Dr. Abdulsalam E. Ogbemudia, is the Chief Executive Officer, Niyya Food and Drinks, manufacturers of the Farm Pride range of natural fruit drinks. A senior management professional with specialisation in Manufacturing Operations and Corporate Governance, Dr. Ogbemudia has been on the top saddle of the company since May 2021, seeing the company through the turbulent period of part of the COVID-19 pandemic. With pride (pun intended), Dr. Ogbemudia speaks about Farm Pride – the present and the future. He spoke to Nkanu Egbe, Editor, Lagos Metropolitan in a Zoom interview.
Niyya Food and Drinks, how did it start? What was the big idea when you started?
Great. Of course, I’m sure you know the Gumel family, the Gumel family – the former General Gumel I’m talking about. Initially, it was a family business. Gumel actually started the company years ago and it started as a farm with a manufacturing arm, and it was actually to provide employment for Nigerians, provide food and drinks that have organic elements for Nigerians, and that actually led to having about 3000 hectares of land for orchard, and then a portion of the land was actually designed for the factory. Well, after some years, Verod Capital Management actually bought into the company and today the company is chiefly driven by Verod Capital Management, who are the owners, but part of the shareholding – minority shareholding by the Gumel family. So today also, the group is still there, we have what we call the Niyya Farm Group, and under the Niyya Farm Group, we have the group itself, which is Niyya Farm Group Limited, you will have the Niyya Farm Limited.
So that Niyya Farm today is also chiefly driven by the Gumel family, although Verod also has a sort of shareholding in that company. So, for us, we are the ones driving the Niyya Food and Drinks Company Limited which is also a member of the Niyya Farm Group. In the industry, is the Niyya Food and Drinks Company Limited that we hear more about.
When you came in, I’m sure with all the acquisition and everything by Verod had been done.
No. When Verod came in, of course, you know the way we are in this country, what they do was actually to bring in more expatriates to run the business. Along the line, they also discovered that there are Nigerians that are even far better than the expatriates (actually I’m not saying the expatriates are not good enough, but there are Nigerians that are better), and that was what also made them now start using Nigerians as CEO. So I’m the third Nigerian CEO of the company.
What is the company’s mission and what is the vision?
Well, the vision of the company is to produce top-quality products that meet the customer needs and also to ensure that these products also have standards and that they also adhere strictly to regulatory requirements.
And the mission is to blend the best of modern technology with local knowledge. Seeing why the Nigerians are coming as CEO in local knowledge by producing top quality products with strict compliance to the best health, safety and environmental standards.
So are you at this time building any five-year plan? Are you working on something like that or you’re taking it one day at a time?
Yes, of course, you need to recognise the fact that the Nigerian business investment environment is very volatile, and there are a lot of changes from time to time because things are very dynamic. That notwithstanding, there is no way you will not have a plan; you have the short-term plan, you have the medium-term and then you have the long-term.
To us, the five-year plan is long-term. And, of course, we also have the short term, which we look at on a quarterly basis and the medium-term like when you look at the annual plan, and we have all these. If you want to know, our long term (which is talking about the five years plan) is actually to remain the leader in our area of business.
I’m sure by now you also know that Niyya Food and Drinks Company Limited is today the largest producer of non-concentrates, non-concentrate (I emphasise), non- concentrate drinks and these are natural drinks from the farm to the bottle.
Okay. So when you talked about non-concentrates, do you export concentrates? Because I know that that’s the other thing that people look for.
No, we can’t export concentrate at this stage. Of course, we know what Nigeria is because if we look at the local production in terms of the capacity of what we produce, they are virtually almost consumed within the country. And you also have to recognise the fact that there are a lot of wastages. Then, you also look at in terms of the logistics in the country today; when manufacturers produce these fresh fruits, you know we are dealing with fresh fruits and before they harvest, even after harvesting before it gets to the market or gets to the processors, some of them would have got damaged and gotten rotten, and because, of course, you know the reason, our storage system is very poor, our logistics and transportation system in terms of growth and then accessibility of these farms are not actually there, and then we don’t have good preservation of our finished products. I’m talking about fresh fruits now and other agricultural products. So this actually impacts what is actually available in the market and to processors like us.
