October 30, 2009

Leather industry can generate 70% revenue for Nigeria, Olumide

By Moses Nosike
Wole-Madariola Olumide is the Chief Executive Officer ,CEO , of FUT Conceptus Manufacturing Ltd., manufacturers of leather footwear. Olumide is one of  the few Nigerians that have entrepreneurial drive, an industrialist who believes he can succeed despite the odds facing the manufacturing sector in Nigeria.

Wole-Madariola Olumide: Providing facilities for manufacturing is a necessity.

Wole-Madariola Olumide: Providing facilities for manufacturing is a necessity.

In this interview, he speaks on the manufacturing industry and says  it  would reduce  the rate of  unemployment  amongst other things. Excerpts:

When did  you develop   interest  in shoe business?
It’s just an  interest. One, I was not fashion -conscious until I became an adult but as a child and  teenager, I had the opportunity of selling for my grand  father  who used to be one of the first set of  distributors to Lennard in those days.  As I was growing up, I had intention of  opening shops and selling  shoes. I never thought I would set up a leather  footwear factory.

But  as I was growing up, I was opportuned   to visit countries where footwear and leather products originated from. The interest increased until I  found myself  wanting to establish a factory due to the vacuum created.

That opportunity came when the former President Obasanjo placed embargo on importation of foot wears.  If Obasanjo has not done anything good to anybody, he has done to me through that. It was a favourable policy  in the sense that hundreds of the  staff  here today are gainfully employed.

How is the rate of sales?
Actually, the rate of sales now is encouraging. People are beginning to know more about the company. At the moment, we have so many schools in Lagos that are placing orders.  We produce and distribute by order. And we  have many orders at the moment. If not for the situation of things in the country, FUT Conceptus, is a big industry with potentials and market in Nigeria.

However, this is the only functional shoe manufacturing company in Nigeria at the moment. Awareness is growing. We also have other people coming from West African  coast like Ghana, Cotonou, Sierra Leon and  Benin Republic to place an order.

You said that the company is the only functional manufacturing shoe company in the country, what’s the secret of your survival?

The enabling environment is not there  and this has forced others to close shops. We’re also facing it  but the technology we invented and applied is helping us to remain in business which others  don’t have. And the situation that brought others down is still existing  but we want to believe that the government we’re having today should listen to what is happening because manufacturing is the bed-rock of development of the nation.

So, if really we’re serious and want to get to Vision 2020 they’re talking about, the attitude must change.
Now that facilities are not there for manufacturers, how do you cope with the cost of production,  wages and salaries?
Actually, it is astronomical.

The infrastructure needs to be in place. If we really  want this country to develop and industries be all over the place as they are in other nations, it’s possible because we have what it takes . What you spend producing a product  here can be used to produce three in other countries. It’s painful.

What’s the company’s next strategy to remain in production since the enabling environment is not there?
Like I said earlier, there is no substitute to infrastructure. A situation whereby companies on their own provide two to three generating  sets, provide for access  roads  to their companies, and provide water is a big challenge.

I tell you,  there is no half way to government providing infrastructure. We need to implore government to do what they have to do if they are serious. We’re just trying to do what we can do on our part to keep  existing. The condition is not encouraging but  in other countries of the world: Japan, America, Britain and even Asia ,  what is helping them is infrastructure. The enabling environment has to be in place.

Generally, how do you see shoe business in Nigeria?
I can call it a bastardised sector because it is a sector where anybody can make shoe  but  not everybody makes  good shoes. Before our advent, you find cobblers all over the places, you find people in the Eastern  part of the country having mini establishments  to make one or two things. It is a sector where you find both mediocre and experts. Suddenly, the experts disappeared because they didn’t have  favourable conditions to work with.

The problem was compounded by the Asians coming into the country with all sort of products, products they themselves cannot put on . It’s a sector that has not been well attended to  by the government most especially.

But I tell you that the leather industry in Nigeria can generate as much as 70%. Go to the northern part of the country, you will  see everything that has to do with leather there. Some Europeans come to the country, take raw materials from us  to their country  and refines  it and still brings it back to sell to us as finished leather which we buy as Spanish, Italian, British or American products. You can see the indolence of the government in that respect and it  is causing the country a lot.

What are the necessary things involve when venturing into leather footwear production?
Shoe making production can actually be classified according to the capacity that the investor desires and that must go in line with your finance. So, if you desire to own a facility that produces 50 pairs of shoe in a day, that would require a minimal injection of fund.

You don’t compare it to what you used  to set up for a facility that will produce 5000 pairs of shoes a day. So in terms of fund injection, you have to think. The more you desire to produce as in the number of pairs of shoes or bags, the more money you have to invest in the machinery. The structure is also there, you have to think of  the people that will man this machinery, the durability of these machinery , whether they are able to stand the test of time. That takes you to the area where you get the machines. Do you get them from Asia? Do you get  a cheap one or a purely European one that can take you  for the next 25 years without  breaking  down, except for minor servicing?

You will also  think of the experts that are going to work on those machines. If you’re purchasing a machine that  people in this part of the country have operated before or have  knowledge of , then it might be cheaper for you. But if you bring in very modern machines that are strange to the people who have experience  in shoe making in Nigeria, you know you will have to invest in foreign experts. I tell you, there a lot of things to  consider  when you want to set up a footwear facilities.

How do you see government duties on imported goods?
If I have my way, I would want to advise the government of this nation to improve industrialisation. You allow people that are into real manufacturing to handle the business, not somebody registering a manufacturing company and importing  the product that he said he is manufacturing. What we are talking about is real manufacturing from scratch to finish. When we have such people, I think they should be able to enjoy certain incentives. You give them free importation duty.

Again, the energy thing is affecting the manufacturers. The government should also think of other alternative ways of generating energy.  The most difficult thing is ordering for raw materials in, say , June for instance  and it stays there till September  because of one policy or documentation . If there is a sector that should be given preferential treatment, it is manufacturers.

By now, Nigeria ought to have been a fully industrialised state going by the abundant natural resources in this country but reverse is the case. What do you think is responsible for this?

The attitude of the people and the government has a lot to do with the problem and I would blame the government . You see, the oil is a blessing  and a curse at the same time.

If Nigeria had not discovered oil, we would have had a better life in industrialisation. What do I mean by that? If you use a dark scarf to cover someone’s face , he cannot see ahead. That’s what oil has done to our leaders. It made them to close their eyes from ground nut oil from the north. It made them close their eyes from palm kernel from South East, Ondo and Delta States.

It made them close their eyes to cassava, even limestone. What happened to the cement industry? I will say that  the pace is very slow  because Nigeria has another source and so, industries are neglected because of  what oil will fetch the nation.