Paul Orajiaka: I Used $100 to Build a Multi-Million Dollar Toy Enterprise

0

Dexterous, diligent and devoted, he sits in the corner of his father’s workshop doing some carvings. His father steals a glance at him with pride; he does same at the other children as they all engage in various wood carvings. For many years, as a child, that is his routine. As a young man, he is determined to promote the works of his father. Upon completion of his secondary education, he headed for the US Embassy in Lagos State to get a visa. It is a dream that did not come true –he was denied a visa. From seeking to travel to America he ends up in Idumota. The Chief Executive Officer of Auldon Limited, Paul Orajiaka, in this interview with Eromosele Abiodun talks about how he became an entrepreneur at the age of 19, how from $100, he began a business organisation now running into billions of naira and how he strikes a balance in business, education and family

You started business with less than $100 but today you have annual revenues of more than $10 million. Can you tell us who you are and how you made this remarkable achievement?
I graduated from Igbinedion Secondary School. Afterwards, I came to Lagos with the hope of going overseas. I and a couple of my schoolmates went to the American Embassy; they all got visas to travel out but I was denied a visa. I had to stay back in Lagos with my elder sister and her husband, an importer in Idumota. While I was waiting for the next opportunity to get American visa, I started keeping myself busy by working with my brother in-law. He had a company called Arigold Limited. Coming to Idumota opened my eyes; I saw a lot of young men doing relatively well materially. So, I said if I stayed back, work hard enough, someday I would make it. I started off in Idumota working with my in-law. Gradually, I was making it. So, I started my own business importing my own line of products; had my own store and here I am today.

What business was that and how will you describe your childhood?
My father was an artist; he had a workshop where he made craft. I am actually good at carvings. All my dad’s children used to do carvings in his workshop. My father was so strict; we were not allowed to play around even on weekends. From Monday to Friday, we were in school and on Saturdays we were in the workshop. We produced crafts. He had a way of instilling discipline and hard work in us; also we learnt how to be disciplined in terms of money. Often, he told us, ‘The activation of trinity of the three H, your head, your heart and your hands; where your head conceive things, your heart must have passion and your hands must be skilled to actually bring these things to fusion.’ To him, everything is not about academics, he believed in getting your hands dirty. That was why he made us to work in the workshop. Even when we went to boarding school, during holidays, we didn’t have time to play. He had a big showroom where he had all these expatriates back then in Warri who came to buy crafts when they wanted to go back to Europe and America. As kids, we also had a small showroom where we displayed our carvings for sale. My dad always gave us 40 per cent of the money when our carvings were sold. We had bank accounts but we couldn’t withdraw from it without our dad’s consent. That was how my dad raised us until we completed secondary school and then it was time to go further away from home.

You started business with less $100, how did you get your seed capital?
I was working with my in-law and had a monthly pay. It was quite small but I was very happy because I loved the knowledge I was gaining from him. I had friends who were bringing things from the UK and because of the nature of my in-law’s business I had to think. It took time to produce paints in China and freight it down to Nigeria back then. He always had downtime in his business; we tended to have more activities when the goods arrived. During the downtime, I would go to my friends, to buy goods they brought in from the UK and sell them to supermarkets. I was supplying Park ‘n’ Shop sewing machines and that’s where my very first business actually started. I was however using my in-law’s company name because I didn’t have an invoice. I used his invoice to do the supply. My friends were also importing frying pans from the UK and the Park ‘n’ Shop guys loved the products because they were unique. After a while, I started introducing my in-law’s products, such as rechargeable lanterns. The toy business was more of an accident. Park ‘n’ Shop had a long process of processing payment. You had to spend a long time in their shopping mall waiting. At one of those times, I noticed a particular shelf where toys were displayed, because I didn’t grow up with toys, I loved them.
I was the son of a wood carver, my dad didn’t spoil us. It wasn’t that we didn’t have the money. Dad wasn’t the type that would buy toys for his children. As a result, my waiting at Park ‘n’ Shop was no longer boring; I would spend time admiring the toys. At a point, the toy shelves started drying up; it appeared the supplier was no longer bringing in the products. One day I went to the management of Park ‘n’ Shop and asked if I could supply the toys not knowing where they sold toys in Idumota. Park ‘n’ Shop obliged me and asked me to bring samples. I went back to my in-law’s office to ask colleagues where they sold toys in Idumota. I combed the streets looking for the kind of toys I saw at Park ‘n’ Shop. Then I ran into one shop and they had the replica of what I was looking for. I approached the woman who owned the shop and bought some samples. But I told her that I would return the toys if the supermarket didn’t like the toys and that she would refund me. She agreed. I ran to my in-law’s office and started fixing the price because I already had an idea of what the price range was.  It looked very promising, the profit was good so I went to the Indian man at Park ‘n’ Shop and he was ordering them in dozens. I was like I didn’t even know how to fund these things; I had just some money but it wasn’t enough for the toy business. I went to beg my in-law to stand as a surety and promised to pay the owner of the toys after 30 days and he obliged me. The toy venture became very profitable, so I went into it full-time.

