank God for
President Buhari for doing the right thing.
There
are so many stakeholders in the tomato value chain and regulators, to a large
extent, determine the tide of events. How can government make the environment
attractive for businesses to thrive?
So far, only CBN has showed
interest in supporting this government as far as I am concerned. The ministry
of Trade and Industry, I believe, has been traded away before the minister came
because they have been in support of purely foreign goods. The Ministry of
Health through NAFDAC is also culpable. If not, why would they know there are
harmful products in the market yet not doing anything; there is something more
to it. They would tell you that importers are investors. We are talking about
low foreign exchange and yet, some still continue to support importing into
this country. I commend the CBN because his support has made us think further.
We now have the machinery to produce concentrate from Nigerian tomato. With
this, we may produce at a higher cost but it is more nutritious for Nigeria.
The concentrate we buy usually arrive after 90 to 120 days but with this
milestone on local processing, imagine its impact on the economy.
The Minister of Industry,
Trade and Investment should not encourage importation of goods that we can
produce better in Nigeria. Look at what happened with rice when government
reviewed import quota. The investors imported so much rice into the country
because they are more concerned about doing business not farming. I call on the
minister urgently to make sure this country is repositioned for industrial
growth and he should support indigenous and few genuine foreign investors that
want to help this economy to grow.
The minister should not
allow Nigeria to be traded away under the guise of various trade treaties. I
also call on the Minister of Labour and Productivity to look into more than
three million foreign illegal workers who are still working here while we are
complaining of unemployment. If America, Britain and other countries are
deporting Nigerians, why can’t we tell these to go? We need only people with
technology, engineers and other technical capacities. Most of these foreign
companies bring their citizens to fill all positions including marketing.
What
prompted your value addition drive in tomato processing sub-sector?
The central bank’s policy
encourages us to look inwards to help the nation. I heeded to this call. The
last government encouraged importation but this government now tells us not to
import and to make sure we help Nigeria grow. Although in the past I had
refused to join them to import which is one of my greatest achievements. They
made us think inwards and we then called our indigenous engineers to explain
our plans; they came up with drawings to make this work. Although it is two and
a half times more than if we import. Concentrate in China processes at $1250
per tonne; they then sell to Nigeria at $850 per tonne through subsidy from
their government. So, our government needs to support our industry to ban
importation. You can imagine how that cripples us. With this policy, out of
nine indigenous manufacturers, there are only three left. If not for this
administration’s encouragement we would have shut down our operations.
God has helped us, we just
finished test-running with fresh tomato. We buy from Lagos, Kano, Sokoto
markets to process all because we love this country. We have designed a
machine. When everyone said it was not possible we designed the machine with
our engineers and imported it with air cargo here to install. We didn’t get
foreign exchange from CBN. We do not get special treatment from the Central
bank. I support them because they are doing what is right for Nigeria. I am the
biggest tomato manufacturer so I suffer too.
We are now producing with
fresh tomato. In other words, those lies coming from the importers saying
Nigerian tomato is not enough is false. This year, we would reduce the waste
arising from little or no processing of fresh tomatoes by 30 per cent. We would
use what we have now to meet up what we are doing and before our plant in
Sokoto is completed, we would be saving this nation the shame of importation by
producing and harvesting twice a year from our earlier position.
Recently, the Sokoto state
governor was here and we did promise that we would build another factory there.
Our plans are on track and that factory would be three to four times the size
of our Lagos factory. Our Sokoto factory will relieve farmers in Sokoto as our
plant in the state would be of great impact in reducing wastage of their unsold
commodities.
With the plant being set up
in Sokoto, What are your projections for 2016 and how many metric tonnes are
you targeting?
We are targeting one million metric tonnes by the end of this year. We are on 450,000 metric tonnes now and by the end of this year our target of one million metric tonnes would have been realised. We are projecting a 10 to 20 per cent growth and with that, we would in no time start exporting to neighbouring countries.
We are targeting one million metric tonnes by the end of this year. We are on 450,000 metric tonnes now and by the end of this year our target of one million metric tonnes would have been realised. We are projecting a 10 to 20 per cent growth and with that, we would in no time start exporting to neighbouring countries.
Talking
about the export market, one of the major strategies manufacturers are trying
to use to hedge against forex issues is to have subsidiaries in export markets
that are dollarized and use the earnings from such economies to buffer some of
their forex needs. Are you also toeing that line?
I am toeing that line and
when we start exporting semi-processed onions overseas, our forex earnings will
improve. We are trying to open up our market to where they have high demand and
we want to put a plan that would give us all the standards they require. That
is a good idea which would help the economy grow. The best option is to be
exporting not only importing; that is why we are building a plant to surpass
our domestic need in Nigeria.
Do you
think inaccessibility to forex would increase job losses in the sub-sector?
That claim is laughable.
They are unlucky because of people like me who actively participate in this
sector. Practically, there would be no job loss because most of the vacant
positions are filled by foreigners, while the jobs given to Nigerians are the
menial jobs where they receive peanuts. They are doing illegal jobs and we
should not allow them. I offer to take anyone in the tomato industry whose job
would be affected because we would be hiring more workers. We are going to
employ a minimum of 9000 workers in Sokoto in the next three years.
These people are looking
for sympathy and if they truly have the country’s interest, why are they not
investing in backward integration. I learnt that the foreign imported brands
are more than 100 in the market and everyday more are being smuggled into the
country. They have pleaded with me to join them, I refused.
To
what extent has poor access to forex affected your company’s operations?
The effect is not as big as
not allowing me sell. Until now, new brands of tomato are still coming in to the
country. Most of them are fake and NAFDAC would tell you they are being
smuggled through unknown routes. It is a lie. They are being brought through
official routes and through the ports. The NAFDAC officials have been
compromised and they turn the other way. When the forex policy commenced,
people were afraid. So the scarcity made our tomato move more in the market. We
were then doing 25 per cent of our storage capacity. Now we are doing less than
20 per cent of our storage capacity and we don’t see the market to sell. Yet we
have better quality. Yes, our price is a bit higher because good things come
with good money. They continue to dump substandard products here to kill
Nigerians. The effect of forex is a minor thing to us. With our new machine and
discovery, we don’t need forex except for materials to wash our machines or for
spare parts. After three years, the export quantity we are going to make would
be used to meet up our forex need.
Are you saying that
high-level importation has been assailing local manufacturers’ production
profile?
Yes, that and also the level of corruption in the system.
Yes, that and also the level of corruption in the system.
In
terms of concentrate needs, how is the demand-supply gap being addressed?
We can only cater to our
needs now. But by the time the Sokoto plants come up, we can supply others.
Once the smuggling stops, Dangote and my company can meet the needs of everyone
and once they start producing in Nigeria and employing people, they would have
more money to expand their own factories, including me. Everybody grows
together. But right now we are yet to see the impact of the Ministry of
Industry, Trade and Investments. (Guardian)
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