So what are you doing for storage? Are you trying to innovate in that area?
We have state-of-the-art facilities in our factory, and good enough, as I said, we also have our own farm, where we have our orchard, and we also get some of these fresh fruits from our farm. So in that case, all these issues of logistics and storage do not apply, and what we just do; is we get from the farm direct to the factory, and immediately we crush. That is why we say from farm to bottle.
Now when the fresh fruits arrive at the factory – (I’ve just stated now) we get from two sources: one, is getting from our own farm, but of course, the farm cannot meet our requirements because the truth is that as it is today, Nigerians are becoming very very conscious of what they eat and what they drink, they are health conscious, and so people are getting enlightened.
The level of enlightenment in Nigeria today especially when it concerns what they eat and drink, they said if you don’t take your food like your drug, later you’ll take your drug like your food. What we are providing to Nigerians are natural and organic products, and so people are getting aware.
So the farm cannot actually meet our needs and what we do is also to get from other vendors or suppliers, so they also get from other farms, from various states in Nigeria particularly and especially from the northern part of Nigeria, supplied to us. So we get from both our own farm and from outside.
Now you’re talking about what we do to ensure that this in terms of preservation and in terms of handling of the raw materials before they arrive at the factory: that it does not take more than 24 hours. So, we crush them, and once we crush them, we will produce what we call the puree.
This puree is stored in airtight containers – pressurized containers and we put them in our cold room. These are not just small cold rooms, they are massive cold rooms, and these cold rooms can contain up to 15,000 buckets. So they are massive and these cold rooms are run 24/7. They are powered 24/7 and so we maintain the standard of the products and the freshness of the products. Then it is from there that we actually process the products and produce the juice.
I’m looking at how you can compete on the world stage, because, first things first, we can see your products on the supermarket shelves, they are well packaged and when we see Farm Pride, you know it is Niyya Foods, but that is what we have on the facade. Are there innovations in terms of maybe management techniques? What innovations would you say that you personally have added since you assumed office as CEO?
The truth is that I don’t want to start blowing my trumpet, I don’t like to blow my trumpet and I’m happy the board have also recognised the little contribution I’ve actually made to the company. A lot has happened since I joined; is it in terms of product quality, or is it in terms of operations, or is it in terms of profitability? Just name it. So we have done a lot and in terms of the efficiency of the factory also, we have also improved on the efficiency.
And our process today is not how it used to be because I’m somebody that has actually gone through the industry, in terms of manufacturing and I can say that over 96% of my working career has been in the manufacturing sector. And out of these, you can say that, at least in the time I spent in the manufacturing sector, you can also say that over 90% of it has been in the food industry.
So, I’ve not just worked only in the food industry, I’ve worked in a multinational company – a multinational environment and I’ve attained the senior level. So, it’s something that I’ve worked with a company like Promasidor, I’m sure you have seen my profile before.
Yes, definitely.
I worked with people like Promasidor, I worked with GB Food, these are multinational companies. Promasidor has operations in over 40 countries in the world and GB Foods, they have operations in over 80 countries in the world, is a very strong company and Promasidor, I’m sure you know Promasidor, they are the makers of Cowbell milk. And they are also into other food products, same with GB Food. Even in GB Food, I was the highest Nigerian – African in ranking before I left, in terms of my position. So, I’m somebody that is very conversant with the industry and about standards also.
In terms of standards, I’m one of the resource persons that drafted standards for some of the products – food products in Nigeria (I’m talking about ISO standards now) International Standard Organisation of Nigeria. So I’m somebody that is conversant with the industry and I can say that a lot we have done, and a lot of costs we have also saved and in terms of using foreign raw materials. For instance, I can tell you that virtually all our raw materials and packaging materials are sourced locally. We used to source our caps and pet bottles from outside, but today, we source everything from Nigeria locally here, and that’s a lot of savings for the country in terms of foreign exchange. So that is what we are doing.
What about packaging?
Talking about packaging, I just mentioned it; in terms of packaging, you have seen our products. When you see it, is very attractive but in terms of the packaging materials, we are also sourcing them here locally, and we have companies that we get from.
