‘Nigeria’s noodles market is extremely competitive’ – Indomie GM

Girish Sharma is the general manager, Dufil Prima Foods, maker of Indomie brand of noodles. Dufil introduced noodles first in Nigeria 21 years ago and since then the brand has remained top of the mind among consumers with about 55 percent market share despite other later big entrants in to the market segment. Sharma shares the secrets of success of this brand and challenges. Excerpts.

Indomie Noodles brand has been in Nigeria for 21 years and it has remained strong, what are the strategies and secrets of this success

The biggest secret for our success is that Indomie as a brand has always been a consumer-centric product. We have always put consumer ahead of anything we do. This means that we invest heavily in research and development. Our focus is to provide quality to the consumers and this is backed with nutrition. The whole focus of keeping the consumer in mind and satisfied is what has actually worked for us.

Could you reveal some of these products to satisfy the consumer?

Today we have a lot of successful brands beyond Indomie in the Nigerian market. We have vegetable oil called Power Oil and it is doing phenomenally well in the market; there is pasta and Minimie Chin Chin. These products are from Dufil stable. We also have Hypo bleach, it’s one of the group’s products, and we have rugs. Some of these products were established because we wanted backward integration for Indomie. We also have SKUs of Indomie. The most popular flavor of Indomie is Chicken flavor, which is available in different sizes. There are other flavours such as onion chicken flavor and chicken pepper soup which are equally doing well.

How has the Nigerian market responded to your niche pricing to attract consumers?

When we came to Nigeria we were very clear that we were going to provide quality nutrition at affordable price and we have achieved that. We are proud that at N50, a consumer can have a plate of delicious and nutritious Indomie noodles which is a bold statement to make.

Do you think that Indomie being a generic name for noodles is a burden on the brand?

I don’t like all noodles being refered as Indomie; Indomie is a brand but unfortunately most people make the mistake. The noodles market in Nigeria is extremely competitive with about 18 players and there are a couple of entrants that would be launching soon. My concern is that despite being a competitive market, the challenge is that players are not investing in growing the category. If you look at brands, despite the fact that there are many noodles, how many of them are investing on the consumer to grow the category. I think Indomie has been leading the pack. Most players are just looking at how they can put their products out there, which is disappointing. Though some of them are trying to wake up now because they have understood that one brand cannot do it alone. Now, some players are focusing on different regions. There are still lot things all of us can actually do.

Are you also concerned that many operators don’t advertise but leverage others’ advertisement as they think that noodle is noodle

That is really a concern but I know that consumers know what they want. This is why despite playing in a competitive market, we are not losing market share as much as we could have taking in to consideration the number of players in the market.

What is your estimate of the investment value of the 18 noodles players?

Dufil brought noodles to Nigeria before people came to appreciate noodles. Today the noodles industry in Nigeria is well over $1 billion which employs close to 20,000 people directly. Dufil alone employs about 6,000 direct people. When you look at indirect employment, then it is in the region of 100,000 employees.

Where are you in the backward integration efforts?

We are forging ahead with it and we are pro-government initiatives. Dufil is a law abiding company. We pay our taxes and other dues to government. The company has been investing in backward integration for a long time. The first move we made in backward integration is setting up our packaging plant, followed by our seasoning plant, flour mill and oil refinery. We have been making a lot of investment in lines with the government plans.

Today, what is the percentage of local raw materials to your production?

More than 80 percent of our production materials is locally sourced. We don’t have option on the remaining 20 percent. For example, Nigeria does not grow wheat. We are very strong on backward integration.

Could you spell out your commitments to communities where you operate?

We give a lot back to the society. Dufil has partnered with a lot of communities on welfare. The company has also partnered with hospitals on provision of equipment. There is also Indomie Independent award for Nigerian children heroes. Dufil has a lot on CSR. This is beyond what we do as a group. We also have initiative where we provide limps and so far we have provided over 6,000 limps to people.

Where are you on capacity utilization?

Our capacity utilization is about 70 percent.

What is the challenge of growing it to 90 to 100 percent?

As the market grows we are ready. As a rule, once we get to 80 percent capacity utilization, we would invest in increasing our capacity.

Do you export Indomie to which markets?

We export to other African countries, specially W/African. Some of our distributors export to Europe. There is demand for Nigerian Indomie all over the world. We export about 8 percent of our total sales.

To what extent would you say that recession affected your operation?

Economic recession really impacted  most companies in Nigeria. Dufil is not an exception. We were all hit by recession and the challenge for us is to procure enough forex to import whatever raw material that is needed to run our factories. So far, we have been successful in doing that as we cannot afford to compromise on our quality. Recession also took a toll on our sales as sales were not as we projected.  However, it is not as bad as some other companies that were seriously hit. We equally used promotions to hedge.

How would you describe the place of communication in the success story of Indomie?

We depend on communication to market the product. Indomie is successful because it is consumer centric and the only effective ways of getting to the consumer is reach them. We also use various ways to reach the consumers.

Apart from the recent recession, what are the other challenges Dufil faces in its operation?

Security is a big concern for us; security of personnel and goods. As recession entered, people were hungry and this increased theft activity. Biggest concern for us is timely procurement of forex to bring in raw materials so the factories would continue to work. We have good relationship with some of the banks, they understand our challenges and they try to support us as much as they can. Whenever CBN releases forex, they made sure we were able to get some allocations. Though it is not enough, but the little can keep the factory running. Other challenges we can tackle. On electricity, we are innovative as we have installed gas generators instead of diesel. We are equally exploring how we can work with coal. We would be bringing new technology in to the country to power our factories with coal generators.

What are our expansion plans?

Now there is little to expand in terms of backward integration as Indomie as a brand is concerned. However, we would continue to geographically expand our factories. We currently have three factories.  We have one in Ota, Ogun State. The other two are in Port Harcourt and another in Kaduna.

Where can government play a role to assist the sector?

One area we need serious government intervention is ensuring that education is improved because finding skill employees for our factories is always a concern. What we do is bring expatriates to train our people here. It would be to the success of the country and its growth to invest in the youth to ensure they are trained so that they can add value to the country.

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