- Firm berths premium sanitary fittings in Nigeria
By YINKA KOLAWOLE
GROHE Group is the world’s leading provider of premium bath faucets and showers, kitchen mixers, thermostats and installation systems, with consolidated annual sales of €1.4 billion (Euro) in 2012. The German company formally berthed in Nigeria with public presentation of in Lagos, last week, to an audience that included journalists, architects, home designers, fashionistas and interior decorators.
In this interview, Mr. Simon G. Shaya, GROHE’s President for East Mediterranean, Middle East & Africa, said as a global brand for sanitary products and systems, the company cannot afford to overlook the economic potential in Nigeria, being one of the fastest growing economies in the world. Excerpt.
Overall presence in Africa
We started the first Africa/Middle East operations in Egypt in 1973 and then in South Africa in 2001 and started operating informally in Nigeria in 2011. Now we are in 18 locations across Africa. In Africa we have a total of 4 regional hubs – Cairo, Johannesburg, Lagos and Nairobi – for the north, south (SABC), east and the west but apart from that we have a lot of satellite offices – in cape town, Durban, morocco, Algeria, Tunisia with plans to establish network of offices within Nigeria like Abuja where a lot of projects business are now being conducted.
Your vision for the Nigerian market
No doubt the pulse of Nigeria is here in Lagos. Nigeria means business and business means Lagos. This is a commercial hub where we cannot afford but to be very successful in the Lagos area. But Nigeria is a big country as well. We have plenty of cities that once the roll out is done in Lagos we have to tap into all the cities in Nigeria.
Any plan to start a production plant in Nigeria?
We didn’t come to Nigeria just because we want to establish one other sales point. We came because we are committed to this market and we believe in the opportunity and the size of the economy is unbelievable. But if you ask anybody who is into production, he needs a certain volume in order to make a factory up and running, profitable and ensure that the quality is sustainable, and you can afford quality management and improvement in your processes.
So big tankers need volume, volume you can only achieve in big economies like in Nigeria. If we want to establish a successful business model in Nigeria, then contemplating into posting production facility becomes as given, because you need to produce where your largest markets are.
This is why we have a plant in Thailand because it’s in the centre of Asian business. As at the time we set up Thailand, China was not really the hub because everything was more or less around South-East Asia and this is why at that time Thailand made sense. Hopefully one day, and very soon , due to our success in Nigeria we will contemplate posting another factory somewhere here.
Challenges to doing business in Nigeria
As a foreign company coming into this country, we would like to see a little bit more business-friendly atmosphere – less red tape, less bureaucracy, easy access to importation, not big hassling documentation. And I’ve seen in the last 4 years that it is moving in the right direction, we would like to see a bit more acceleration and focus in the process which makes it for international brands quite logical to come and invest here and grow their business.
Your plan to be competitive among other brands in Nigeria
Nigerians are exposed to the outside world, really active on digital media, surfing on website. It is a very young and dynamic population.
I don’t see as a challenge for us to establish our brand. Nigerians love quality and specifically in the past they have been exposed to not so quality products and that is why you see the affinity of Nigerians to shopping worldwide. They go to the super brand shops, flagship stores. And that is why we believe bringing this brand represents a powerful message which we believe will be a successful story.
Plan to improve on the 14% sales generated in Middle East and Africa
My personal target, being responsible for the region, is to grow it to 28 percent. Seriously, we have around African continent massive opportunities, not only in Nigeria but as well in surrounding West African countries. We have really good economies developing – Ivory Coast, Ghana and all the small African countries will look at the success in Nigeria and like to copy the success into their own countries.
This is why I’m so excited about success in Nigeria because it will be a role model for all the neighbouring countries and we have really plenty of opportunities around African states that they will really take what is happening in Nigeria as a role model for their countries. We should not underestimate the power that Nigeria has in the region, in the politics and economy
Biggest challenge in Africa
It is a challenge as well as excitement. You have multitude of cultures, different views around doing business and different expectations from one area to another. We needed to adapt a lot of our communication to the local market and we still need to do a lot of that.
And then the geographical stretch is another challenge because you really fly for hours across Africa and you are not, sometimes in terms of resources, so flexible because you need multitude of hubs in order to provide services for all your partners in this market. Nevertheless, all of these are challenging but exciting because you feel that you are so close to the community and you are developing both the communities and your company in the same way.