WE'LL MAKE NIGERIAN ECONOMY BUOYANT AGAIN - CHIME
However, soon after, he decided to do what he was doing for others for himself, by joining the manufacturing trade.
Today, he has placed his company, Rico Pharmaceutical Industries Limited, on top of the industry scale, even as he has gone ahead to diversify into other areas.
In this exclusive interview with Daily Sun, Chime was optimistic that Nigeria's economy would bounce back to be buoyant again if the energy problem that has held down the economy is fixed.
He also revealed why manufacturing in the country is not thriving well, urging President Goodluck Jonathan to make good his promise in the energy sector.
Excerpt:
Background
I am Sir Eric Chuma Chime, the CEO of Rico Group of Companies. The company group started 20 years ago. We started as distributors of Pfizer, Glaxo and other companies. Later we went into manufacturing, distributing our products and those of other companies…until we began to distribute only our own products. So, we had a humble beginning.
We went into manufacturing 15 years ago. We distributed other manufacturers products for five years and then went into manufacturing in full scale and since then, all our businesses are in manufacturing.
Our initial capital
Capital for any business can never be enough. When we started we got some funds from the banks; we had our own capital we had built up over the years and with this, we went into production. Specifically, we started with little money from the bank (about N2 million then) which we added to our own fund. So, as we grew and increased our loans from the bank to be able to continue in business.
Why we went into manufacturing
Having been exposed to marketing other company's products, I know what it entails and I have the capacity of distribution. I felt that if I could do this well for other manufacturers, why can't I do it for myself. So, initially, when I started manufacturing, I didn't stop distribution. I was combining the two - distributing my own products and those of other companies, raising good funds from the double efforts, which helped us tremendously in building up our capital.
Our Rico Group
We have Rico Pharmaceutical Industry. Before it was Rico Pharmaceutical Chemists and Supermarkets Nigeria Limited but, when we went into full manufacturing, we changed the name to Rico Pharmaceutical Industries Nigeria Limited. We have Rico Container Industries that produces containers and other things; we have Chiz Distillers that produces distilled waters, distilled spirits and other things. And we have Niger Steel, which we have now built up and, in the next two to three months, we will start production.
Our products
Now, we have more than 60 NAFDAC registered products; we produce syrups from Chloroquine, Multivite, Paracetamol, Erythromycin, Riclox, Rivatone, Vitamin C, and lots more. We produce almost all the syrups and, if you go down the tableting line, we produce Ribumol tablets, Locufage, which is for diabetes. We also produce Ibrufane, which is for pain; we produce Glucose tablets and others.
Competition in Pharmaceutical industry
You know that NAFDAC has helped manufacturers in the pharmaceutical industry a lot that most of us now are able to grow. Before now, adulterated products were the bane of the industry and most local manufacturers were not able to meet up with the competition posed by fake drugs manufacturers. But when Prof Dora Akunyili, who was at the head of NAFDAC then, pounced on adulterated drugs, it encouraged the local manufacturers to now come up. Before then, any substandard product they brought in would be far cheaper…and we were finding it difficult to compete favourably with fake drugs importers. So, we were only managing to pay our staff and executed some other things needed to remain afloat. But Prof Akunyili was able to sanitize the system and gave us the filip we needed to survive in the industry. And since then, manufacturing in the pharmaceutical industry has been thriving - having stopped all those adulterated drugs that were coming in from China and India, we are now doing fairly well.
Why pharmaceutical products still come in from China and India
Now, our capacity cannot carry everything; there is still room for people to bring in drugs. There are drugs we are not yet producing here; there are some plants we have not been able to set up. Like myself, there is a new plant I am thinking about to set up at 9th Mile Enugu, if I get the fund. The plant is a big one that will cost billions of dollars. I am still discussing with my partners. So, we haven't got the capacity to produce most of these high-tech drugs yet.
