Adeniyi Ayodele is the Managing Director, Transelector Nig. Ltd, a company that is into diversity of trading, ranging from exportation, importation, leasing and distributors to Dangote Cement.
In this interview with Moses Nosike of Saturday Vanguard Business, Ayodele speaks on how credit crunch is affecting business dealings in Nigeria, and advises government on liberalisation. Excerpts:
What are the activities of Transelector?
Translator is into importation and exportation of different types of commodities. We also run a haulage unit where we have some trucks in our company that we use in conveying goods for our clients. In our export department, we do export some commodities like cocoa, cashew nuts, ginger and all exportable cash crops from Nigeria to different parts of the world, while we import building materials such as tiles, reels, sanitary wares from different parts of the world like Spain, Dubai, China, etc.
Since your company is based on exportation and importation, how favourable are import duties?
As for the exportation, we don’t pay anything, rather Federal Government do give us grants. We only pay duties on importation. But the only thing is that, there is always review on duties, but the effect is on the end users because whatever duties they charge us, we have to add it to the products and at the end of the day, the domineering effect is that there will be increase in prices even though we try to deliver these things at the most reasonable point, that is, our profit is very reasonable. We don’t believe in high profit.
We sell to meet our customers’ demands in such a way that they will be very happy in coming back to patronise us. We equally sell some of the commodities locally such as cement. We have a very big deport at Ketu where we sell our cement to different customers. We’re also distributor to Dangote cement and we also sell marginroil portland cement which is very popular in south-west here.
A lot of companies have closed shops because of the harsh operational environment in Nigeria, so what keeps you going?
We’re part of the economy. We know there is austerity and meltdown all over the world, but the mercy of God is the major thing that has made us to remain in business. My staff and myself are prayerful. We believe in sincerity, we don’t believe in profiteering, and we have discovered that over the years that integrity can keep you going.
That is the secret of the company. We make sure there is forward and backward integration at all time, while we are pushing some few things out, we are using the proceeds to bring in certain things. So this synergy in our system has helped us tremendously to survive the hardship of the economy.
Moreso, we cut our coat according to our cloth. We don’t operate beyond our means. We want to operate within the limit of financial resources. And mind you, we are into the business of leasing assets to civil servants. We have some states today that a lot of their workers are taking one thing or the other from us such as motor cycle, households utilities – Television Set, Fridges, Air conditioners. Some of these workers we give them and they pay installmentally both in the state and federal. The diversification of our trading has been able to enable us to sustain the hardship
With your experience in the business, which area would you prefer or advise government to intervene so that the business will have some kind of leverage?
As a business man, you need to take credit, but the credit arrangement here is too high. When the price of interest rate is on the high side, both the trader and the end users suffer. Right now, there is cash and credit squeeze. People are not having assess to credit. We need to liberalise our credit system as it is done in Dubai and other countries abroad. Once you have a genuine business and you are paying your tax and government knows that you are a growing concern, they need to encourage you. For instance, most of these things they say they are doing is only on paper, we are not seeing the reflection.
I must be sincere with you. An average Nigerian business man cannot walk into the bank and present his credit and they approve it, whereas if an expertrate comes, even if they don’t know anything about him, they will quickly approve for him. All this need to be reviewed, so that there will be credit rating, a way that business can be helped.
A lot of SMEs complain of lack of assess to intervention fund introduced by government and you are talking cash and credit squeeze, what is the way out?
You see, this company is supposed to have started a new venture, which is setting up an abattoir. On that project alone, we have applied for a facility that has taken more than six months. We have been writing, going to the bank but uptil now, the credit has not been approved. But in other countries, I tell you, a business of that nature which we are even doing in public, private partnership with Lagos state government, would have been approved. There is no guarantee, document they asked us to provide we have not provided, but because of bureaucracy and racism in our Bank of Industry, they are not granting the facility.
However, my advise to government is that Bank of Industry should be given enough platform such that they will be able to finance businesses. Again, in doing that, the requirement should not be impossible that business people would have assess to credit line. I feel there should be a more liberalised way of doing these things and in businesses that are not genuine, you see what you can do in checkmating them. Maybe , there should be merger and acquisition, bigger businesses acquiring smaller ones so that at the end of the day, everybody will be busy doing one thing or the other genuinely.
In the leasing business you mentioned, what are your conditions that gurantees protection of the business?
Our approach here is that you must be employeable and if you are employeable, preferably we would want you to be working either with Blue chip companies or government, local, state or federal. So when we give you form to fill, we will verify and investigate if you are indebted already to your employer or not. If you are not, then we demand for irrevocable standing order or payment from your employer so that before you collect your salary, our own must be deducted and remitted to our bankers, and that means you will not get your salary until ours get to us and that has helped us a lot.
How do you see leasing business in Nigeria?
A lot of Nigerians are not conscious of the opportunity. People believe you have to save so much money before you can buy or acquire assets. In overseas, once you are working, you can acquire assets and that is why they take their work seriously because they have commitments. But here , due to some non challenge attitudes, people are not focused, not serious with their work. So in Nigeria, we still need to enlighten them, encourage them so that a lot of working class people could come in and acquire assets.