For the Managing Director of Honeywell Flour Mills Plc., Mr. Lanre Jaiyeola, who is passionate about creating growth of sustainable value for stakeholders, he has also been able to build, sustain and improve the tradition of success as MD. Among many factors that set Honeywell on the path of success, Jaiyeola in this interview revealed that by future-proofing the capital value of the business, it will ensure transfer of responsibility, ownership of key business processes and knowledge to the next generation of leadership. Chiamaka Ozulumba brings excerpts:
Congratulations on the success recorded by the company – ₦109.5 billion in revenue for the 2021 financial year, a 36 per cent increase from the previous year – how was this feat achieved despite the pandemic and other issues?
Thank you very much. It was indeed a tough year affecting people’s health and the national economy significantly. Our thoughts go out to all those that have been impacted by the pandemic.
As a major food manufacturer in a critical industry, we were convinced that once our people are safe and motivated, the business would be able to overcome any challenges that the pandemic brought. We implemented a wide range of protocols across all our manufacturing locations to prevent the occurrence and spread of the virus and thankfully, we did not have to shut down any of our locations due to the outbreak.
The peculiarity of the period enabled us to deepen our customer relationships which enhanced our ability to sell and offer competitive trade terms. We pioneered new ways of selling and developed relationships with new customers all over the country across the traditional and modern trades.
This and many other strategic initiatives implemented led to a high single digit volume growth year-on-year. Our B2C category comprising Ball Foods [Semolina, Wheat Meal], Pasta and Noodles delivered a strong performance on the back of 40 per cent-plus growth in Pasta and over 20 per cent growth in the Ball Foods category. The Pasta performance was driven by increased capacity at the Sagamu Pasta factory.
I would particularly like to acknowledge the support of our people, our business partners and our customers. Without their commitment, resilience and contributions, we would not have achieved meaningful results during the period. I am extremely proud to have led the team during these challenging times.
What are the factors you considered to set Honeywell on this path of success?
We worked collaboratively towards the execution of our corporate goals and were guided by a clear strategy that was effectively communicated across business functions. A clear understanding of our strengths relative to the competition and how to maximise them was another key success factor.
We benefit from a highly skilled and engaged workforce, who range from people with years of experience to young, dynamic talents with fresh ideas. Our investments in organic growth and expansion were also central in meeting the expectations of our growing customer base. Our capability to measure market trends and collate customer and consumer insights enabled us to respond with speed to rapid changes occasioned by the pandemic. Lastly, our investment in digital transformation helped us to become data-powered, thus enhancing our insights, speed and execution.
From a consumer perspective, what should be expected from Honeywell Flour Mills in the rest of 2021?
We remain committed to ensuring the supply of high quality and affordable nutritious staple food products to all Nigerians across the country.
We will continue to innovate and renovate our products so that they meet and exceed our customers’ expectations and increase market share. We will also leverage our expertise in research and development to introduce to the market healthier products, tailored to consumers’ tastes, nutritional needs and spending power. One of such products is the Spaghetti Mini, a high-quality single serve product at an affordable price point which we have just recently launched.
What were the major challenges the company experienced, and how are you tackling them for another successful financial year ?
In the period under review, we faced challenges with forex, high prices of manufacturing inputs and COVID-induced disruptions in global trade which affected the sourcing of raw and packaging materials. All this contributed to an increased cost of sales which grew by 41 per cent compared to the previous financial year, against a 36 per cent revenue increase over the same period. This implies that the company did not fully pass on the increase in costs to consumers, instead we looked at alternative ways to shoulder the burden.
Despite these challenges, our revenue grew by 36 per cent, while operating profit grew by 39 per cent. This success is attributable to clear focus, teamwork, improved production capabilities, improved operational efficiencies and cost optimisation.
We will continue to focus on our competitive advantage and improve our product offerings in order to exceed our customers’ expectations, while increasing market share, and delivering value to our shareholders.
What are some of the company’s laudable projects, especially CSR-focused projects that have impacted local communities?
At Honeywell, we are passionate about creating and enabling the growth of sustainable value for all our stakeholders. Our sustainability agenda has two broad objectives – creating a positive impact as a responsible corporate citizen, while minimizing the adverse effects of business operations on the environment. This agenda thus encompasses both Sustainability and Corporate Social responsibility initiatives and is anchored on three pillars: Health & Safety, Education, and the Environment.
Our agenda also aligns with the United Nations‘ Sustainable Development Goals of Zero hunger, Good health and well-being, Quality education and Decent work and economic growth.
In the heat of the global pandemic, Honeywell partnered with both the CaCOVID initiative and a number of State governments by providing food items to their Emergency Food Response programmes and COVID-19 relief packages.
In addition to all this, our Sagamu factory, in Ogun State now directly employs about 450 people with an additional 1,000 indirectly engaged in and around the community.
What are your expectations for Honeywell Flour Mills over the next few years?
In the medium term, we are pursuing category expansion plans based on commercialisation of locally available raw materials for food production. We have identified 5 scalable food categories that will be developed over the next 10 years. These categories have both consumer and industrial food processing applications and provide us with potential for export.
In the longer term, our goal is to be a highly valued foods business with a diverse portfolio of brands and products, and we are determined to be at the forefront of the carbohydrate food industry providing affordable foods to a fast-growing population.
Strategic opportunity exists for the development and commercialisation of modern formats of indigenous carbohydrates. We have already commenced the development of an exciting opportunity in the indigenous tubers category that will significantly broaden our business base and serve as a source to generate forex through export to diaspora consumers.
Do you have any advice for young entrepreneurs in the Nigerian business landscape?
My advice to entrepreneurs and business leaders in Nigeria is to always put the customer first.
Based on identified customer’s needs, they can then fashion out how efficiently to meet those needs. This is what gives them competitive advantage in the market.
In addition, leaders and their teams must be guided by a clear strategy that is well communicated, a common purpose while pursuing corporate goals, and strong organization culture. Historically, this is what we have always been about at Honeywell, and it has served us well through the decades.
Leading a successful company like Honeywell Flour Mills Plc can be demanding. How have you been able to build, sustain and improve the tradition of success as the Managing Director?
I have been working with Honeywell for close to three decades, and in that period, I have learnt that the quality of our people is the true secret of our business success. Therefore, we continue to make deliberate investments in people development and organizational resourcing through the process of retaining, developing, optimizing and properly engaging our 2,000-plus workforce.
We are focused on retaining high performing employees, promoting employee engagement and satisfaction levels, and ensuring the development of employee capabilities and skills to drive achievement of our business goals.
We will remain successful by future-proofing the capital value of the business by ensuring transfer of responsibility, ownership of key business processes and knowledge to the next generation of leadership.