You mentioned something about international trade, which we are also pursuing, is part of our five-year plan and I can tell you that we have companies already from some African countries that are interested in this. In fact, when some of us, let me just say that there’s one of our directors, anytime she wants to travel, she has somebody that normally asks her for only one item, and that is Farm Pride, and she should find a way to bring Farm Pride having tasted it and this is the UK, not even in Africa.
So, we are currently working with some companies in one of the countries in Africa, (I don’t want to name the country now, but I also don’t want to name their agency), they have an agency that is performing the role like NAFDAC and they have already certified our products. Having gone through all their processes of laboratory tests and analysis, our products passed and they are willing to start importing. I think the only area we are trying to work on now is how to handle the logistics. That is the only area we are working on now.
There was something I mentioned earlier which was about concentrates, I guess you have already cleared that, you said you don’t do concentrates, you take straight from the farm. Is that what makes you different from your competition? Because you have different competition. You have Chi products. You have products from Integrated Dairies and so on.
The truth is that we may all be producing juice, but there is something that stands us out, and that is in natural content, and that also has something to do with our integrity, I’m sure you know.
For our products, most of the fruits; is it mango, is it orange, is it guava, just name it, are seasonal products, and that is why in most cases when we are out of season, you’ll see that the products in the market – our products in the market, you’ll start seeing that they are almost out of the market, or only have few of these products maybe because we have some level of puree.
Once mango season is over now, we’ll use the puree that we have to produce mango. It will get to a point that we cannot produce mango again, and when people ask, we tell them that we are off-season. Unless we are on-season, because we maintain the integrity and once we are off-season and there is no puree for us to use, then there’s no way we can produce. But you see that most other brands will have them because they are using concentrates. We don’t use concentrates and for us, as I said before, Nigerians are becoming very conscious of what they eat and drink in terms of wellness, and so they go for our products.
So, it is the natural and organic nature of our products that distinguishes us from other manufacturers, and for us also, we are also selling premium products. Most of those products, you’ll see in the open market under the sun. You hardly see our products in the open market because we also have standards that we follow.
If you want to be a distributor for our products, for instance, we’ll need to investigate – to find out how you want to stock them. Do you have a warehouse? And if you have a warehouse, do you have the warehouse standard enough? Because we ask, what is the temperature of that warehouse? And we’ll come there and provide a thermometer for you free of charge and that thermometer will be there. Every day we are asking for the readings on the thermometer and so it’s not something you can stop.
That is why you find most of our products in the MTs (modern trades) or what we call supermarkets.
Okay, I’m just thinking most companies would try to innovate to be on the shelves all the year round and so that takes me to a question but you know at different farms, (we’re not in Nigeria now but abroad), they invest in biotechnology so that they will have variants of plants that produce crops all the year round…
Under the greenhouse…
Yes, apart from that they introduce greenhouse technology and all of that, so there’s one side of it which is biotech, which a lot of people call genetic modifying, the other one is using the greenhouse method, which means having a weather condition that is not ours. How are you looking at that area in terms of being able to produce all the year round one particular product, let’s say, for instance, mango, you talked about mango season, how is it possible that you’ll be able to (in the future), have a system where you’ll be able to have mangoes all the year round?
Yes, the truth is that we are already discussing with some producers for our medium-term plan, to resolve this issue of not running all the variants throughout the year. I remember having discussions with some companies (I don’t want to name the countries now but outside Nigeria), and that they can provide the puree for us. Then we also looked at some other variables particularly and essentially the issue of exchange rates and we also look at how would they produce to conform to our standard. Because that naturality is we simply guide it and after we also did some level of computation, we discovered that is even cheaper for us here.
To produce in Nigeria? That it’s cheaper for you in Nigeria?
It is cheaper for us. We’ve been looking at importation costs, levies here and there and contract production, so we decided to go outside. For us, the issue of biotech and using a greenhouse is something that it is not easy for you to do in the case of orchards because it is very, very, very expensive in terms of capital outlay. You need to inject a lot of capital and you need to also wait for a significant number of years for you to start enjoying your investment.
