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Emulate Sterling Bank, fund only genuine businesses — Sofoluwe

  1. Olushola Sofoluwe is the Managing Director/Chief Executive of Global Sharon Limited. In this interview with our correspondent, Sofoluwe speaks on the challenges facing the packaged water business and how government can help to resolve them.
  2. AT what point did you decide to venture into business of packaged water?

    Let me start by saying that before anyone ventures into any business, it is important to test the market. You must research into what the market wants and what players in the industry are doing to meet customers’ needs. Also, you must find out the things that they are not doing and come up with strategies to go beyond the available level of service. You must be able to identify what you want to do differently because if what you are bringing to the market is not different from what customers currently enjoy, there would be no basis for them to switch to your brand that is still new.

    Olushola Sofoluwe

    So, we looked at what producers of table water were doing. We identified the area with the least concentration of producers and we decided to go as far as Kaduna to open our first office about 15 years ago. The number of companies producing bottled water in Kaduna and its environs cannot be compared with the number in Lagos.

    Least concentration of producers

    Lagos and its environs have the highest concentration of players in the production of table water in the country. So, we considered Kaduna as a very good alternative market for us when we started the business.

    Did you regret that decision?

    Not at all, I must confess that that decision was the best at that point in time as we captured the market within the first five years of operation in Kaduna. Apart from the Kaduna metropolis, our products were also in high demand in the interior. We were just everywhere.

    So, the return on investment has been good?

    I cannot but agree with you. The reason is simple. It takes less effort to sell an excellent product. We invested a lot in technology and that is what you need to survive in this business. Once people are convinced that your product is clean and without any form of odour, they will patronise you. The fact is that water is life. Whoever you are in life, you need water to survive. That is why we made provision for all demographics.

  3. We have the bottled water in various sizes for the elite and we also have the sachet packs for the people who cannot afford to buy table water. So, the market potential is so big but let me assure you that it is only those who are ethical in the way they produce water for sale that will survive in this market.

    What are the main challenges facing this business?

    The presence of fake producers of table water is a major problem and this is giving the sector a very bad name. NAFDAC is trying as much as possible to weed them out by insisting that all producers of table water must have a number which we must display on the package. But I doubt if NAFDAC has the personnel to monitor compliance with the directive. The idea of registration with NAFDAC is excellent. It is a standard practice worldwide and it will help to protect the interest of consumers.

    Financing has also been a major issue for those of us who are willing to invest in the right technology. We are fortunate enough at Global Sharon to have a financial institution such as Sterling Bank supporting us. The bank has been wonderful to us, not only in the provision of the right financial support but also in extending this support to providing financial advisory services at no cost.

  4. Times without number, people have asked if Sterling Bank has interest in the company because their officials are always here to see what we are doing and offer support where necessary. So, other banks need to emulate Sterling Bank by providing financial support to genuine operators in this business.

    Besides, we have the challenge of infrastructure. In order for this business to thrive, there must be steady supply of power to enable you to continually produce and meet customer demands. But the best we get here is an average of two hours of power supply per day. So, we sustain the business by using generators and in order to be on top of the game, we are forced to use more than one generator.

  5. The additional cost that this represents at the end of the day is enormous. Yet, water production business is not the kind of business where you can increase your price anyhow otherwise you will find yourself out of business. It is a struggle to cope in a situation where you spend over N20,000 on fuel alone for generator every day. This is eating deep into our profit margin but we don’t want to lay off members of staff.

    What are the solutions to these challenges?

    Finance is very important in this business. You need money to bring in the right technology to enable you to produce quality packaged water. And like I said earlier, other financial institutions must take a cue from Sterling Bank by supporting businesses, not only packaged water business. If we must diversify our economy and encourage industrialisation, the financial service sector must come in to support. That is the way it is done in the industrialised nations of the world.

  6. The painful thing about this is that some banks are more than willing to support businesses that are already well financed. Many of the blue-chip companies don’t even need the banks’ money again but many banks continue to offer them loans to the detriment of small businesses looking for small money to survive.


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