The ones we are producing now are simple drugs per se, but some high-tech drugs are still being brought in from abroad. And when you talk about their own products being cheap, you know that manufacturing in Nigeria specifically is not easy. In one of my factories I spend over N1 million every month in buying diesel and, in overseas, you don't spend such money. Here, we don't have constant power supply, people rely fully on personal power source. I bought a power generator for almost N12 million about six months ago, and all these are what make industries not to thrive well in Nigeria. But we are hoping, with the promise given by President Goodluck Jonathan, that 6,000 megawatts would be added to the national grid in a few month's time. If this happens and the power situation improves, we will be able to compete.
When we talk about China, India, I have always been there and I have not seen any time they say there is no light; industries there are thriving very well. But we are not going to lose hope, with the encouragement the government is giving now the small companies that are coming up to help feed the big ones will help a lot. So, in the next five years any person that is leaving this country, to say, he wants to live overseas will be wasting his time because we will put the country and be able to industrialize it. Like myself, I have about four industries that I am bringing in any time the light situation is improved and the industrial bank has promised to back us up, so when we get money from the industrial bank those of us who have the knowhow to put up industries and to manage human beings, we will do our own and help contribute to the welfare of the nation.
What we are doing now is to put something on the ground that will benefit the public unlike the politicians who always take; we give to the public. So, when adequate infrastructure are put in place, we will be able to build more industries, get people gainfully employed and all these insecurity will be checked. I don't believe in employing too many policemen; if we take that money we pay them, put it into the energy sector and then create employment for people, crime will on its own be reduced; and then there won't be too many thieves to be chased about because they have been gainfully employed. It is idle hands that look for other things, if people are gainfully employed the police would have less job to do and we would use that money to make the nation to grow. Inasmuch as there will be crime; it will be reduced to the minimum level that all of us will be happy to contend with.
Proposed new banking cash withdrawal and lodging ceiling
In Nigeria we have too many good policies, but what is important is the implementation. People always take advantage of good policies and misuse them. Let's see the CBN come out fully on this new policy and also see the workability of the policy. Even the current system we are using is still okay, what is important is for us to ensure that it is not abused. Any good policy that has loophole for people to abuse will still fail, so, this is hinged on corruption we have in the country, you are looking for a way to do a thing right, other people are looking for a way to make sure it does not work.
Our Group and what we do
Rico Containers produces plastics, couplers which we use in the pharmaceuticals, the containers we use in the pharmaceuticals and other areas, but we hope to produce other non-pharmaceutical materials as we grow.
The Chiz Distillers produces distilled water and beverages. The Niger Steel will produce rods and as we advance we will go into stainless steel flat plates. We are talking with our partners, we need funds. This is a no-go area if there is no constant power supply. We are supposed to have started three months ago, but because we are not sure of the power situation yet we are still holding on; the generator that will help us to power the place will take us about N40 to N50 million which will change our production plan. The money we would have used to buy machines we would use to buy generating sets; that is the problem we have in Nigeria. But when we are sure of regular power supply we will deploy our fund to buying of machines.
Competition
Everything depends on ones management style and administration. In everything I do in life I put in my best, I don't believe in do what I say, I always tell my people to do what I do. I start work like every other small staff of the group. I come to work by 8:00 a.m. and close by 8:00 p.m. or 8:30 p.m. and this enables me to meet up with challenges facing the organization because I am always present to direct how things should go on properly.
Despite this, we have the discipline that is needed in the industry and obey all the rules that are governing the industry. We also carry all our members of staff along and everybody is happy to put in his or her best. Remember that the other workers are looking up to you as the manager of the place and would like to imitate you, it is not when you don't come to work, you will want the other people to come to work. For instance, when I visit some government ministries in the morning around 9 O'clock and nobody is there I feel that this is why the government output is falling. Because we in the private sector know that if you are sleeping, your business will be sleeping too, so you have no alternative than to come up to push the people and the business so that it will grow. So, this discipline helped us to be above our competitors and our business is growing.