But for us as a company, we also prefer where we’re specialising. For Niyya Food and Drinks Company Limited, we are going to have a farm of our own, (I’m not talking about the farm of our sister company now). It’s going to be something that will be long-term because what we prefer to do now is to expand the portfolio of products that we have because a lot of Nigerians are also asking for some other flavours.
We have pineapple, for instance. There are so many other products that we can actually go into. Even recently, there’s a product we were also looking at in terms of drinks, and so for us, I think we would rather concentrate more on the expansion of our facilities so that we can meet the market demand and so that we can also adhere solely to our high-quality standard and for us to also have a focus.
But looking forward, I think what you have suggested is very good, but it requires a lot of investment. Of course, you know what it is today. CBN too in the intervention fund, they gave money but at the end of the day, you will find out that if you don’t pay that money on time, because they normally do it through the conventional banks, then you need to pay the conventional interest rates also. Of course, you don’t need to be told that our interest rate in Nigeria is killing and is scary to the industry.
But then, the CBN has done extremely well, and they have supported the industry. For us as a company also, we have also once worked very closely with them and even of recent, I think they also visited me here and they were also impressed because I remember going with them to our plant and they were very impressed because they saw what we are doing as very, very unique and they saw the huge investment that we have also put into that business and they were very satisfied. And moreover, this is an indigenous company, so they were very happy.
So many other agencies of government are very happy anytime they come here. We work with a lot of agencies, and we are also members of the Manufacturing Association of Nigeria, NECA and many others, is it NACCIMA or KACCIMA here in Kaduna, where we are also a member – very active member. So, in terms of the industry, I think we are very up there.
Okay, the next thing I want to discuss with you is as regards the challenges that the industry faces. Every industry in Nigeria faces power problems, we have talked about storage, we have talked about infrastructure and logistics. We have talked about so many things, but do you want to speak specifically about the biggest or the heaviest of these diseconomies of scale, basically that you’re facing?
You see, you have mentioned even the biggest. The biggest to us is energy and insecurity, but you did not mention insecurity.
We operate in Kaduna. Our factory is located along this Kaduna – Abuja expressway and of course, you know the level of insecurity on that road – the number of people that have been kidnapped. So, we spend a lot of resources on our workers, on our company, even getting escorts for our employees – security escorts whenever they are going to work every day. Of course, you don’t need to be told how heavy the impact is. Because for me, it is safety first. Even when you look at Maslow’s theory, your safety is more important before you now start thinking of food and shelter. Then the next one is energy. Energy cost is killing – is killing for the industry, is killing for us. I mentioned that for our cold room, we run our cold rooms 24/7, and that means that you need electrical energy – electricity for you to run the cold rooms. And incidentally, I can tell you that of the energy that we use, I don’t think the public electricity contributes up to 20%. We don’t get up to 20%, it’s not up to, and I doubt if it’s even up to 15% or 16%. So, it means that they’re probably existing on standbys. So, we have two powerful generators – heavy-duty generators that we use every day, every day. And of course, diesel that we used to buy at less than ₦120 per litre, today is about ₦750 per litre, and that itself, in fact, a lot of companies have shut down simply because of diesel costs.
Unfortunately, we are working in a remote area, so the question of gas is not there because gas is not available. If we have gas now, we’ll be okay, we’ll say we’ll use gas generators because gas is cheaper, but it’s not there.
So these are some of the challenges, but then coming to other challenges now to be specific, is the fact that because of the issue of cool chain and logistics, when some of these fresh foods are harvested before they get to us, the suppliers we have had had a lot of issues on the roads and it will not be in the best of quality form that we anticipate and so it gets to a point that we reject and which is not too good for the business of our vendors. This is not actually their fault, and for us, we do not also compromise when it comes to standards.
And at times, they are asking us to reduce the heat, and we cannot bend that because it has something to do with our quality. Because when you supply, we expect the heat to be so and so, and we expect the quality to be this because, before we use, we must look at the quality of the raw material of the fresh foods that you are supplying, and these are some of the challenges that they also met.
