SOFT FINANCE
The story of Cutix Plc is a very fascinating one for many reasons. In 1991 when I started covering the stock market, Cutix was one of the over 10 indigenous companies listed in the second-tier section of the Nigerian Stock Exchange to showcase what was possible. Several years down the line, while many of its classmates have exited the market for various reasons, Cutix has not only stayed on, it has since graduated into the first-tier segment where it has continued to create a banquet of prosperity for its stakeholders. Consider these stats for instance. For a new baby who had invested N1,040 in the company 35 years ago, his investment would have grown to N1.93million today. For a Youth Corps member who had invested N5,200 the same 35 years ago, his investment would have appreciated to the value of N9.63milliom today; and a businessman who had invested N520,000 in Cutix 35 years ago who has had the investment appreciated to the tune of N962.5million today.
In this piece, Vanessa Obioha captures how the indigenous cable manufacturing company Cutix overcame different economic downturns to retain its enviable spot on the Nigerian Stock Exchange.
Forty years ago, when Engr. Ajulu Uzodike left his paid job to set up an indigenous electrical cables manufacturing company which became Cutix Plc, part of his shared vision was to create a commonwealth for Nigerians. While he is still striving to make that a reality, Uzodike has a lot to thump his chest for. Given the economic downturns that have riddled the country from the military regime, when Cutix was established, to the present democratic dispensation, what the elderly Uzodike has done is exceptional. With an infectious sense of humour, he has successfully kept his company running and recorded fantastic figures in the Nigerian Stock Exchange.
The company — which manufactures and supplies house wiring cables, aluminium conductors (AAC), copper conductors, aluminium service cables, automotive cables, appliance cables, low voltage power cables, and solar cables — is proud to be the first indigenous company to migrate to the main tier securities market from the second-tier securities market.
Although Cutix’s start-up capital after private placement by 18 shareholders in mid-1983 was N400,000, the company was valued at N8.595 billion as of April 30, 2022. More so, its annual profit before tax has increased consistently over the years such that an N10,000 investment in Cutix in 1983 is worth N89.1million as of October 31, 2022.
Curtix has received many awards and certifications over the years, such as the International Standards of Excellence award for best world-class cable manufacturing company by the World Quality Alliance. It is indeed a distinguished exemplar of a Nigerian success story, considering that most of its competitors at the time of establishment have sailed into oblivion.
If you ask the elderly Uzodike or the Chairman, Okwudili Nwosu, who joined the company from inception as a project manager what the winning formula is, you will get a uniform answer: the charter.
“We have remained committed to the charter, and we try as much as possible to keep to the tenets,” said Nwosu.
By tenets, he meant the company’s mission to be a very profitable, fast-growing, high-quality, ethical, and socially responsive company. It also set out to rapidly exploit emerging technologies and capabilities in product improvement and diversification, use mainly Nigerian manpower and local resources, and use chiefly internally-generated funds to grow and provide returns fairly to all stakeholders.
By adhering to these values, Cutix’s reputation continues to grow beyond expectation, recording not only increasing revenues but retaining an enviable reputation in the capital market space.
Therefore, as it neared 40 years of existence, the company rolled out a two-year plan to mark this milestone at a private dinner recently.
To be sure, the company was incorporated on November 4, 1982, but as Nwosu explained, the company originally started operations in 1984.
“From incorporation to the beginning of commercial production was approximately two years. So we want to remember when the company was born, which was on November 4, 1982, and then link it to the commercial production, which was in May 1984. So, we are going to go through the period from the birth of the company, which is the incorporation to the actual viability and commercial nature of the company. Because by the time the company was incorporated in 1982, we had not fully started operations. We were just getting approvals, bringing in the machine and training staff.”
The company started production with one extrusion line in 1984 and has been in continuous production with the capacity to produce various cable and wire products. A second line was added in 1985, and by 1986, it added several wire-processing lines to achieve integration that was at par with other local and international leading cable makers.
