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

on January 03, 2016 / in Business, News 8:57 am

By Jimoh Babatunde

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.
Eric Umeofia

Eric Umeofia

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.

http://www.vanguardngr.com/2016/01/doing-business-in-nigeria-riskier-than-fighting-boko-haram-eric-umeofia-erisco-foods-ceo/

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.

Ironically, it's his SE brothers who are the major culprit with respect to the importation of the substandard tomato paste into the market.

YoruBanger:


Ironically, it's his SE brothers who are the major culprit with respect to the importation of the substandard tomato paste into the market.

And your SW and Northern brothers are the customs officers who collect bribes to let them import every thing on earth into Nigeria. Shame on the customs and exercise authorities. It takes two to tango, remember?

Even if he has the farms in Sokoto and Jigawa because there is cheap land in those places, he should have built the factory in the East. There is no land in Lagos and he does not own his tomato farm in Lagos, yet he has his factory there. What a useless set of anti-Igbo people.

So gej killed this iboman's business, what kind o ibo hero is that?

IyaIode:
So gej killed this iboman's busy, what kind o ibo hero is that?

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.

Ogun people don dupe the Igbo mugu

astrodome:


And your SW and Northern brothers are the customs officers who collect bribes to let them import every thing on earth into Nigeria. Shame on the customs and exercise authorities. It takes two to tango, remember?

Akuko! Like say SE people sef no dey inside customs. Besides, a lot of those importers got connections and illegal waivers from the 'ogas at the top' which were mostly sealed during the SE-favoured last administration of 'anything goes', to bring in these contrabands and consequently messing up the poor guy's business. You should be attacking GEJ's admin and those unscrupulous importers bro.

YoruBanger:


Akuko! Like say SE people sef no dey inside customs. Besides, a lot of those importers got connections and illegal waivers from the 'ogas at the top' which were mostly sealed during the SE-favoured last administration of 'anything goes', to bring in these contrabands and consequently messing up the poor guy's business. You should be attacking GEJ's admin and those unscrupulous importers bro.

Like say there is no Yoruba man who imports anything into Nigeria. Also, is it today that the Yoruba and hausa-fulani-dominated Customs began collecting bribes to allow importation of all junk into Nigeria? Get lost, you hypocritical Yoruba bat.

astrodome:



Ogun people don dupe the Igbo mugu

I pity the guy though, his homeland is not viable. Man must suvive anyhow

astrodome:
Igbo businessmen, especially those from Anambra, are very funny set of people. Imagine moving from Lagos to Sokoto when you should invest in Ebonyi (if large expanse of arable land is not readily available in Anambra)

Are you high on something... Why is ur senseless statement coming before the news.. Endtime mistake, i guess..

astrodome:


Like say there is no Yoruba man who imports anything into Nigeria. Get lost, you hypocritical Yoruba bat.

Yinmu. Keep playing the ostrich there instead of placing the blame where it really belongs.

Erisco himself put the blame where it truly belongs when he said:

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

Interestingly enough, Dangote also runs a Tomato paste factory, I think the biggest in the country, and I'm yet to hear him complain. Perhaps he too needs to be interviewed to hear his view.

astrodome:
This useless (yes, useless to Igboland) Igbo business man, after contributing to develop Lagos is now doing the same in Sokoto and Jigawa while his backyard in Anambra is on fire (figuratively speaking). These are the set of people that would never allow a Biafra country to come to pass because they will lose billions.

This to me proves two things :
1. The Igbos are the most industrious set of Nigerians, ready to do business even in hostile territory.
2. The greatest impediment to the progress of the Igbos is a fellow Igbo man.

IyaIode:

I pity the guy though, his homeland is not viable. Man must suvive anyhow

The guy is definitely smart and savy enough to know that situating this particular kind of biz there is a no-no -- e go don do im feasibility studies about its viability in that region. Sentiments apart.

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.

This businessman is a half backed food scientist. Food colorants are not in themselves inherently deadly; otherwise the US and EU food regulatory authorities would not permit them in American and European made tomatoes. It depends on what is mixed with a specific batch of colorant, which I agree the Chinese can do and bring into zoo countries such as Nigeria where there are no regulations.

In any case, to start with, who ever is heading NAFDAC as of today should be fired. That person is completely incompetent.

What a great business man. I admire him.

The government needs to do everything to protect our local manufacturers. For those criticizing the man for not going to Anambra, business isn't done on sentiments. You locate your business where there is access to labor, raw materials and a ready market. Why incur unnecessary costs just for tribal sentiments?

