Chief Eric Umeofia, CEO, Erisco Foods Ltd President/CEO speaks on Forex policy and manufacturing sector

Nigeria has comparative advantage over China and most developed countries in the production of tomatoes and many other farm produce, a status attributable to natural endowment of the country with better soil types. Exploring this potential, according to Chief Eric Odinaka Umeofia, the President/CEO of Erisco Foods Limited, an indigenous manufacturing company with over 18 high quality food brands, all produced locally, is sine qua non to the success of President Muhammadu Buhari administration’s economic diversification policy.
In this interview with Neta Nwosu, Chief Umeofia, who has been in the forefront of the promotion of made in Nigeria goods, narrates why he refuses to toe the easy and more profitable path of importation like his contemporaries, insisting that the new CBN Forex Policy, if sustained, will help revamp the nation’s ailing industrial sector. Excerpts:
When exactly did Erisco Foods Limited begin?
Erisco Foods Limited is a member of Erisco Bonpet Group, which started over 30 years ago in Sokoto State, North-West Nigeria. I actually started out as a spare parts dealer but gradually evolved into a corporate businessman and subsequently the industrialist you know today. Formerly Erisco Foods Processing Limited, it was incorporated in 2004 as an indigenous manufacturer of foods products in Nigeria. We began operations in 2009, producing one brand of Tomato Paste in sachet called Nagiko. This was followed shortly by the introduction of another brand of tomato paste, called Ric-Giko. We currently have two brands of tomato paste in sachet, along with other products like Nagiko Sugar, Nagiko Monosodium glutamate and Nagiko Basmati Rice in the market. We are currently expanding our product lines, introducing new products to the market. In a nutshell, Erisco Foods Limited is the ‘home of great nutrition’.
You have over the years relentlessly invested in food production, providing local alternatives to products that hitherto have largely been imported, and for the better part of these years, amid a stifling business environment. What informed your diversification into food production?
Erisco Foods Limited was established with the sole purpose of producing healthy and high quality foods for Nigerians. Over the years, our products have not only been certified good by relevant regulatory agencies of government, they have time and time again been proven to be far better in quality than the substandard imported products our market is flooded with today and by people who are only interested in making huge profits without taking into consideration the health implications of these products on Nigerians. The truth is that I have been invited severally by this group of individuals to be part of their scheme, but I would rather stop production and close down this company than engage in the importation of any product that could have adverse effects on the wellbeing of Nigerians. Do you know that after I said no to their offer, they went ahead to insist that I, at least, stop making comments about the poor quality of the products they bring in and give them freedom to make money, but I can’t keep quiet, especially when I know that we can produce better versions of these products here in this country.
Are you saying that most imported foods are not only substandard, but may also be hazardous to the health of Nigerians who consume them?
Yes! That is exactly what I am saying. I will give you a typical example; we have been in the forefront of the protest against importation of substandard food products until NAFDAC itself conducted a test on imported tomato paste brands. The test revealed that 91.9% of tomato paste products (what you call ‘Tin Tomatoes’) imported from China are substandard and according to the World Trade Organisation (WTO), if over 70% of products imported from a particular country falls below standard that the regulatory agency in the importing country has the right to stop forthwith the importation of such products from the country in question. However, in spite of the fact that Nigeria is a signatory to the WTO charter, we have not really been enforcing this principle. The truth is that the quality of tomato paste we import into the country today is far lower in quality than that consumed in Europe, America, India and even in China where they are brought in from. To confirm the fact that these importers are only interested in the profits they can make, do you know that they don’t even bother exploring or sourcing for their raw material from our local farms, which are far better than those in China? How can any well meaning individual seek to make money at the expense of the health of his fellow countrymen? They don’t mean well. Do you know that this cabal that continues to import these fake tomato products don’t even eat these foods they import? In the first place, I do not see any reason we should be importing things that we can produce locally; if you asked me, I would say that it is criminal!
Why do you say so?
