Recently, the management of Lagos-based NN FEMS Industries Limited celebrated its 2oth anniversary, which turned out to be a forum for testimony on the resilience of Nigerian indigenous entrepreneurs in the face of daunting operating environment.
Reminiscing the company’s humble beginning and its giants strides in the Nigerian economy, its Founder and Managing Director, Mr Emmanuel Nwakanma, underscored the need for more government fiscal incentives, and the immediate rehabilitation of the nation’s decadent infrastructures. He argued that given the right operating environment, the Nigerian entrepreneur can conquer the tough world of business and hold his own anywhere in the world.
Nwakanma, in this interview with Daily Sun, tells the story of his company’s strides in the last 20 years, despite the in-flux of foreign products. He assured also that Federal Government’s job creation and poverty alleviation initiatives can achieve more successes if private entrepreneurs in various parts of the country are given the right incentives and infrastructures to expand and improve their businesses.
Excerpts:
About NN FEMS Industries in 20 years
NN FEMS Industries Limited, makers of Apple range of cosmetics, has grown so much in stature and in terms of its contributions to the Nigerian economy, having witnessed remarkable improvements even under the difficult business climate in which it operated in the last 20 years.
We started with just three cosmetic products in a 4-bedroom apartment in Egbeda in Lagos State. But the journey of Apple Cosmetics, which later translated into other range of cosmetics products of our company – the Ozone range and the Mystic Rosé range – began precisely in July 1992, at a time when there was an urgent need to boost local manufacturing, even though the enabling environment then was still difficult. We took up this challenge of backward integration because we believed that with the enormous resources God has endowed us with, we would rule the world some day. And so the first step for us was to support government to conserve foreign exchange by locally producing cosmetics that Nigerians would ordinarily import from overseas and, in the process, provide jobs for the youths who we know are very intelligent and resourceful too.
It is instructive that, notwithstanding the odds we faced at inception, we were to respond to the clarion call on Nigerians to look inwards, so as to be free from the chains of import dependency, especially for goods that can be manufactured locally. It was under such a difficult terrain that Apple Cosmetics was born, and we are happy that we have a sweet story to tell about that project.
One thing we would like young entrepreneurs to know is that the journey was not easy, because some of our earlier experiments, researches and production techniques suffered series of setbacks to the extent that some of the consultants that worked with us then abandoned the project. But we did not give up even with those frustrations, because we believed in the project, the nation and the people too.
It was, perhaps, after we got another consultant, Mr. Ndukwe Ajala who, at that time, was also a manufacturer and a consultant on cosmetics production, that we got the mixture right for the production of the three starting cosmetic products.
But today our factory, which was originally at an obscure location in a remote Lagos neighbourhood, has moved to the Ogba Industrial Estate in Lagos, while our products range has grown to about 21…and still counting.
It is the mercy and grace of God that have taken us this far and we hope to continue to grow from strength to strength in the years ahead.
Our business philosophy from Day 1 has been to keep the integrity of the organisation by ensuring that the quality of our products remains consistent with our vision.
We are however excited that to date, we have not failed on that promise to continue to offer customers the best quality products for their money.
Employment generation
Nigeria is a vast country and given her size it would be difficult for government alone to provide jobs for all the citizens. Remember also that every year, thousand of Nigerian youths graduate from the universities and polytechnics and all these graduates need jobs to also contribute their quota to national development.
But since the government cannot do it alone, it is important that the private sector should come in and assist. It is in the light of this reality that we feel delighted by the vast employment opportunities Nigerian entrepreneurs are creating in the economy in complementing government’s efforts at job creation.
As part of our contributions, NN FEMS has well over 300 employees on its pay roll. This is addition to a network of distributors, suppliers and consumers of our products who are benefiting from our operation in one way or the other.
In this regard, too, we have been able to create a number of indirect employment for Nigerians. Our expectation, however, is that as the company grows in size, there would be need for more hands to be engaged directly and indirectly so that more people will enjoy the benefit of our operation.
