We have invested over $20m in Nigeria – Pamnani

Jitesh Pamnani is the General Manager of Lucky Fibres Limited. In this interview with Chinwe Agbeze, Pamnani spoke about the new partnership with Gerflor, challenges facing local manufacturers  and what the Federal Government should do to revive the sector. Excerpts:

How has the experience been in Nigeria? The experience has been wonderful. Lucky Fibres was incorporated almost three decades ago and as the year goes by, we keep on  adding different products and designs to keep the market fresh.
What motivated Nobel Carpets to believe in Nigeria with a stand out brand?
We always believe in manufacturing and any country we go to, we want to manufacture locally, and make it competitive for the local market. Also, our consistent delivery of quality makes us stand out. We are an International Standard Organisation (ISO) certified company. Our products are ecofriendly and we believe that we are the best. That’s
the reason we are still standing.
Tell us more about the partnership between Nobel Carpets and Gerflor. We were just into carpets and rugs, but we saw the need to cover the entire floor range. Carpets can be used for residential and commercial purposes, but not everywhere, so we were short of that. To bridge the gap to cover the entire floor, we came up with a partnership with  Gerflor to expand our services in covering sports centres and fields, healthcare facilities, hospitality and food, and even industrial flooring. The brand covers a wide range of
portfolio in terms of flooring solutions.
What keeps Nobel carpet ahead of the competition? 

It’s simply world-class quality. We are competitive in terms of quality. We keep our products fresh, unique and we keep innovating to meet the demands of our teeming consumers. Our products are highly affordable.

With as low as N4, 000 anyone can get a piece of our rug.

Several local manufacturers of carpets and rugs have closed shops over the years due to the influx of cheap rugs from abroad. How has this trend affected your operations? 
We are trying to maximize opportunity by leveraging on the cost. We have been able to keep the cost competitive and at the barest minimum despite the influx of other imported
brands. We try sourcing our raw materials at very reasonable prices so that we can make the end product competitive against imported ones. Also, there are various class and style for people at different income levels.
What advice do you have for the government on how to encourage local production of carpets?
The government of Nigeria has been supportive to local manufacturers but illegal importation or smuggling is still one of the challenges. There are four countries around Nigeria and the borders are on a large scale. So, controlling every kilometer of the border is a serious job but efforts have been put in place. Last year, we had discussions with the Comptroller General of Customs, and he promised he would take care of this. I must say that we are seeing progress and with the Foreign exchange scarcity, it is helping the
local manufacturers to compete in this market.
Your designs cut across every facet of human life, where does the inspiration come from? 
What we say is that, you imagine and we deliver. We have the facility and technology to print whatever the customer wants even if it is their faces or images on the rugs. We are  the only player in sub-Saharan Africa that has this kind of facility to manufacture such. All you need to do is just imagine it and we bring it all to life.
When you demand a certain quantity and quality, we deliver to meet your need. Let’s talk about your CSR. We have a Foundation which provides limbs to the needy. We have this
in place as a group and as a company. We have also done several CSR projects and donations in this community. What other ways can the government encourage local industries? Import duty on raw materials should be reduced so that we can be competitive in the world with our finished products. Secondly, the cost of finance is really  high. If this is worked upon, it can really help in building the  industry. Bank of Industry has been supportive by providing cheap sources of financing at regular intervals.

However, we still need more because what we do requires huge working capital. The amount of investment and stocks we have on ground in our factory is huge.
Thirdly, to make the manufacturing a little bit more affordable, we will like the gas prices to be in tandem with international prices. It is an irony that Nigeria has a large deposit
of gas, yet this is still very expensive. Government needs to reduce the price of gas so local manufacturers can really thrive and not pass down high cost of production to the customers. Anytime you increase the price; the volumes will decline. We have to get to the level where we are consistent in terms of pricing.
How are you coping with imported carpets and rugs? 
Rugs are mostly imported and majority of them come from countries where some of these rugs are rejected and sent to Africa at very cheaper prices. So, we see a lot of rugs  smuggled into the country at a very low price. We are not able to compete with them because their manufacturing cost is low and our cost is high. Though we are still the market leader; controlling about two-third of the market share but smuggling is still a big challenge.
But the Minister for Trade and Investment visited you recently and promised to fight smuggling. Has there been an improvement?
There is no much improvement but they are working on the direction. However, the smuggled goods are still in the market. It’s not just carpets; the entire industry is suffering
from that. How well are you involved in backward integration?
A lot of carpet manufacturers import what they use but we have our own inhouse fibre plant called Yarn BCF. So, we produce own in-house Yarn and we have various processes.  You can say our process is backward integration process because we don’t import fibres. We make fibres here locally.

What investments plans are you looking at five years from now?
In the last ten years, we have invested about $20 million in Nigeria. The market has been sluggish from the start. The 2008 recession really hit us hard and from there we are  battling to get the volumes up. Investment in the future depends on how you play on the investment you have already made. If what we have now is heading in the right  direction, we will definitely do more.
How has the economic downturn affected Nobel carpets and rugs? 

In terms of capacity utilization, we are at about 20 to 25percent which is very low as an industry, but as a business unit, we are trying to come up, and hope that this would get better in the future.

What future do you see for the carpet industry and Nobel Carpet? 
For the carpet industry, it is a challenging period. If associated costs like gas prices and cost of financing are looked into, the industry can rebound. Looking at this current trend, we don’t see much happening but for Nobel Carpets and Floors, we will surely soar high.