Now the question of costs; when suppliers are bringing raw materials to you whatever the cost is in terms of logistics, in terms of what they encounter on the road, in terms of the farmers, we must bear the cost, so the cost naturally will be transferred to us. The operating costs are very high and like I said, in terms of support from the government, CBN is doing very well (with respect to that, I must be very frank with you), and I commend the CBN for that. The last time that I also had a meeting with them I told them. But the government still needs to do more.
It is not every player in the industry that can access most of these intervention funds. So, the commercial banks also need to contribute and the only way they can contribute to the satisfaction of players (like us) is to reduce their interest rates. So once these issues are addressed, I think the operating environment will still be better. Security is very key, the cost of energy is very, very important, we also need to be encouraged in terms of government support for export.
Take for example we want to export, good enough the Nigerian Export Promotion Council has certified us for us to export but as exporting is not an easy thing to do, you’ll need more support, is not only about certification, but you also need support for you to do that.
So, we were talking about your challenges and then of course, we’re about to go on to the next question; now, if you had the opportunity to technology, (technology is one thing that a lot of manufacturing operations invest in. I know that each year, there are innovations that come up in technology), so I’m thinking that what could be the most amazing acquisition – technological acquisition that you will say Niyya Food and Drinks has made that gives you that advantage over (let me not use competition) but has given you that advantage to be able to meet your market demand? And is there a plan to upscale from there?
Okay, there is one area that we have done extremely well in terms of technology, and that is using research and development (R&D), which will improve the quality of the products and also satisfy our customers and meet their needs.
Let me just give you a clear example; last year, I was (with all sense of humility) honoured by the Federal government through the Federal Ministry of Agriculture by the Honourable Minister of Agriculture and I went to Abuja to receive the award and it was for the agribusiness stakeholders. 100 CEOs were recognized by the government, 100 leading CEOs in agribusiness, I, fortunately, was one of them, and among them- the 100 CEOs, I was also among the very few that got awards for innovation, for innovating manufacturing – food manufacturing in Nigeria, and that was given to me by the Honourable Minister of Agriculture.
Now, that ceremony itself, the drink that was used in that ceremony – the official drink of that ceremony was Farm Pride and, in the process, while we were interacting with ourselves, one expatriate came to me with a bottle of our drink, and he wanted to know the secret behind the drink. Having tasted it, the expatriate wanted to know the secret (behind the drink) and I was with the Honourable Commissioner of Agriculture of Sokoto state because he was also at the ceremony, I was having a chat with him and when the expatriate came to meet me, the commissioner now asked him, do you want him to tell you the secrets? And I said there is no way I’m going to tell you the secret and he told me that this drink is very, very good, that he has not found a drink like this – all-natural like this anywhere, not even his own country.
So, I can say that one area that we have actually worked very hard on is the issue of the quality of our products, and every time we do R&D, (because I always ask the factory team – to task them on R&D) and we’re also using technology in terms of traceability unlike the rule of thumb. We have the technology for traceability of our product because none of our products is like – as I said, it’s not like every other product and we do a lot in enlightening Nigerians on how to handle the products. Because most of our people see every drink as its own and that at times you see the drink having some quality issues because they are not able to handle the drink very well or preserve it very well.
They think it is like (I don’t want to mention any drink I like) some of the regular drink that we have, that you open it, you drink some and put it on top of your dining table and you expect to come and drink it later – maybe the following day. This is like a natural product, once you open it if you cannot finish it, you must put it either in your chiller or your fridge or your cold room. You don’t need to expose it.
Just like you prepare egusi soup and you take part of it and leave the rest on top of your dining and say, I will eat it. I will use it tomorrow. No, you can’t do that, because you will take it when it is still very fresh, and you know the only way you can take it to maintain the freshness is to preserve it in a cold chill.
So, we are doing a lot of enlightenment on that. Then, in our operations we are also using a lot of technology to enhance our operations in terms of efficiency, in terms of getting data because as I always tell my team, data is key to the decision-making process. You will not have a good decision-making process if you don’t have the data. Today we have a department we call the risk management department, so every risk factor is looked at and we instigate against them and ensure that we use technology to solve most of them.
