Local raw materials are cost-effective, better than imported ones’

Aighobahi Felix, sales director, Euro Global Foods and Distilleries Limited, one of leading producers of Fast- Moving Consumer Goods (FMCGs) in the country, located in Sango-Ota, Ogun State, in this interview with Razaq Ayinla, talks about efforts the firm is making to ensure it achieves 100 percent local input content. Excerpt: 

Different people, especially investors, are complaining about the business environment in the country.  How do you assess the business environment in Nigeria? 

The business environment in Nigeria is still okay, the atmosphere is very good, if not for financial issues with us. For Euro Global, we have come out with varieties of products, because we know our consumers’ needs. We started from non-alcoholic drinks, alcoholic drinks, and we are even planning of bringing more fruit drinks into the system. We found out that we are one of the companies who go through all age brackets: religion, age and sex are not barriers to us, because we have what goes all through. We have wine; we have hotels drinks; we have bitters’ we even have soft drinks and so on. So, the economy is good and not bad.

Having evolved different brands for different consumers, how do you help your distributors to create awareness about your products and drive sales in the Nigerian market? 

This year, we have given all our customers targets to go for. We are giving bumper gift items and cash rewards to our distributors, and to enhance that, we are coming out with more brands, to make sure that they make more profits too, and to be able to cover the market more. But, at the same time, we are going on promotional activities. As I am talking now, we have kicked off different road shows in Ibadan. We are also kicking off market survey, and market activation. These are done to ease the trade for our distributors, to make things easier for them, we are dancing round the streets for 12 days in Ibadan alone. We are going to have it like that in every Nigerian city, to create more awareness and product visibility to the consumers.

How are the expansion and introduction of new brands affecting job creation and employment drive in Euro Global Foods and Distilleries?

I believe the correct data are with the Human Resource Department, but I will tell you that we have created 20 – 25 percent more jobs in recent times. As new brands are coming in, we have more people to the plants, to produce most of these brands. At the same time, we are employing sales and marketing staff, and we are also expanding distributorship. Immediately we started producing non-alcohols, they would start selling our products, and with that, we have created more grounds for distributors to sell our products. So, both direct and indirect employment is around 25 percent.

Going by what you produce, which are majorly foods and beverages, what have you done in terms of sourcing raw materials locally, as part of measures to key into government’s policy on local content? 

There are products now that we developed with local sorghum. Very soon now, it will be out. We make sure that we source some of the raw materials from the farm. We are fabricating the machinery locally, and we are building ethanol plant and we want to make sure we use either sugarcane or other seeds to make ethanol instead of importing. So, we are on it, it is a project that we must complete this year. Right now, we are using 85 percent local content as against 15 percent imported raw materials. We moved from 50, 60, 70 and now 85 percent, and these well-processed items are even better than what we import.

If you are sourcing raw materials locally and through farmers, how far have you empowered and reached out to them in terms of human capital development, credit facilities and other benefits? 

 It is a plan we are going to develop. We are already talking with the government, so that we will be able to reach some of the farmers through cooperatives and other platforms. We are already discussing with most societies that have affiliates with farmers. We are discussing with them on the production of sugarcane and other variants that we use in our plants.

Don’t you think it is necessary for Euro Global Foods and Distilleries to have your own farms that will grow almost all the raw materials used in your plants, to further reduce capital flights and create more employments locally?

Having farms? We don’t do propaganda. Some people have small farms and tell you they farm all their products. Presently, we prefer to buy from farmers to allow money flow in circulation and create more job opportunities for the people. When it comes to actual farming, we will let everybody know, but presently, we buy from farmers.

What is your current production capacity per annum? Secondly, do you think Euro Global Foods and Distilleries has the capacity to supply Nigerian market and even export?

We are not alone in the market, but in our own segment, I can tell you that we are only operating 30 percent of our installed capacity. We really still have space to grow with 70 percent, so as to take care of our local market and exports. That is why we are developing our brands in international standards. We are not doing brands for our local market alone because it costs us a lot of more money, but we prefer it that way. Our products here match international standards,  and we are improving more and more every day. We are lucky; the capacity is there; labour and machinery are also on ground. The only challenge is sourcing for fund. Fund in Nigeria is challenging, the most difficult part of it is sourcing for foreign exchange. It is a serious barrier, but we are coping with it.

Considering all these identified challenges in the Nigerian manufacturing sector of economy, what do you think government could do on ease of doing business in the country?

There are three major areas now. Cost of energy is too high. We are running on generators for 24 hours and 7 days. Secondly, foreign exchange is a serious problem. Even if we have allocation, it cannot take us for one week, meaning that we have to scramble to look for it at a very high rate. The third is logistics. The roads are so bad, if you are taking goods from here to the North, even within the state, roads are really bad. These are the things we want government to do.