Doing business in Nigeria riskier than fighting Boko Haram – Eric Umeofia, Erisco Foods CEO

                 Eric Umeofia

Talking  to  the Chief Executive Officer of Erisco Foods Limited, Chief Eric Umeofia, you will feel   the pains of

   a   man that has high hopes for the country’s manufacturing sector, but feels dejected   by the activities of   those holding the economy down. His tomato paste plant in Lagos, one of the biggest in Africa, provides jobs for many Nigerians   and he believes   he can create more jobs if the system is clean.  Today, the industry is plagued by importation of substandard but cheap tomato paste from China, so,   Umeofia is left to fight to keep  his local plant afloat  and has become a  strong advocate for the manufacture of goods locally as against  importation. In this interview, Umeofia shares his pains and hopes for the manufacturing sector.

On the manufacturing sector

The sector is not doing well for now because of the bad foundation laid by previous governments.

There is no pretence about it, the manufacturing sector anywhere in the world is given due attention.

Manufacturers are respected anywhere in the world ,except Nigeria because we have not realized the importance of the real sector to grow the economy.

The English people know why they call it the   real sector. In some clime, manufacturers have estates   where they are provided   everything from roads to water, they can even buy  cars on loan. There is no sector of the economy that creates employment more than the manufacturing sector anywhere in the world. Before the advent of this government, some of us manufacturers felt we made the greatest mistakes of our lives by being investors. If not for President Buhari, I would have shut down this business by now or take it   elsewhere.

The previous governments, particularly that of Jonathan, allowed importation, to the detriment of manufacturers. They were interested in making more money than paying attention to quality by allowing substandard goods to come into the country.

For  example, a tomato paste should at least   have 40% real tomato; other ingredients are water and salt. So it means that in each tank you are mixing , you need to use six to eight drums of tomato; it depends on the quantity you are producing.   That will make it to be concentrated, but in  some countries, they use a drum of tomato  and add starch , colour to make it look like real tomatoes.That colour they are adding is dangerous to our health as it blocks  blood vessels. We found out the Chinese tricks, we reported to NAFDAC, but NAFDAC   has not done anything about it.

If not that CBN came to help us with the foreign exchange policy that triggered our sales, we would have gone under. Now, these people have found means of smuggling these products  across our borders. So as manufacturers in this country, even  criminals on the street are more respected than us. Sometimes I ask myself why am I wasting my time manufacturing as those who went into trading are  richer than me all because I chose to help my country. It should not be so. Nigeria is not a manufacturing nation.

Foreigners come here saying they want to invest, but all they are interested in is to exploit the system. If you know the damages they are doing to our economy, you will not believe it. If we have good economic policies, no Nigeria will be out of work as there will be enough for all in the next four years except you are lazy. A situation where a foreigner comes to invest N100 million, after 2-3 years takes out N1 billion out of the economy is unacceptable. That person is wounding the economy the more. There is no country that its economy is driven by foreigners.

But  in our country, government policies  favour foreigners, whatever they say is law. And in  their countries, that is  not  possible. They will jail you, but here because of corruption, they are free. The foreigners bleed our economy, criminalize our people, introduce  corruption to  government agencies, yet nobody is imprisoned. In their countries, Nigerians are imprisoned for flimsy excuses.

Government needs to do something urgently on our  immigration policy to stop  these people.

Britain just did that. The Nigerian government should ensure that any foreigner  that comes here has a good reason   to be here. I have businesses in Angola and UAE, all the nonsense they are doing here, they cannot try it in Angola.

Last year, about 21 of them were sent  packing from Angola with their properties confiscated.

They are making our people slaves in their country. A time will come when the people will revolt.

On the reason for still remaining in manufacturing 

The passion to grow my country’s economy is what is keeping me going . I read a book on how five

people made America what it is today, so I said to myself if people can achieve that in America, I want to be among those that will make Nigeria great. In 1994, my company gave every state government one utility car when we launched Erisco Bonpet, that will show you the type of   love I have for my country. By the grace of God, we are very contented   and that contentment made me to come back home to establish companies despite the successes we are making in Angola and UAE.

But, little did I know that it was a risky venture doing business here in Nigeria. It is riskier than going to fight Boko Haram in Maiduguri to be an indigenous manufacturer here. Because your government agencies work against you as they support foreigners to the detriment of their people.

If I produce with six drums of tomato  and someone in China does so with one drum, how can we compete with them? 