Then in terms of marketing and sales, we also use technology. In fact, as a matter of fact, I had a meeting with another service provider yesterday that we want to also improve on what we’re doing, and that will cost too much. The problem is a continuous thing and it’s the only change that we can say that we need to upgrade all the time. So, our research and development improvement on our technology is very key and it cuts across every department and every facet of our issue.
So you have spoken about how you have gotten awards and then you have been part of the ISO process – the standards process, so when I think about your product and I think about innovation, my mind goes to when you do eventually hit the supermarkets and say the UK or in Johannesburg, South Africa or even in Washington or in New York, when your products are on their shelves because there’ll be a time you will be producing for export.
Yes, very well, we look forward to that.
When you do eventually do that, what would you say (even if it were now), will be your advantage over major global brands?
Hmm, I just told you that I was in a ceremony where an expatriate – not a Nigerian, not even an African, and he mentioned that he has not seen any drink like that, and he wanted to know the secret behind the drink. Now for us, we have to continue improving even because the truth is that we cannot be static. We can never be static. And innovation, is good that you raised it; innovation is something that happen but definitely, we’ll start from Africa and like the MD of one of the companies (that want to do business with us) mentioned, she said, “Nigerians are fortunate to be the first to have this drink”, and she said, (you can check our website, I put that statement there) “Nigeria should just know that other African countries are going to go behind them.” You get the message?
So, for other nations outside Nigeria, we have no choice but to maintain the standard of the products or we’ll continue to improve on it, that is the only way we would do that. That is the reason we have a company from one West African nation, and they are interested in producing our products, they want us to give them the right to and I said no, because if we allowed them, let’s even forget about the issue of recipe, there is no way that they are going to match what we are doing. At the end of the day, the quality of our products and you’ll find out that it’s not meeting up to the standard of what we are producing.
May I also tell you that there is also a body that is internationally recognised, and they have a presence in Nigeria, they have also taken our products to an international lab and they have come back to give us feedback about our product being good for the heart. So from other African nations, they have done the trial and the laboratory analysis, and they have given feedback; even the international organisation with a presence in Nigeria, they have taken our products to an international lab and certified them okay.
So, it’s just for us to maintain what we’re doing and of course, like I always tell my team members; is easy for you to get to the top, maintaining the top is more challenging. Maintain that top, because there are competitors and for us, we just have to remain at the top in terms of natural juice.
Yes. So now all of these things, since you took the reins of office as CEO, all of these things would have demanded some kind of radical measures on your own side. And one of them is possibly on the financial side. Maybe you want to scale down on some of the wastages that you had experienced. Sometimes you want to upscale the investment in certain areas. Sometimes you want to acquire certain technologies. So, there are different financial decisions you are faced with. Is there any specific one that you have taken that is kind of like your biggest financial decision, and would you want to talk about it and why you took that decision?
Well, I will just say that when I came in here, I think the major challenge that I had was the fact that the factory was not operating at optimal capacity. We have two heavy-duty generators, and the two generators were down for months, almost seven or eight months and they had to hire a generator, put in the factory, and they were paying about ₦200,000 every day.
The first thing I had to do was how do I make the two generators (owned by the company) work, and it was very challenging. At a point, I had to take the bull by the horn, and I said some people will have to pay for it. And to be sincere with you, I took (like you said) a very drastic decision and I remember saying I will not pay some people in terms of the management of the plant, no salary except they take away that generator and first of all by initially making the two generators to work. The first thing people told me that is not easy to do, I said, well, I’m going to do it and there’s no going back, within two months I came (or thereabout), the two generators started working, till today, they are still working. And that other generator (hired generator) ceased at once. I just told them when the two generators started working, I said put them under observation first, let’s see that there is stability in the operation for a week and for that week, we are not paying the service provider, notify him to come and take the generator. After about five days, there was stability and the man came, meanwhile they told him seven days – he should come after seven days, he came after five days, and I said they should allow him to take the generator.
And he took the generator and he left…?
…they were still running. So, there are other decisions like I said in terms of looking inward and local sourcing of packaging and raw materials. When I came there are some items they were buying in smaller units and I found that, No, if you’re buying in smaller units, you will not benefit from economies of scale. So, you need to buy in large stock and by so doing you find out that your per unit expenditure will go down, that has also impacted positively in the company performance.