A recurring statement made by all at the dinner was the Nigerianness of the company. As Nwosu noted during his welcome address, the company believes in “local value addition” and only looks outside the company when there is no other option. Cutix has 100 per cent Nigerian workforce and engineers from inception and has achieved laudable quality standards.
“The company uses her technical team for the design of tools, installation of imported machines, training and troubleshooting of technical problems and all other functions performed by the company. We have designed and assembled some of our manufacturing equipment lines to complement the earlier imported version to increase the local technology content.”
Apart from its utilisation of local talent and resources, the company has positioned itself as an inclusive organisation, having a female Mrs Ijeoma Oduonye as the Chief Executive Director.
A beaming Uzodike disclosed that from the company’s calculation, it sits proudly at the top position on NSE.
“Some of my vision has been achieved,” he continued. “At least, I have proven that Nigerians can get together and do something successfully in terms of returns to investors. We are the only ones doing what we are doing. A fully Nigerian company that has been able to survive all the problems in Nigeria, and even can celebrate it.”
As much as Cutix is a towering iroko tree in its field, it gives the founder Uzodike no pleasure to see other indigenous companies in the history books. He passionately talked about the need for a national commonwealth in Nigeria which is tied to the theme of the 40th celebration: ’40 Years of Striving for a Commonwealth’.
“A tree does not make a forest. If we were so many in Nigeria, we wouldn’t be talking about insecurity and so many things. That’s what makes me sad that after 40 years of labouring to make this country better, we haven’t been able to do it because we’re alone. All the other companies that started with us are no longer in existence.”
For Nwosu, it is a matter of selfishness.
“A lot of people are selfish. If you have a company, why do you want to keep all the powers to yourself? The more you decentralise, the greater the efficiency and the greater the survivability of the company.”
He continued: “When we started this company, we were looking at a time when none of the people who started it may still be alive but the company will continue like many multinationals. Those who started the company are on their way out. Many of the private placement shareholders are dead.
“So, we need to have the heirs of these shareholders remain committed to the ideals and the only way they will remain committed to the ideals is if somebody is constantly enunciating those ideals so that they are not forgotten.”
Despite the increasing revenues of the company, Nwosu pointed out that the continual depreciation of the Naira has affected the business.
“It has affected us very badly because you can’t buy anything. You buy something today and tomorrow it has increased by 10 per cent. How do you bargain? So, you cannot plan and once you are unable to plan, that uncertainty is very bad for business.”
The 40th celebration of the company comes with a new logo that reflects the company’s resilience and commitment over the years. On November 4, the company was at the NSE to ring the bell and explain the facts behind their outstanding figures in the past few years. Nwosu hinted that there will be new product rollouts as well as the vision of the company in the next decade.
While rounding off her presentation last Friday at the company’s facts behind the figure event, the managing director made a very bold assertion: “Cutix has proven to be the best-kept secret stock of the market-A must-have in every investment portfolio”. Interestingly, all the stockbrokers at the event who spoke believed that the managing director was stating the obvious.
QUOTE
If you ask the elderly Uzodike or the Chairman, Okwudili Nwosu, who joined the company from inception as a project manager what the winning formula is, you will get a uniform answer: the charter.
ME AND MY MONEY
YEMISI SHYLON
INVEST IN EDUCATING YOURSELF
When you spend money to invest in educating yourself, you move ahead of the pack who do not believe in this because the more you know, the deeper you see. Spend time reading and educating yourself. Aspire to know more about what you are getting involved in. I decided to become a chartered stockbroker because I was investing in shares. I knew it was going to be a large part of my investment portfolio in the future and my stockbroking knowledge has helped me a lot.
Also, I decided to study law because I was thinking about old age and the fact that I was going to be involved in a lot of properties, I don’t want to be paying lawyers. Today, when I sign agreements, I take advantage of being a lawyer. I don’t go to court, but I am servicing myself and my family. You must develop yourself personally. For instance, I am not an artist, but I have learnt a lot about artistry. I spend time learning what I do.