At what point did you decide to register your company?
When I started making profit – I had N500, 000 and I said why buy things from these people in Idumota? They bought from Dubai; So, I travelled to Dubai to the products; I was about 19 years old. While we were flying 37, 000 feet above the sea level I asked my uncle that I was travelling with, ‘Don’t you think I am too young for this trip?’ I bought the toys and brought them to Nigeria. Because toys were very bulky, I had to pay freight charge and customs fees. I supplied everything to Park ‘n’ Shop and it was awesome because now I had a direct import. I was making more profit than before. In fact, after I sold the first shipment, I had about N1.2 million. The next time I went to Dubai, I bought a 20ft container of toys. Thereafter, I bought a 40ft container of toys and in the subsequent one, I had two containers and then we started building funds. We increased our supply to Park ‘n’ Shop; we added Mega Plaza and other shops in Ikeja, Value Mart, and new supermarkets by visiting them with toy samples. One year, my in-law’s partners from China visited Nigeria. They saw what I was doing and said they could get me those toys from China.
I began to travel to Hong Kong with more streams of profit coming in. As to how I registered my company, when I came into the market to sell the products myself I loved the easy life. My in-law’s office was like a first generation bank, where we went to work in tie. We had air-conditioners and there was coffee; just as real office setting. I didn’t like the hard life. However, when I started dealing with the guys in Idumota, things changed. With departmental stores I had luck, I just disposed my goods and nobody owed me. But our goods were priced at very ridiculous rates. I didn’t care because the margin in supply was good. But with the guys in Idumota, that was not the case. I had to look for a shop in Idumota to sell the toys myself. I got a very small counter because the street was cramped. I did not like the place, I kept looking for shops until one man gave me a space and from the small shop we started off selling our toys by ourselves. We started making money because we were now on both ends in the market. That was what gave birth to Auldon Limited; we changed our invoice and informed our customers that our name had been changed.

You started the business after your secondary school education. Did you go back to school to further your education?
When I left secondary school I was good scholar; I had a fantastic WAEC result. But my passion was to be in America to see how I could export my dad’s crafts and make money. I knew African crafts were in demand from the way foreigners were patronising my dad. From junior secondary, my father had introduced me to finance. So I lost interest in school when I came to Lagos. I felt if I worked hard enough the end result would be success. I wasn’t looking at the other side. Everything changed; one day, my uncle called me: ‘Paul, I know you are doing very well now. I can see you are importing things. You are young, but there are two things you need to find out for yourself. You need to choose one: do you want to be a quality man or do you want to be a wealthy man? Any fool can make wealth but not every fool can live a quality life. You need to go back to school, improve yourself and create a window to be able to channel your thoughts because the greatest thing a man can suffer is complex, you need confidence.’ I replied: ‘Sir, I will not just go back to school, you will beg me to stop reading.’  He challenged me not just to stop at first degree but to go for a doctorate degree in business administration. I went to University of Lagos to study Accounting and did masters in Management. I went to Lagos Business School; did an MBA, and went to London Business School to earn a higher diploma. Today, I am doing a doctorate degree in Business Administration at a top business school in the UK with focus on SMEs.

During those times, how did you cope with family responsibilities and academic rigours?
I wasn’t married when I started business. My family only came on board like five years ago. Because I had been used to the circle of business, going back to school and balancing it with the family will always be difficult. But my wife understands that I have to work. When I was single I didn’t go home early, I stayed in the office till 10pm because I wasn’t running to meet anybody at home. Some Sundays I went to work. I had the routine for a long time. Then I met my wife; we fell in love and we decided to have a family and then we have two beautiful daughters.

Why in your opinion do SMEs fail in Nigeria and what advice will you give?
SMEs fail because they don’t pay proper attention. SMEs are not well structured; they give all forms of excuses, just to gamble on little funds, forgetting that not every egg is a bad one. The biggest challenge is not necessarily access to funds; you need to have the moral discipline, integrity capital and desire for success. One doesn’t just wake up and say he wants to start a business because he has failed in a paid employment or has been given the sacked. Business starts from the desire to be successful, like I started off gradually. Most SMEs fail because on their own, they have not done the requisites. Another reason is lack of support from the government; infrastructure is the key – access to funds, low interest rates, policies targeted strictly at SMEs are missing in the scheme of things. Those who make policies in Nigeria hardly sit down with SMEs to know their problems and know how to channel policies that will favour them. These are things that kill SMEs; even the successful ones are bound to struggle when they rely on borrowing from banks that was what almost happened to me. When you are struggling they don’t look at you but when you are making headway they start throwing money at you left, right and centre. Suddenly, the banks are willing to give you global facility, huge money to trade, because all they want to see is their interest. So these are some of the things that make SMEs fail. There are a lot of benefits when you mentor, groom and ensure they grow from one stage to another.

