The chief executive officer, Erisco Foods Limited, Mr. Eric Odinaka Umeofia, in an exclusive interview, reasoned that Nigeria can be self-sufficient in tomato paste production only if the government provides the necessary financial support and other incentives to genuine local manufactures and also stamps out importation of fake products He also shed more light on his recent disagreement with the CBN over forex allocations. Excerpts:
Some people describe you as a controversial person; yet others say you are among the few genuine local investors and a successful businessman. May we meet you sir. Erisco Foods has become a household name today in Nigeria and beyond; when did the company commence operation and where was it operating, prior to its establishment in Lagos?
Erisco Foods Limited is a member of Erisco Bonbet Group, which has been operating in this country for years. We had earlier introduced Erisco Bonpet fire extinguisher and we were frustrated out of the country and as God would have it, we went to Angola and succeeded there. We then came back in 2009 to help and invest in the country in a bigger way since we had made more money, became more experienced and more tenacity to come back into Nigeria.
So we established the tomato paste line to help our people. Our original intention was to source our raw materials from Nigeria and help Nigerian farmers to grow. Our intention was not just about making profit because if that was the case, we are making more money in Angola and the United Arab Emirates (UAE). As we speak, I have more investment in Angola than in Nigeria and our Dubai business is very successful. But we as a company have committed ourselves to helping our nation. We have the urge to think home, that is why we came back.
Some describe me as controversial because I don’t allow them deceive Nigerians; by this I mean some unpatriotic Nigerians and some foreigners. We have better experience in how to better the economy because of our vast experience outside the country. Some people would and can never like me but after a while, they would realise that I actually have good intention for this nation.
Right now, what we are asking the government to do is to give us the same level playing ground. Don’t come and deceive me to invest big amount of money here whereas you give foreigners better services.
If I like easy money, I would have turned my machine to do the same thing as these importers or even worse for my people to eat but I believe it would kill me earlier and also because I have a good Christian background and conscience. I do not want to kill because of money.
Also, because I have sacrificed and invested over $150 million in this factory, for years I stayed in this factory supervising things to ensure this tomato project is going well while my family stayed in Dubai.
If Nigeria spends $1billion to import tomato paste, I have an idea that can help. We are open and determined, and with the belief that President Buhari’s standard of ‘eat what we produce’ is what the entire government agencies would adhere to. But what I am experiencing is not so. Some are greedy and some don’t want to learn. I have advised that government should select some Nigerians and give them targets. For instance, one should focus on vegetable oil, as I have taken up tomato and then insist they make the country self-sufficient. I can make this country a major exporter of tomato paste by 2017 if I am given the right support. It is not just me playing in this space so imagine the impact we would have. However, now the government has left the economy open without control and scrutiny.
I have been in Angola doing business and they do constant checks. If you don’t adhere to their rules, they would jail you. They have sent away about 21 Indian companies for not paying taxes and other illegal activities, but they do these illegal things freely here in Nigeria.
What these foreigners and importers are doing is to import sub-standard products into Nigeria. They import tomato mixed with starch and chemicals into our country.
Are you saying they are still importing substandard tomato paste?
We don’t need to deceive ourselves; there are more in the market.
There are agencies that regulate foods we consume here. You have mentioned in the past that NAFDAC is one of the agencies that aiding these foreigners that import harmful tomato paste into Nigeria. What is the role does the Standards organisation of Nigeria (SON) play in all of these?
I believe SON monitors what is being produced here to make sure it meets international standard. This is what I have been told. But I know SON has power to stop all the fake products coming in while National Agency for Food, Drug Administration and Control (NAFDAC) focuses on food.
NAFDAC’s role should be reorganised because and the agency doesn’t want to perform its duties.
I have come in contact with some of these importers who have complained that you are just de-marketing them because you want to have a lion share of the market.
The Nigeria market is big. What I have been campaigning about from day one is that we should have the same level playing ground to produce goods here. It is cheaper for us to produce here and safeguard the economy than for us to import poison to kill our people. I have made publications on newspaper inviting them to come so we can deliberate on how to move this sector forward.