Things don't work that way.

YoruBanger:


Yinmu. Keep playing the ostrich there instead of placing the blame where it really belongs.

Erisco himself put the blame where it truly belongs when he said:



Interestingly enough, Dangote also runs a Tomato paste factory, I think the biggest in the country, and I'm yet to hear him complain. Perhaps he too needs to be interviewed to hear his view.

Previous government includes who and who? Does that include Obasanjo too?

Regarding Dangote, he is a ''government pikin'' (all govts have favored him), with his hands in many cookie jars. Tomato paste is just a bit of what he is doing. In contrast, this man's business life is just about tomatoes. Do you see the difference now?

astrodome:
This useless (yes, useless to Igboland) Igbo business man, after contributing to develop Lagos is now doing the same in Sokoto and Jigawa while his backyard in Anambra is on fire (figuratively speaking). These are the set of people that would never allow a Biafra country to come to pass because they will lose billions.

The genesis of this mans wealth started from sokoto,in fact he speaks Hausa better than Igbo.....he has invested in all geo political region in Nigeria.Pls let him be.

astrodome:

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.

I

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.

In your bid to label the poor man Anti Igbo & your attempt to take up arms against any form of criticism of your bias towards an utopic dream that will remain so, kindly take note of the highlighted salient points...

Thank me later!!

caprini1:
The genesis of this mans wealth started from sokoto,in fact he speaks Hausa better than Igbo.....he has invested in all geo political region in Nigeria.Pls let him be.

You lie. He was abroad before returning to Nigeria. Read that article with an open mind

caprini1:
The genesis of this mans wealth started from sokoto,in fact he speaks Hausa better than Igbo.....he has invested in all geo political region in Nigeria.Pls let him be.

Don't mind him. His real grouse is that the guy didn't setup the factory in the SE. Very myopic somebody.

Day169:

This to me proves two things :

2. The greatest impediment to the progress of the Igbos is a fellow Igbo man.

A friend once told me that America is so great that only America can destroy America. No external power can do so.

This also is the case with Biafra, in terms of its interest being undermined more by Igbos themselves than by outsiders.

YoruBanger:


Don't mind him. His real grouse is that the guy didn't setup the factory in the SE. Very myopic somebody.

The reason why Eric Umeofia hasnt and wouldnt situate his business concern in the SE is because he is an Osu ibo

YoruBanger:


Don't mind him. His real grouse is that the guy didn't setup the factory in the SE. Very myopic somebody.

Duh! He set it up outside the SE and it is now crumbling. He was also duped in Ogun of land that he purchased. Penny wise pound foolish.

Innoson Motors and others in Igboland are doing well.

astrodome:


You lie. He was abroad before returning to Nigeria. Read that article with an open mind

it is true, he started his first business in sokoto selling spare parts

astrodome:


A friend once told me that America is so great that only America can destroy America. No external power can do so.

This also is the case with Biafra, in terms of its interest being undermined more by Igbos themselves than by outsiders.

Grow up, there is no biabia beyond your imagination that was triggered by election defeatisis ....

99% of your biz people made their money outside of SE so how are they impeding your non progress ?

gwales:
it is true, he started his first business in sokoto selling spare parts

Here him, himself

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.

. By the grace of God, we are very contented and that contentment made me to[b] come back home to establish companies despite the successes we are making in Angola and UAE[/b].

GstringAngela:
The reason why Eric Umeofia hasnt and wouldnt situate his business concern in the SE is because he is an Osu ibo

This right here is what kills me about SE folks, you are wailing about marginalization while right within yourselves there exists caste & intra ethnic strife !!!

Wish they could get that utopia & we watch from the sidelines. No playa hating necessary, they will do themselves bad, all by themselves..

Trust Nigerians to reduce a serious issue like this into useless tribalism

astrodome:


Duh! He set it up outside the SE and it is now crumbling. He was also duped in Ogun of land that he purchased. Penny wise pound foolish.

Innoson Motors and others in Igboland are doing well.

Yinmu. Your problem is that you are too sentimental, as is the case with a lot of you SE bred folks. That he's yet to receive his C of O in no way proves that he was duped. It's not all the time that you purchase a land that you immediately get your C of O. For all we know he may have taken possession of the land while awaiting his c of o, this is not uncommon in Nigeria. Erisco is too big to be 'duped' by any state government without consequence.

What you fail to understand is that the vast majority of successful igbos did not 'make it' in Igboland but rather OUTSIDE igboland. That is the gospel truth.