By Victor Ahiuma-Young
MR Victor Eburajalo is the Group Managing Director of Kewalran Chanrai Group, owners of Afprint Plc, a leading textile manufacturing company now closed down as a result of numerous environmental and other difficulties. In this interview with Financial Vanguard, he gave insight into some of the problems that made Afprint to close down.
Your company, Afprint, was a leading textile manufacturing company in Nigeria. Today, the textile plant has been closed down and you are into other businesses. Why did you abandon textile manufacturing?
Well, like I have always said, the problems of textile industry cannot be completely separated from the problems of the real sector. The real sector in this country is on the decline.
Let me say upfront that the economy is growing, that is what we are told. But it is a jobless growth. We have more people on the street today looking for jobs than we had 10 years ago. This is because the real sector is shrinking.
Why is it shrinking? It is purely the cost of production. When we are talking of cost of production, people look at just power. But I want to bring this to the notice of Nigerians that even if you fix power, what of the mode of transportation? This is one country in the world where you transport virtually everything by road.
Who does that in other parts of the world? There is no way any government in this country would have good road because of our climate, especially down south, where you have all the ports. You have to truck products up north and they go through these roads that are not constructed to take these heavy loads. So, if you look at it, we are losing at both ends.
It is the rainy season now, you can see what the roads have become. You also look at what we spend to generate our own power. Most of the companies in the private sector that did their projections earlier in the year, these projections are all totally thrown over board.
Most of them budgeted for cost of diesel and black oil at a rate they thought they could manage, but today, it is almost double. It is gradually wiping out the profits of these companies.
I say this to let you know that we cannot really compete. You can also not close your borders because we belong to the World Trade Organisation, WTO. All the bilateral agreements that we have signed, we must obey.
At the time textile was in production say seven years ago, greybaft, which is the base cloth that we print on, the one produced in Nigeria was costing us about 80 Kobo per meter. The one coming from India was landing here with clearance and everything from the ports, with less than 50 Kobo.
You can see the wide margin. Apart from that, there is also the cost of the cotton we were using. The government abolished commodity boards about 20 years ago, cotton cultivation and all the cash crops cultivation, no standard, no guaranteed price for the farmer, all of them went up.
I think only about three or four months ago, that the government came back to reinstate the commodity boards. If you look at the chemicals that we need for textile, you will be shocked that most of them are by-product of petroleum. For you to make man-made fibre, you need a peculiar acid and things like that.
The original design for our refining and petro-chemical plants was to produce these raw materials. Several years down the line, we are not producing. So, if you want to produce textile, everything that you need to produce is imported. How can you compete?
I have always said this too, I like to challenge my friends in the labour movement; the attitude of Nigerians to work is terrible. The Chinese today are coming out fast like India and the others. If you have worked with Chinese, you will know that for them, work is a religion.
They have great attitude to work, but we do not have that. A typical Nigerian will do just enough to stay out of trouble. That cannot lead us anywhere. I am not just talking about the private sector alone, it runs through.
For those of us in the private sector, we try to make it look like the private sector is perfect. It is not. It is the attitude of the Nigerian to work. It is not my father’s work and that is why when they leave to set up their own business, they cannot change the attitude.
Again, if you look at the cost of funds, banks are not interested in putting money into manufacturing that has long gestation period. They rather give to the traders.
They give to the traders who take their money for three or four months and pay back with interest. I do not blame the banks because they are not there to do charity work, but business and they must make money for their shareholders. The Bank of Industry the government set up is doing the best it can.
The present Managing Director, I must say, is a hard working person and she is doing her best. But there is a limit to what one bank can do. So, if you look at all these, where is the manufacturing sector? Look at a company like Dunlop, it has closed down, Michelin has closed down and textile is virtually gone.
The real sector has a problem. Let us not rejoice that the economy is growing. The economy is not growing. Tell me one organisation that can be able to tell the public the number of people in its employment.
We do not have the statistics, let alone record them into age groups. We do not even know how many people are graduating. We do not know how many people will go into labour market tomorrow.
So, what are we doing? We think that crimes will just disappear when there are armies of unemployed people everywhere across the country? When people go through higher education, one, no sense of value and no hope, do you know what you have done? The system has only produced clever devils and they will take it out on the society.
Unfortunately for us, those in the position to have corrected these things, their environment is so fortified that you cannot even get them. We are all paying back. So, we moved out of textile with a lot of pains because we have to do business.
It will surprise you to know that most of the machines of the textile mills that have closed down in this country were bought by Asians, shipped from Nigeria to India and other Asian countries and are being used to produce the same materials and send them to Nigerians.
Those at the ports will say, they are not coming in through the ports. But the ordinary man on the street does not care where the materials came from. If you travel by road through the West African countries and see the volume of textile materials that come into Nigeria, you will know that textile business is not viable in Nigeria. So, we left.
What line of business are you in now?