Or rather, if what I’m saying is not okay, let us go to television to argue it. They said Nigeria tomato cannot be produce here but I have done it.
Also when there were talks about banning tomato paste into the country, six foreign companies approached me to do a joint venture but once they discovered they could still import and smuggle it into the country, they reversed their stand.
They said I want monopoly. Now I don’t want monopoly again because I want to take my factory outside the country; let us see if I would not be the biggest importer. I would import more than all of them put together. Just watch in nine months’ time.
There is this allegation that your company imports that most of the materials you use for the tomato production. Please clarify?
In tomato business, there are items like tin. If I ask anyone to finance it, they would run away. To do the tin alone is about $150 million project so I import it. Is it not better to import 20 per cent of your materials than 100percent finished product?
Are you then saying you do not import the Tomato concentrate?
I would take you to our factory and warehouse to see things for yourself after that I have spent over N4billion buying off tomato from farmers in the north. Those saying I import concentrate use that to cover their own illegalities. I challenge CBN to bring out documents because if I have imported, it must have gone through the bank for Form M. I don’t do anything illegal. As we speak, I have over N13billion worth of raw materials in my warehouse and N6billion worth of goods in my store.
Recently you said the CBN is frustrating your business by not granting you FX. The CBN argues that it no longer gives out FX and that manufactures should approach their bank. What really is the crux of the problem?
The CBN approves form ‘M’ for any amount that is approved for foreign exchange. It also banned 41 items from accessing FX, yet some banks are giving the importers FX steadily and their Managing Directors have not been fired. It is the CBN that is giving out the FX. Don’t mind them, they are just deceiving us. One day, $15 million was given to an Indian man at N280 to $1 and I am buying at black market at the rate of N470 to a $1; it is inhuman and no one can survive under this situation.
Is it not unfair to accuse the CBN of frustrating your business giving that in the past you had been granted some loans?
CBN gave me only N3billion.
We also learnt that you do not service your account?
Let them bring the accounts I do not service let us see. I was bringing in money from overseas to service my account but this month I said no. unless I am supported by CBN before I can service my account. I have lost N3.6 billion already and nobody is listening. My bankers are Stanbic IBTC and Keystone, go to them and ask.
How much have you collected so far from the CBN and why is this outcry against the apex bank?
All I received was N3billion and I want to tell you that some foreign companies get up to N8 billion in different names. So if I am given N3 billion from an investment of N45billion it does not go far. For example, if an aircraft is $10 million and you give me $100,000, do I cut the aircraft into 10 parts. I would move out of this country and my move would make this country change. I came here to help and create jobs for Nigerians and not to make money for myself, I am a contented with what I have.
Some days ago, CBN introduced an intervention fund for manufacturers and airline. Are you going to benefit from it?
That is another big hoax. But I believe what we are saying has affected this decision by them. Last Friday, I received a letter by 10.29am requesting us to bring in all request for FX and it must be submitted to the bank before 12 noon. They said what they want to clear all bills pending in CBN.
They gave us a circular at 10.29am and the bank said you must submit before 12noon and by then they had informed the foreigners maybe two week ago and whereas we were very short notice. They had opened the door for 2 hours and closed it back because people have already entered. I didn’t get any Kobo from what they said. It is still the same economic ‘Abakadabra’ (hoax). Most Nigerian businessmen are committed to banks one way or the other or to government, so they don’t want to talk; they don’t want trouble to themselves. For me, I have no reason why I should not be supported as a Nigerian.
In 25years from now, no tomato company would succeed here if we still condone importing. If I produce outside the country, I would produce at half the price. My factory here can build me 10 of this factory overseas with just 10percent contribution which means I can make 10 times profit.
I have finished setting up my factory before CBN knew I was existing. I brought in CBN just as running cost.