Export drive
As of today, we have distribution outlets in Sudan, Ghana, Cameron, Gabon and The Gambia. From these locations, our products will be spreading to other parts of Africa including Burkina Faso, and Cote d’Ivoire.
But beyond that, we are building an aggressive export market intended to lift the business. The overall objective is to compete with the big beauty products manufacturers in the world regardless of the challenges facing indigenous manufacturers at the moment. So we would continue to deploy latest production technology in our processes to ensure that we soar above the storms.
Facing competition
So far, I think that some Nigerian firms have been able to weather the storm, because today our products, especially the hair care range have become household brands across the country particularly for the West Coast.
We evolved direct marketing strategy to secure ultimate customer satisfaction considering that the premium and quality placed on our products have also given us edge over competitors. We believe that these high quality products would continue to dominate the market in the days ahead.
However, we also believe that it is imperative for government to take urgent steps to curb influx of imported products so as to give local manufacturers a competitive edge over imported products. This is because each time we import products from other economies, we are strengthening their industries while weakening ours.
So there is need for government to check smuggling of products that can be manufactured locally so that we can support our local industries and entrepreneurs to grow.
Challenges in manufacturing organizations
Like other manufacturers in the country, we are facing severe power supply challenges which often affect our cost of production. Electricity is a major factor in every industry and once you deal with the challenge, more than half of your cost of production would have been addressed.
Today because, the country is still battling with power supply, indigenous manufacturers are feeling the pain considering that nearly all aspects of your production, storage and packaging require power to execute.
It is a big handicap for indigenous manufacturers because the amount of money spent on diesel and power generators on annual basis could well have been used to expand our productions lines which will add up to the number of jobs we offer to people. Look at even those that use our products, majority of them rely on power generators to serve their customers and in the process it eats deep into their income and affects the price that an average customer pays to get served. All these challenges would be easier if government can resolve the power sector challenge urgently so that we can produce and distribute products that are competitive across the country and beyond.
We are only hoping that the ongoing power sector reform by President Goodluck Jonathan would be successfully completed so that we can put that problem behind us and move ahead. I can also tell you that the competitive edge that some foreign manufacturers have over Nigerian operators today is largely because of the liberal fiscal incentives and infrastructures they enjoy in their countries and not because they are better than us in anyway.
However, beyond the challenge of irregular power supply, which seems to be one of the dominant across all sectors, we are equally concerned about foreign exchange fluctuations because we still import some of the raw materials for our production process.
Nigeria’s tax regime/fiscal policies
While I would say that our tax regime is not as stringent as you find in other economies, especially in developed countries, i make bold to say that Nigeria’s tax system is still lopsided. This is because there is no reason emerging manufacturing industries like ours that should enjoy tax holidays are often bugged by heavy import duties and other discouraging tax measures that tend to threaten our operations.
I can assure you, for instance, that some of the petrochemicals that serve as raw materials could be sourced locally if government will rehabilitate our refineries and petrochemical industries in Nigeria. But we know today that the nation’s four major refineries are in comatose state and as we depend daily on foreign countries for chemicals for our production, we are painfully drained through unfavourable import duties. The resultant negative impact on our development and growth is monumental.
Raw materials sourcing
At present, l can tell you that about 30 percent of our raw materials is sourced locally and this predominantly covers packaging materials.
NN FEMS is sourcing almost all its packaging materials locally because Nigeria has abundant reserves of petrochemicals that are very useful to its business. However, our expectation is to raise the percentage in the next few years because by doing so we hope to conserve more foreign exchange and increase the opportunities for indigenous manufacturers and suppliers of such raw materials.
Any regrets investing in Nigerian economy
l don’t have a single regret being an entrepreneurs in Nigeria. Instead, I am always excited that our little effort in this project is keeping several families happy. For instance, some people have worked in this organization for 18 years and, from the income they are getting, they are able to provide the needs of their families. Where else would we have created that value if not in our own country?