Before these importers started going to China to import these goods, most of the products we brought into the country were brought in from Europe. The Europeans make sure it is the same standard with those they consume in their country. However, the reverse is the case with these imports from China, which are made up of mainly starch and colourant.
Also, apart from the low quality and the health implications, when the market is flooded with these cheap alternatives, its availability tends to frustrate even the local industries, which cannot compete with the low prices, forcing local manufacturers to stop production and close down their businesses. The implication of this is that thousands of workers are thrown into the labour market. There is no way we can meet with our target of creating jobs for the teeming population of youth in our country except if we put an end to this practice once and for all.
Some of these importers have argued that the reason they continue importing these products is because the quality of farm produce, for example, tomato, is by far lesser than those produced in developed climes, especially those we import the finished products from?
Of course, that is what they would say; this situation is akin to giving dog a bad name in order to hang it. The truth is that Nigeria’s soil is better and more suitable for producing tomatoes than most of these countries we import finished tomato pastes from. According to research, the Nigerian soil is the third best in the world for producing tomatoes. The quality of tomatoes we produce here is one of the best you can find, not just in Africa, but also all over the world. The problem is that we have not really taken out time to explore Nigeria’s agricultural potentials, of course, because our focus has been on crude oil. The only area where we have issues is in the area of redness of tomato, which is limited to some tomato farms in Western Nigeria but, as you know, Northern Nigeria, where tomato farms are concentrated, we have 78% to 80% and it takes care of that. We are doing very well, so when they tell you that the quality of tomatoes we have in the country is very low, that is a lie. I have invested heavily in it over time and so also has Dangote. That is why we are happy with the recent Central Bank of Nigeria (CBN’s) policy, depriving importers of such products foreign exchange. Our import bills are very high and most of these things we import are things we, as a people, can comfortably produce here ourselves. There is no way we can grow as a nation if we continue in this path. It is so painful seeing these importers; most of them foreigners come here with little or no money and become multi-millionaires overnight at the detriment of our people. What these foreigners, mostly of Indian and Chinese extraction do is to use Nigerians, who are ready to mortgage the future of the country, as front. So, when you see people say Union of Tomato Importers protesting, it is actually these foreigners, using some gullible Nigerians as fronts to achieve their sinister plans. Nigerians should understand that importers, who bring in substandard tomato products, and any other product for that matter, don’t mean well for the country. Instead of patronising these persons, we should instead settle for fresh tomatoes and, during the dry season, when we can’t get fresh ones, then we settle for those processed within the country. One fact that these so-called unions fails to understand is that if we stop importation of tomato products and start patronising local manufacturers like me, it will result in expansion of our production capacity by, at least, five times, which will mean creating multiple jobs for our teeming youths.
So, does this mean that the point of view held by these importers that if the current CBN’s forex policy is sustained, it might lead to thousands of jobs being lost not tenable?
The fact is that only about 15% of the staff engaged by these importers is Nigerians, the remaining 85% are their compatriots, who migrate here to work. I want you to note this, Erisco Foods Limited has the largest tomato processing plant in Nigeria and the entire work force of all these importers are not up to the number of employees we have. I say this with every sense of responsibility; Erisco Foods Limited is ready to absorb any genuine Nigerian who may lose job as a result of this policy. Do you know that they have over 1, 000 foreigners of Indian and Chinese extraction in their sales department alone? Their entire workforce is not up to 500, but they keep carting away billions of Naira from the country in the name of import. Not just tomatoes alone. Do you know that some of these importers have over 100 brands they import, most of which already have local alternatives or that can be produced locally and yet they brag about it? It is high time we put an end to all of these.
Another sad thing is the low quality of training and treatment they give Nigerians they employ. The average Nigerian, who works with these importers don’t get up to the feeding allowance we pay their counterparts we employ here at Erisco Foods Limited. They use Nigerians as slaves because they don’t have respect for the life of the average Nigerian.