Recently, they had promised manufactures 60percent in the past and on the papers today, and the Manufacturers Association of Nigeria (MAN) said that the money didn’t get to anyone. How can an institution like that be deceiving people? The money businessmen have overseas is much compared to what Nigeria as a country is going around asking as a loan. If they make manufacturing a viable business, we would be clamouring on each other to develop here. To change this is simple; it would take government’s determination and policies.
Why do you think government agencies prefer to favour the foreigners?
Corruption! Like this import cabal I always talk about, How can the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, after several letters, refused us an audience and this same minster easily grants Indians audience.
We want foreigners to come into Nigeria and I strongly believe they favour them due to the incentives they get from them.
How much have you invested in Nigeria so far?
I have invested $150 million. Now in Katsina where I intended to do a bigger investment, CBN refused to support me. This factory here in Lagos, I have two and half bigger the size in Angola. I have a bigger business in UAE, yet I decided to come to my country to be loyal and now my country is suffocating me. Before they succeed in suffocating me, I must succeed in exiting. If I cannot be allowed to succeed in my country, I don’t need to be here.
My intention was to revolutionise farming in Nigeria. We have a new seed that can yield 90 metric tons per hectare in Katsina. We have a new basket for transporting waste. We have a system to produce with Nigerian tomato. All these we have the capacity but nobody cares to listen.
You are talking tough about exiting, don’t you think there should be some sort of dialogue with government. Have you approached the presidency, have you made your intentions known to his office?
I have notified them, but till now, the Minster of Labour, who is in charge of creating jobs has never asked what is happening. The Governor of Lagos state here has not said anything. So far, only the Katsina state governor told me he would support Nigerian companies equally just as they would support foreigners. That is a good, the same as the speaker of the House of Representatives.
The issue is that I am not closing my company; I am going to where I am going to make more profit since my country has refused to support me.
In specific terms, what are your demands? How much grant do you need to thrive in this business?
To make tomato industry to be self-sufficient in this country, government has to spend a minimum of between $100 million and $150 million every year for three years and this will to end these importations. I am not asking that it comes directly to me; I am suggesting this aggressive approach to save this country from importing this product with over $1 billion yearly. We cannot continue to import what we have (tomato) to the tune of $1 billion yearly and this figure would continue to increase over time.
Please understand that we already have tomato but we need this investment for us to process because we have tomato that is wasting and we would be self-sufficient with the necessary support from the government.
With what Erisco foods has, we would need only $50million to meet our production process. But we are not just talking about funds, if tomato paste importation is not banned, this sector cannot grow.
If Nigeria can invest $300 million in processing in strategic places in the north, which is about 6 lines, tomato would be wasting.
There is enough for everyone to benefit from in this business. There is tomato farming, tomato processing and there is tomato packaging. The money I’m talking about is for processing and part for packaging.
This $50 you are talking about, are you saying they should give you immediately or in tranches?
I have sent an application already which they rejected. I had asked for N7 billion only to make a lot of impact. The issue is that if you don’t have a bigger production capacity, you can succeed. With this amount, we can crash the price comparing with the Chinese importers. If we succeed in crashing the price, they would find out that it is cheaper here and they would have no choice but to run away. If I keep producing higher, how can I sell? That is the issue.
I have other businesses I am doing, I do not complain about them. I have garri milk and sugar, milk cubes, seasoning etc. My initial target was to employ over 50,000 people.
Now that the system is encouraging importation, I would help them import. I must also clarify that I believe in President Buhari, but however some MDA’s are not sharing his vision.
Sir are really bent on leaving?
I most leave, only President Buahri can stop me.
If you are given this $50 million would you still leave?
Maybe I would reconsider my stand, but tomato paste importation has to be banned.
On a lighter note, what informes your code- suit made with ankara (Nigerian made ) fabric? Some say it is eye service
If that is what they say, Nigeria needs eye service to succeed. When IMF’s Christine Largarde came to Nigeria, she commended me for dressing like a true Nigerian and even took pictures with me. I have been promoting made in Nigeria products.
I wear these ankara suits anywhere I go to and they appreciate me. (He laughs) if that is eye service I want the person to please join me in the eye service.