Remember also that everything we are doing is for the purpose of developing Nigeria’s economy and nobody can do this for us if we want to be sincere to ourselves.
I am happy NN FEMS Industries has become a veritable platform for the creation of job opportunities for Nigerians.
If I have the opportunity, I would still invest more and more resources into the country, because I am one of those who believe that out of the opportunities that abound in the country, we must take giant steps to support government to develop the economy so that jobs would be available for our people.
NN FEMS in 20 years from now
We want the company to be a big player in Africa’s cosmetic and research industry. At present, we are covering some countries in Africa, but in the next twenty years we hope to expand our operation and marketing beyond Africa. We hope to become highly automated and have the capacity to serve a larger market than we are doing presently.
I see NN FEMS exploring supersonic technologies in the production of cosmetic products that will not just be Eco-friendly, but be exceedingly useful to mankind. I see our extensive research efforts evolving newer products that will surpass the cosmetic needs of Nigerians. I see NN FEMS as a global brand with products networks spanning the continents of the world.
Our strategy is to re-in force our research capabilities, understand the core needs of our customers, and remain proactive in the evolution of customer friendly cosmetics products.
Expansion and diversification plan
NN FEMS aspires to go into full automation in order to be able to have capacity to meet Africa’s cosmetic needs in the near future.
And as part of our expansion and diversification plan, we intend to explore the body products range extensively to ensure we secured a large chunk of that market.
Our depots and distributive units have increased from about half a dozen to hundreds of locations spanning the 36 states of the federation, including the Federal Capital Territory. We have also extended our products distribution channels to different parts of West Africa, Central and Southern Africa.
As a matter of fact, in a couple of weeks from now for instance, we intend to launch other body care range to boost what we have already. The new products would be designed to meet the personal care needs of a wide range of clients regardless of age and sex such that in a every household you will get people using our products.
That is our special pledge to Nigerians and all our customers wherever they may be. We promise to support them and give them quality products that can be trusted all the time.
Over the years, NN FEMS Industries has thrived on veritable manufacturing standards and principles which seek to give the best quality to consumers, adhering to strict culture of quality control and sourcing our core ingredients and raw materials locally and from leading manufacturers across the globe.
In this place, we always try to harness nature with science by ensuring that our products and manufacturing processes stay eco-friendly in line with ‘Green Nigeria’ and sustainability principles.
As the company progresses, we have been able to upgrade our manufacturing processes by adopting stringent quality control measures to ensure good quality, safe and effective formulations that cater for the ever growing market demands. That was largely because our mission for innovation has consistently inspired us to seek global initiative and expertise, which perhaps was a major reason we are collaborating with some US cosmetics formulation experts to improve the quality of our products. The results of these efforts are unquantifiable because our products remain the leading and dominant brands s in the hair care range in the Nigerian market.
Incorporation
The company was incorporated as a limited liability company under the Nigerian law on July 7, 1992. Since then however, we have not rested on our oars in ensuring that the organisation continues to grow organically and in the range of its products it has.
Motivation for Hair Stylist competition
The motivation we have in organizing competition is first to reward our hair dressers, who are the direct customers for our products, and to educate them on the professional ways the product can be used.
Beyond that too we are also motivated to use the competition to sensitise our customers to patronise indigenous cosmetic products and to open more opportunities for business and employment, and to promote talent in the industry. The event was also used to give a sense of belonging to our customers because ultimately, the event provided a further boost to our business particularly in the fulfilment of our social corporate responsibility.
We believe we owe our customers some obligations for keeping us in business through their patronage.
Other promo initiatives
There are lots of bonanza packages meant for our customers on regular basis and many more are in the offing. We have consistently relayed to our stakeholders through a broad-based media campaign that spans radio, television and bill boards.
Customers are the reason we are in business and that explains why we are committed to meeting their expectations always through incentives, and quality products, training and other strategic information that would assist them enjoy their money’s worth.
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