Then another decision was also to look at our costing in terms of recipe; what goes to your BM (Bill of Materials), look at what the recipes are, and what do you do in terms of getting even improving on the quality of the product and yet, using substitutes that are even cheaper and give you better results. So, we did that under R&D and we succeeded. Different samples were brought here, (if you go to my fridge here, you will still see them) almost on fortnightly basis we get the factory product from R&D.
So we have split the R&D which is now sub unit under the quality assurance department and we also changed the quality control, they will need to call it the quality control department and one of the decisions we took was, No, it should not be quality control. If you say quality control department, you are telling those working in that department that their major focus is only on factory online and factory operations and looking at the quality of the product only in the factory.
But the good thing is that for quality assurance, it starts from your vendors – from where the raw material is coming from, the packaging material is coming from, you need to go and check, are they producing this imputes following standard procedures and what are the SOPs (standard operating procedures)? What is the GMP (good manufacturing practices) that they are adopting? Then you will also evaluate the quality of what they are bringing, and when they also arrive at your plant, you need to test- subject the supply to test even though you are taking samples of what they are supplying you. Now online, you also check the products. And the finished goods from the warehouse – this puree, yes, it was very okay as at the time you produced it; now when you want to use it for processing that it will go through your pasteurizers and homogenizers; now you need to also test it that it still conforms to the standard and when the finished goods come out, you need to test it, it will not stop them when you supply supplier, I innovated market visits and the quality – the factory team they go outside, they go to the distributors, they go to the MTs in the supermarket to ensure that this product is stored appropriately and handled appropriately.
So, you can see that the quality assurance department is no longer doing just quality control alone. There have been innovations and it has helped us to reduce costs in terms of the market trade returns and in terms of quality of the products. So these are some of the initiatives that we have and they have actually been good to us.
Okay, so, I’m looking at just trying to meet up with market needs, the quality – one thing about people taking Farm Pride is that it improves the quality of their nutrition, and so ordinarily, if I were thinking and say, I’m not the Economics Planning Commissioner and I’m not the Agriculture Commissioner, but if I was thinking as an administrator in the public sector, I’ll be thinking of how we can have a supply of natural juice on the breakfast table – on the daily breakfast table, I’ll be thinking of how to make sure that the quality of nutrition in most families is improved to the extent that they’re able to afford, a gallon of juice maybe from Niyya Food on their table every day, so market needs may improve, especially as we project that in a few years to come, the quality of life for the average Nigerian will improve.
Let us assume that we have a middle class that is waiting to emerge, are you thinking in terms of meeting the needs of that emerging class, should there be a policy that okay, we want to work with you, we want to make sure that every household is able to afford a gallon of juice every day, now we want you to be able to meet their demands and this is how we’re going to – the government will work with you, they will give you if they want you to meet their demands, of course, if there are issues like cost of production and all of that and they want to make sure that these things are put on the table, they will try to meet you in terms of all of the things that you need, maybe power, maybe security, maybe even cost of inputs and all of that and they may try to help in one way or the other.
Now assuming all these variables, in economics, we say ceteris paribus, assuming all these variables are there, would you be able to meet this demand every day?
Yes. For us, when you say a gallon, we can only say that okay, we have to start from somewhere. Even if it is 500ml, half a litre…I don’t know if you can see this? (shows Farm Pride bottle) Okay, this is half litre bottle. Now you have a one-litre bottle which is twice this size, even if it is just this half litre that every individual – I’m sure you know that Cowbell, let me just give you – Promasidor, you know that Cowbell milk, it was a research that they did that brought that cowbell milk, and, like what we were talking about – the vision but the question you ask is connected to our vision statements, and that vision statement is actually to enhance the quality of life of Nigerians by providing them with top quality products at affordable prices.
Now in the QS, we also step enhance the quality of life of Nigerians, the quality of life. Now, top quality products (that’s the second one), then the last one is affordable prices. When you say enhance the quality of life of Nigerians with a top-quality product, we’re already doing that because the products we are providing, are natural and organic products that can actually enhance the quality of life.