While we were in textile, we went into backward integration, we have cotton farmers. The cotton seeds were used to produce Sunola Oil. Today, we do not use cotton seeds that much, but soya beans and other seeds.
We are still into oil. The group today is heavy into agro and allied industries. We are heavily into fertilizers. We assemble tractors and we have an assembly plant in Ibadan and another in Enugu. We are also into water purification for domestic and industrial use; we are working with the oil companies. We are also into household utilities.
We assemble flat screen televisions; the Daewoo brand and we also do fridges, deep freezers. We are into tyres. We are doing tyre re-threading. Basically, we are heavily into trading. Of course, we sell Mitsubishi brand of cars. We are constantly exploring other avenues of business.
As a Nigerian, how do you feel leaving manufacturing and going into trading?
If you notice my countenance when we started speaking, as a group we are making money, but as a Nigerian, I feel pained that few companies are making money, large number of Nigerians are cut off. The country should dwell on providing employment.
Look at the American economy, every month they tell you how many people were employed this month because they created these number of jobs. They are even comparing month to month.
I do not think anybody today in this country can tell me the number of people that are out of jobs, the ones that are looking for jobs, even the ones that are under-employed because it is not everybody who has a job that is fully employed.
Today, we do not have infrastructure in the country. If you come to things like these, they are also affecting us; we do not even have information. So, for me, as a Nigerian, it is very painful. I remember when Afprint was in production, we had over 3,500 workers. Today, in the whole group, we have less than 1000 workers.
Am I supposed to be happy as a Nigerian? Yes, I am a director of a group of companies that is profitable. I can beat my chest and say yes, we are doing good business, but as a Nigerian, no. What should touch me is how many Nigerians are in employment? How many of them are gainfully employed, that is when I think my country is making progress.
There is a looming industrial unrest over the reluctance of the state governors to pay the N18,000 new minimum wage. What is your take on this?
This issue of the national minimum wage has presented us as a disorganised people. How can state governments that were represented at the discussion come out to say they cannot pay the national minimum wage? Why did they not speak out during the discussions? Do they think Nigerians are not reasonable? They want to use the workers’ heads to negotiate petrol subsidy or a restructure of Federal Government revenue.
Why do they think they can use the Nigerian workers for their battles? I think they are being dishonest. The minimum wage was not something negotiated between organised labour and the organised private sector. It is a matter of law.
Thank God for people like Adams Oshiomhole who knows what is at stake. What are our legislators earning? Not just what they are earning, look at their expenses.
Their job is supposed to be part- time. If people doing part-time jobs can earn so much in gratuities for working for four years, and these same people have mortgaged their conscience, why can the governors say they cannot pay N18,000 minimum wage? I think there is something wrong.
I am sure, as a journalist, you know the burden that you carry. From the little you get, you know how much you have to give out. My cashier has oftentimes asked me how I survive. A number of people are depending on me.
Besides that, I have eight people that I am paying their school fees. If the economy is growing, people in positions will be able to plan and do things according to plan. But virtually all of us are living from hand to mouth because we have destroyed the economy.
What is N18,000? Convert it with the exchange rate and see that it is nothing, yet these people want labour to throw us into crisis.
In any case, those in government will not have any crisis because what do they produce and how do you measure their productivity? But for those in the private sector, if there is a shutdown, we can calculate what we are going to lose, it does not make sense. You cannot be dishonest to your people.
What is your attitude to the privatization of public enterprises; do private organisations always perform better than public organisations?
I tell you, public sector does not perform at all. There is no comparison. When I was in Abuja in my private residence, there were two NITEL telephone lines before the advent of the GSM.
They brought bills to me first and second months. But the third month, I did not get a bill. I went to NITEL to inform them that I have not received my bill and they said please go, we will send it. The fourth time that I went back, somebody screamed and said, what is your problem? We are not sending you bills, why do you come here to harass us? I was shocked.That was my NITEL.
Most of us who were running companies then, for your telephone to work, when you are doing your end-of-year party and you have public relations list, you will find a NITEL manager and a NEPA manager there and nobody even thought of police then.
Some people have to put NEPA managers on their payroll to be able to get power to function. If you look at it, it is more expensive to have dealt with them that way than if you have a private company.
The real sector in this country is on the decline. They do not have records, you go back to them and show them the record, they still insist you must pay reconnection fee.
For me, whatever will benefit Nigerians should be done. But when government is privatizing, please make sure that the tax and all that they are supposed to pay before they take over the company are paid.
Let us not compromise that and let them sell at the market value, not underhand value. Do not sell national assets at underhand value. Let it be transparent and let everybody see it. That is my take.
I do not think government is created to do business. I read recently that the Central Bank of Nigeria wants to set up the biggest poultry in Nigeria, for what? I asked. Have they gone mad? CBN and poultry? Maybe after poultry, they will go into piggery.
It is like they have no brief, they have nothing to guide them. They do whatever they want to do. I like privatization but if you are selling national assets, please sell at market value. Let every Nigerian get value for what you are selling and not this underhand value that has been going on.