From your experience, what effect does access to foreign exchange have on businesses including SMEs?
It has been terrible. The sad thing is that the cost is passed on to end users. I just check my cost and increase prices of my products because I am never going to buy a dollar at N340 in the parallel market and sell my goods at giveaway prices. In fact, there is a whole lot that the government need to worry about because even if the exchange rate goes to N500 to $1 people must still trade. Every business must find one way or the other just to get them stay in business. The competitive drive is too much and at the end it is injurious and does no one good. Sometimes and for a whole year you find nothing to show for the hard work, and for those who are less fortunate to be in a setup that is not highly competitive, you can actually put your mark up and expect that at worst you might not have the level of turnover you are having.  You can’t project; you can’t plan, where the exchange rate is almost fluctuating at very minimal fraction. You plan and in the next one week it changes and all of a sudden there is a law that says forex restriction, no more dollar deposit. Those are some of the things that choke businesses in Nigeria. It’s like shifting the goalposts in the middle of a football game. This why I said policy somersault is something that kills SMEs because the young man sits and plans from the beginning of the year and every quarter there is a new thing, and in every of these new change there is a new circle and you start afresh and it never stops. Keep somersaulting and at the end of the year, you see yourself just having to adjust to policy change, the time you would have used productively, to engage yourself and plan for the future, you are there trying to adjust to policy. You want to travel out of the country, you can’t withdraw more than $300 dollar daily; some banks can’t even assure you of $1, 000 dollars in one month. These are some of the challenges SMEs face and nobody seems to be talking about them.

How did you come about the Unity Dolls concept?
We sell dolls like, the Barbie, Sofia among others. But as a company we are beginning to understand that we need to start driving value because when you create value money will come, recognition will come because your focus is far beyond what others can see. I have got two daughters; what do they actually pick from these dolls? Toys like Barbie actually manipulate the African girl child and make her look inferior. Every girl wants to be like the doll; everything is artificial. We suddenly forget the royal African beautiful girl.  So we were not happy doing Barbie in black skin, in black colour; our physique is more robust – we should show a true representation of the Nigerian child and that is how we started with the Unity Doll. We started with the three major tribes in Nigeria: Hausa, Igbo, and Yoruba. The idea was that if we make the dolls and sell them to the Nigerian child, the Hausa girl buys; the Igbo girl learns something about Igbo. We have a booklet inside the dolls that tells the girl everything peculiar with this tribe and that is why we named it Unity Girl. We want to see how these kids right from their young age, start knowing one another’s culture and these are some of the social message the doll is trying to create among young girls.

They will learn and pass such knowledge to their own children. It’s like the way the government came up with the idea of unity schools; unity dolls will unite Nigeria, using the three major tribes. We will bring other tribes with time. We are just one year into the project. We felt that the Nigerian child needs to start kitting herself with some basic craft. That is why the dolls have things like beads, so they can learn to make beads. Some of the dolls come with long beautiful hair; through this the girls can learn how to braid. They also have books that teach them moral values – how to be respectful, how to be a good girl and how to live a good life. So they grow up picking these virtues from their first interaction with our dolls. More important, we told ourselves as a company that we needed to start making an impact within the community we operate. Today, our kids learn in shabby environments, to change that, part of the proceeds from Unity Dolls will be set aside for social work – that’s why we are building schools. We have adopted a school in Ikorodu: Salvation Army Primary School. The Lagos State government gave us an award in support of that initiative. We also adopted a school in the North; after that, we’ll go to the East. It is imperative to note that I am an Igbo man but I started the project in the West. Because this is my home; everywhere is home. We are one Nigeria and then my next point of call with Unity Dolls project is the North. Every part of the country must be represented. Every young child wants to identify our dolls, go to supermarkets, drop Barbie and pick Unity Doll. My daughter says, ‘My Aisha, my Ronke, and my Amaka. It’s no longer, ‘My Sophia, my Barbie’, and you see them cuddling these dolls in their black skin – awesome!
Our dolls caught the attention of a South African. He invited us to launch the Malaica Doll in South Africa. We now export the dolls to Ghana, Kenya, Tanzania and Uganda. Malaica is made in Nigeria. Recently, we went into partnership with Lagos State Technical Vocation Education Board (LASTVEB); they are beginning to sew Malaica in their tailoring department and shortly, they will start bringing in clothes for our dolls because we are getting many orders for Malaica. We are preparing for other African countries. We have several thousands of these dolls to cloth. Our vision and mission is to promote Africa all across the globe. We have shops in the UK and the US coming on board; people who hear about our dolls are calling us and want to identify with us. This is the time for Africa to start exporting its richness to the world, not bringing those things with influences that have no bearing on our culture, our identity, our beauty and who we truly are.

Where do you see your enterprise in the next 10 years?
I see Auldon as a global company making African theme toys. We want to start making toys that have African relevance; because there is so much we can show to the world. There is so much we should be proud of and that is why I see Auldon becoming a toy brand that is reputable, notable for African theme products. I want to have a development department that is consistently looking at local relevance that can be infused in any form of toys that we can export. Above all, we want to be a company that uses part of its proceeds to better the community we operate in.