These importers also allege that one other reason they have resorted to importing tomato products is because we don’t produce enough farm produce. They claim it is to make up for the deficit?
That is far from being true. Our problem has never been with producing enough but rather with preserving what we produce until a rainy season comes again. Like I said earlier, we have one of the best soil types in the world, which not only ensures that the right quality is produced, but more than enough quantity is made available. That is where companies like us come in. To buttress this point, at the moment, Erisco Foods Limited is actually working very hard to make sure we begin exportation of these finished products in the nearest future. We are heading to export very soon. The problem is that these importers are not ready to work hard, they prefer the easy way out, which is importation, but because I don’t agree with them, that is why they have been against me, threatening to even kill me. But I thank God for President Muhammadu Buhari, if it was not for him, people like us would have been put out of business, especially amid the stiff opposition we face on a regular basis. I believe in God and in the country, Nigeria, and that is why if you look at our shelf, you will find over 18 brands, but none of them is a foreign product and we are constantly researching so we can develop more. In the next six months, we would have another 10 by the grace of God.
Some analysts have said, instead of restricting the importation of these products by denying importers forex, they should rather allow them, but increase tariffs and levies, which would translate into more funds for the Federal Government. What is your take on this?
First of all, what the CBN is actually saying is that they don’t have enough. So, what is available should be used for importation of goods we have dire need of, for example, some raw materials, machineries or even hospital equipment that we can’t produce for now, instead of wasting it on things we can produce here in the country. To import foods that we can actually produce better here in the country should be considered an abomination. Whatever we are facing now is short-term, it won’t last and in the end we would all be glad the government took this decision.
The new no-nonsense Customs boss should realise that there is no need increasing tariffs, which, at the end of the day, may kill our economy, just because the NCS wants to reach its target. It is better in the long run that more jobs are created for the teeming Nigerian youths than for it to meet its target. With more jobs, our economy grows; the standard of living of Nigerians is improved and the government can even generate more from income and company tax than from import duties. It will also help in reducing crime in our society, caused by high rate of poverty and in some cases idleness. We would like to encourage the present administration to continue in its decision to diversify the economy. President Buhari should go on with his plan to resuscitate the mining and extractive industry, give the much needed support to the agricultural sector and create the right environment for local industry to thrive and if that is done, I can assure you that in less than eight years, Nigeria would have become one of the best economies in the world.
Could you please share with us some of the peculiar challenges you have faced spearheading this admirable course?
When we started, we actually approached some banks to partner with us and help finance this dream, but it will amaze you that they all turned us down. They told us that our plan was not feasible and advised that we joined the rest of the people and import tomato concentrates instead of producing.
How have you been able to surmount that challenge?
I was undaunted, majorly because I had a dream. So, what I decided to do was to source the needed finance from my other flourishing businesses. You see, we have business in the United Arab Emirates (UAE) and in Angola doing very well, and until recently, it is the proceeds from these businesses that we have used to sustain Erisco Foods Limited in the face of these challenges and this is simply because of my love for the country and my passion to see our economy grow. With these funds, I supported this dream until it became self-sustaining. Do you know that because of the outstanding successes we have recorded over the years, these bankers who once told me local production of tomato paste was not viable now rush to me, to see how we could work together?
What has been your response to them?
I have always shunned them because I don’t need them any longer. One other challenge, not just Erisco Foods, but also all other businesses in Nigeria face is multiple taxations. Sometimes, these levies are even outrageous. I will give you an example; we used to have one warehouse on Morrison Crescent. This warehouse is not connected in any way to the national electricity grid and neither did we use generator there. Do you know that the Local Government Council came at a particular point, requesting that we pay TV and radio permit and when we paid deaf ears to them they decided to lock up our warehouse. I was really vexed by that development that I took them to court. It was after then they ran away and stopped disturbing us. It hurts me because my businesses flourish more outside Nigeria than here, my country. But nevertheless, Nigeria can do better if the right things are put in place to allow business to flourish in the country.