My advice to President Goodluck Jonathan as a manufacturer
I will tell the President to make the power promise to be real, let all the money spent on power to be real, let us start to see the result and every other thing will start falling in line. I don't believe in many-point agenda, seven-point agenda or this or that agenda, let's get the power going and the other things will start falling in place.
You see the Kaduna Cotton industry, it employs about three million people and when it starves these three million people will be off, but if it is sustained these people who roam the streets of Kaduna, you will see them in the factory, they will be busy even if it means packing the clothes that are produced, then you will start sorting things out and every other thing will fall in line on their own, security will improve and even the foreign investors will start coming.
The business I have here, we are talking about bringing people from London to come to invest, but they are dragging their feet because they think that this militancy thing can crop up again any time. But when power supply is strengthened, all these industries even the old ones will come to their full capacity, some manufacturers now are operating at 20, 30 per cent capacity, but if there is adequate power, all these companies will operate in full swing and they will generate employment.
For instance, when we begin fully our Niger Steel, I will employ at least 2,000 people from Enugu State, but we cannot do that now because of this epileptic power supply. So, let the president face this power problem squarely now, let's get it right and people will come up to establish industries and definitely other things will follow.
Then the Bank of Industry should carry out a thorough work in encouraging real manufacturers and not those who run portfolio companies, they claim to have registered many industries, but you discover that they only exist in their portfolio and are nowhere to be found. So, the bank should make sure that the people they give money are those who are on ground and who will deploy this money in building industries that will help to grow the nation. If this is done other things will follow; and not allowing the money they said they are budgeting to end up in the hands of few individuals. So, if things are done honestly in this country I don't see why people should be lacking.
Also the economy will develop more rapidly if President Jonathan who had embarked on good electoral reforms that saw us conducting credible elections this year will further go ahead to ensure that public offices are made less lucrative. A situation whereby elected representatives of the people and people in government wield excessive power and made to have access to too much money, it is the nation's economy that suffers. You will discover that monies meant to develop the economy are diverted by powerful politicians. But now that the votes of Nigerians are beginning to count, it will be good if the president ensures that public office is made less lucrative.
Managing our group of companies
As I said early, one is the discipline; people must see that discipline in you. There will be a live you are living that you cannot correct another person. But when you show good example people will imitate you. So, my administrative managers see the way I come to work and do my own things and fall in line; so, if you play with your job people will see it as the standard and behave that way. So, all my workers look up to me; like now I work in Enugu, in the next two hours I will be leaving for Anambra and when I get there I will work with the workers there and after three or four days I will join the people here again to see how they are doing, get their reports. Again you also try to encourage your workers, like my sales representatives, we give them targets, you move and you get other incentives and everybody is happy.
Minimum wage of N18,000
Most of us in the private sector cannot pay that; however, some of our workers in the private sector are receiving more than that. There are companies that make huge amount who can pay; like myself I have about 200 to 300 workers and if you check the profit you make from the business and you are paying such minimum wage, you will be paying from you capital. You must pay salary that is commensurate to your capital income. For instance, if you make like N3 to N4 million in a month, you should not pay a wage bill that is above N3.5 million so that you will plough back the saved N500,000 or so into the business to keep it running. So, businesses pay salaries according to their profits.
Unwinding
I still find time to unwind, my recreation time is usually at the weekends, I am a golfer, I used to play good long tennis, but now that I am in the late 50s, I am now playing golf. I play golf every weekend, for four, five hours I am on the game. When I return, I get set for other social activities like weddings and others. After this I return to my work.
Rico in the next five years
In the next five years, the sky is our limit because we have a very big plan. We are setting up a big plant are at 9th Mile in Enugu State. And we are also thinking of a tourist centre or a university we are going to build very close to the UNTH (University of Nigeria Teaching Hospital). We already have a property there. Besides, we have a lot of initiatives that the Rico group will develop within the next five years, all of them very big projects.
For instance, we have plans to partner with the Enugu State government in an agricultural programme that would be rural based. We will liaise with the 17 local government areas in the state in this project with an aim to providing employment for youths in the rural communities.