I wrote a  petition to the House of Reps on this and they are working on it . We are creating jobs for their people, I will continue to appeal to Nigerians to avoid foreign foods and other products for the economy to grow. The government agencies did not   listen to us, but now they are seeing why we have been shouting.

My life and business  are  at risk because I am saying what I am seeing. I know reports have been submitted to NAFDAC on the activities of these people, but they will not do the  right thing. Indian government recently confiscated $50 million worth of goods belonging to  a multi-national  and other charges filed  in  court against it. For infractions. Here, in Nigeria who will do it?

NAFDAC boss will not do it, because he says all is well, but we know it is not.

How  do you relate this to some of our governors going abroad  to look for investors?

About three years ago in Ogun State, I bought land wanting to expand my factory, I paid everything payable to government after buying land from some people, just to get C of O, but two and a half years after,  no C of O. I wrote petitions and yet they say they want investors. How can investors come when you can’t issue ordinary C of O?   What is good about industrialization in this country? There is  frustration  left and right . If not that I have courage, I would have been frustrated out of this country.

On      policies   that   can assist manufacturers

The CBN governor is doing well now.  I have come to realise that not that they don’t know what is good, it is because the person at the helm  of affairs was not interested then. By the action of the CBN governor now, you will realize that he was interested   in performing but didn’t get the support and so he is performing now.   I can tell you now that they are listening to advise and by the time they follow the advice step by step, you will see how the government will be praised by those making noise. I want to draw your attention to this again, before now they will create  an intervention fund but after six weeks, the whole fund is in India or Lebanon as these people manipulate documents to take the money out of the system. They frustrate Nigerians.

On access to bank facilities

Our  commercial banks are opportunistic, they don’t have conscience. They will tell you their board wants them to make profits, but must they kill to make profit?They steal people’s money through agreement, but when you discover they will tell you it was a mistake. It will take them over 90 days to correct the mistake, but if you owe them a dime, they will put all kind of pressure on you to recover their money. The commercial banks are killing the economy because of their selfish interest, none of them is interested in supporting industries. I wanted to build a tomato concentrate  plant in Kano in 2009, but a big bank in this country advised me to import instead of investing in the country. They are not interested in committing to development all they are after is buying and selling.

On his company’s backward integration plan

We have 460 hectares of tomato plantation in Jigawa, we are about having same hectares in

Sokoto  now. In this business   it has been our target to have tomato grown everywhere, though the money is not there. When you want to do backward integration of tomato in this country, you need a minimum of

one line to process tomato into concentrate; and it costs $30 to $50 million to do one line. In China, 95 per cent of the factories are owned by government. The same machine that will work 60-90 days a year, will

work just 35 days in China. So, getting the money isn’t easy. We grow tomato twice a year here in Nigeria. In China, they grow just once a year, the same China that produce once in a year we are importing from them. That shows we don’t know what we are doing. This is why I made up my mind to produce   tomato here. When we started producing tomato in can here they said it was not possible, but today we are doing it. Some people are still deceiving Nigerians that it is still not possible all in a bid to continue importing .So with our backward integration on course, I pray God gives us the power to produce everything about tomato here from planting to packing very soon. We are going into tractor project now as you cannot do agriculture without tractorization.

This is my area, agriculture spare and machinery. So, I am doing everything possible for Nigeria to be rich in agriculture machineries as this is where the world is going now.

There is none in the country that is  functioning   now, we are the only one, so we plan with our  backward integration to support export from this country.

I want to impact my society and this informed my building churches and mosques, I don’t want people to use religion to deceive the people all in the name of tithe. I am a Christian, but I don’t support  this idea of tithe. I give what I have to people who need them.  I will rather pay my staff  well than give tithe  to pastor and and also those that come my way.

On  his company’s  market share in the tomato business

If the CBN   gives us N100 billion loan and the market is not here, I will not be able to  pay back, even without interest . We have a plant for  about 450,000 metric tons of tomato paste in a year. As a   matter of fact, myself and Dantata can meet the demand needs of Nigeria and export more, but there is no market. Now in the factory, we manage to operate one line. Everywhere is filled up with products, so I have the capacity to produce, but the  substandard products from China have taken over the market. Smuggled products have taken a  large chunk of our market share .But, I have the confidence that with this new government things will turn around. I  tell Chinese when they come  that if you want to do business here bring the plants to Nigeria.

If you give me anything to import for N20 billion and make profit  of N18 billion, I will tell you no, let us produce here. That is why I am going back to Sokoto in the first quarter of next year to start production of 20-30, 000   tractors per year.

The government of Sokoto is  willing to assist us and we are also doing tomato there.