Now providing these products at affordable prices is what we’ll continue to struggle to meet. If they are affordable quite all right, there’s no doubt about that but they are premium products, they are premium and of course, the cost of the price of a product is not determined by just your vision to provide that product at affordable prices, but also determined by the cost of production of that products.
Where the energy cost in Nigeria today is very high, let me tell you that since we enter this year with the energy crisis, we are not increased the price of our product. The reason is not far-fetched, it is simply in line with our vision to actually provide these products at affordable prices. So, for us, it is actually for us to now work on ensuring that we reduce our production costs so that we can continue to provide these products at an affordable cost.
Now, I’m coming to the second leg of your question; if we have that support from the government and say okay, we are giving you grants so that you can expand in your facility so you can produce more, then why not? We will be able to do that, but this of course requires government support and further investment for our expansion. Because the way our plant is today, we have people that come to us and they want to do Contract Packaging, we tell them that even right now, we are struggling to meet market demand, so we cannot sacrifice any other time of our operation for a third party.
That is the current situation, and we cannot see that our product is something that we cannot actually produce to satisfy Nigerians. If you also look at it, even though our product is premium, like I told my neighbour, I said these products are premium products, now consider the same products done by mallam in the market, you see those mallams that carry wheelbarrow and they squeeze the orange in the same size of the bottle, they will sell it to you at not less than ₦600 or ₦700, this product is less than ₦400. And that one they squeeze for you, if you open it in the next24 hours, it will go bad.
With all the pathogens and everything inside it.
I’m telling you because the truth is that you have just said it all. There is nothing done on removing the microbial effects in the orange is contaminated, that is how the consumer, (not you and I please), that is how that person will consume it, that individual, but ours; that fresh fruit goes through a pasteurizer and in an enclosed highly hygienic system – automated and without pasteurizer, what happens is that it is like when you cook – you boil your food, so all the bacteria you have there, they are destroyed.
Now not only that, but our products also go through (what we call) homogenizer. You see these products; you can see that there is no separation. There is a technology that does it. There is a machine that does it and everything is uniform. The other one that they will squeeze for you, if you put it down, you’ll find the settlement.
So, you were acquired by Verod Capital. The next stage in this whole process is expansion, you want to expand and you want to be able to continue to meet market needs, you want to be able to upscale in terms of technological capacity; you want to be able to meet up in terms of reducing your economies of scale, and one of the things that you’d be able to do that is maybe a process – a system process or maybe the technological process and all of that, you want to take all of that into consideration and the only way you can be able to do that is by expanding your investment portfolio which will give you that capacity to be able to acquire and to be able to make that expansion. And so, the next thing you want to consider is okay, should we go public? Should we not go public? Are you considering such a thing? Is that part of your plan? Are you planning to go public?
Hmm, that is a very difficult one.
That’s why I kept it for the last.
Okay, to be honest with you, I’m the first CEO of the company that happens to be a member of the board, I must thank the board for finding me suitable for that honour because it is not easy – I’m the first CEO to be appointed into the board of directors. And at the board level, we have not actually taken a decision to go public, but I can say that our doors are open for other investors if they are interested in agreed terms and conditions. Because the fact remains that like you said, from what we are doing, the space is very wide in terms of expansion, in terms of penetrating the market, we have barely scratched the surface, and that is the truth because if we provide Nigerians with the benefits – the nutritional benefits of these products through our wellness program and the rest, I can assure you that we will not be able to meet the demand. It will be too much for us to actually meet.
So, we are open to investors joining us but going public is not something that we have discussed. Of course, you know what it means to go public and so for us when Verod came in, we did not go public, they just invested and there was a restructuring that we did and that is what has kept us floating and moving and achieving what we are achieving today.
So, we don’t have any problem with investors coming in but going public is I’m not too sure whether the board at this stage will want to go public.
Okay. I’m sure that when they see your performance and it’s going up…
Yes, exactly
And they try to gear up your performance going up and they will definitely consider that.
Yes, I just told you about meeting demands, it is not actually easy. Meanwhile, we are barely scratching the surface and that is it.
I want to thank you so much for sharing your time, like I said to you, we tell stories. We are in the business of telling stories, and it’s our pleasure to tell your story.
