Olatunji Lawal, is Managing Director, Toons Consolidated Limited; a company that export hibiscus flowers, dry-split ginger and some other Agro ccommodities from Nigeria. In this interview, he speaks with Medinat Kanabe about his business, how government financial policy affects exporters amongst others.
What propelled you into export business?
Export business occurred to me at a time that Nigeria was integrating into internet. I was into web design and I was doing it for some companies, as it was a trend. In achieving that, I got some of my materials from the internet. It was a time when if you have to browse, it was about N1, 500 per hour and it was done at Ikeja. I would leave Ojota for Ikeja to browse trying to get information for my web development. While doing the web development, I came across certain things on the internet like product being sold and then I came across AliBaba. That was when Alibaba.com just started. I discovered products being sold from one place to the other then I met an Indian man, Sartin online who taught me about export.
He asked me if I could get some items from Nigeria for them which was dry split ginger; I never knew what it, so I met a friend in Kano who was also interested in export and I checked as well; this guy was also a broker who was teaching me to be a broker and an exporter at the same time. I didn’t have the money at that time, so I met some people and bankers and got a loan to fund one shipment and, hence I started getting glimpse of how to go into export.
I had to drop website development to fully focus on export. I was the first person to export cocoa shell from Nigeria to China, from Ebun Cocoa Industries in Ogba. It was huge but with time and when everybody got to know about the business, people started to jump into it. I eased out of the business and started to export Charcoal and with the experience and the fact that I could talk to people from my experience, things were just going on well.
When did you start exporting hibiscus?
The only African country exporting hibiscus was Sudan, when Nigeria came in; I was one of the first people to export hibiscus from Nigeria. People would see my product in Europe and they will ask if it is from Nigeria, if I say yes, they will say no, maybe I bought it from Sudan and I will convince them that it is from Nigeria. They didn’t want to believe that we can produce hibiscus in Nigeria until they started receiving it and even found out that the taste is different from the hibiscus whose origin is Sudan.
Nigerian hibiscus tastes better because, it has a raspberry, strawberry kind of taste but some other countries’ hibiscus have sour taste. And it is easily acceptable to a blend of different fruits when you want to play with the taste.
What other products do you export?
We export hibiscus flower and dry split, but we are open to others just that over the years we have come to realise that it is good for one to be specialised in one business so that you can be focused on the development of the product in terms of quality, quantity, pricing and most importantly delivery. This is why we are focused on these two products. For close to 20 years we have been in the business and we can say that we are one of the most successful exporters of hibiscus flower in Nigeria.
What part of the hibiscus do you export?
We export the flowers alone. The flower is basically used for the local drink which is called Zobo and abroad it is also used for the same purpose and largely consumed in the Latin America countries, USA, and Europe because of the health benefits, it is in high demand in these countries.
There are various species of hibiscus, which are the dark-red hibiscus, the light-red hibiscus, the white hibiscus and some others, but that which is mostly in high demand is the dark-red and light-red hibiscus because it gives the colouring.
What is the process of getting hibiscus from the farm to the consumers?
Hibiscus is usually planted in the month of May /June and harvested during the months of September/October/November, depending on the output from the harvest. It is mainly planted in Jigawa, Kano, Bauchi, Sokoto, Maiduguri and Yobe State. In the old days, farmers in these areas planted hibiscus as boundary product; it was used to demarcate one farm from the other; at that time, demand was not high but when demand increased they started growing it as a main produce.
When it is harvested in any of these months it is dried naturally under the sun because of the temperature situation in the northern part of the country. This is one of the reasons why it is preferred planted in the north and not in the south. That does not mean that it cannot grow in the south but the condition to process it is not good enough in the south.
The dried produce is thereafter packed in bags; it is harvested with the seed, the stick, and the stock which are removed as much as possible when it is dried. Having done this, it still comes out as a raw product which is not exportable at that stage, so every farmer move whatever quantity they have to Kano.
Kano is the main commercial area for the hibiscus. There are middlemen who get the product from farmers, if they cannot get to Kano town with their produce.
Some farmers have 10 bags, 6 bags, 3 bags and they cannot travel with such small amount, so somebody comes to collect from everyone and then take it to Kano to sell to the suppliers. These suppliers, however supply to the exporters, who process these bulk hibiscus which are raw, dry but not cleaned into export ready. They take it to the next level which is to clean it to become an export ready product.
However, there is a catch here; the suppliers can only clean to the level to which they understand to be export ready; as an exporter, it is your responsibility to check those goods whether they are export ready or not, it your responsibility to take it to the level where you will not have any problem with the export.
So the suppliers sell to exporters, they in turn move it to Lagos where it is containerised and sent off to the port and goes to the export processing and documentation and all of that, and hence, leaves the shores of Nigeria.
Do you have farms?
We don’t have farms anywhere yet, we have to look into the nearest future for such plans. We will then have to synergise with some farmers to help them grow in term of quality and standard that will be generally acceptable right from the farm.
The world is all about the Goods Agricultural Process, (GAB), and we have to key into it, as it comes right from the farm to the process of export.
How does government policy affect hibiscus flower exporters?
In the past, it had to do with financial policies, which was predominantly the problem of not being able to access forex at the official bank rate lower than the black market rate. It was really tough for us, but we were able to survive and we are grateful to the CBN governor who eventually changed the policy in such a way that exporters are now able to get appreciable values for their in-flows. This was favourable for us as we do not pay VAT as exporters. We do our due diligence of paying tax and staff and every other thing.
So on that basis, the government support has been there. Also, exporters are open to the Exporters Expansion Grant, EEG, where if you export with documented export and in the right way and manner and officially as recommended by CBN and the policies, you get some grants from the government.
Basically, these past few years we have enjoyed support from the financial policies.
What is the estimated volume of revenue that Nigeria can generate from the export of hibiscus?
Nigeria can make so much billions from hibiscus flowers but a lot can be done. Export is a good business but you need to do the right thing to make it work for you. It is not all about taking the goods from here and just shipping it saying I have done business. There are some needful that has to be done. We have been shipping but we were not too concerned about quality, but now the world is about what comes out from every country.
As you know, Nigeria was banned by Mexico; it was an issue of quality. We are having issues of quality all around the world that the Nigeria Agricultural Quarantine Services, (NAQS), are also trying to deal with it.
We need to know that export is not an all comers affair; have the right experience and if you don’t follow the right procedure you will not succeed.
Everybody want to be an exporter to make money but how and why is something I mentioned to the Nigerian Export Promotion Council, that everybody comes to get an export certificate from you; do you really check if they are ready to be exporters?
They need to be tested and asked questions about the products, risks and find out if they know anything about the export business. Are you ready to do the needful?
Have you ever been swindled?
I am not sure there is anyone that has not been swindled before. Sometimes after you deliver the goods, they call you to say that the quality is bad and they cannot pay the agreed amount because they know that you will not say they should return it. They know that the cost of bringing it back will not be beneficial to you so they use it against you and if you refuse, he will go to another person and do the same thing.
That is the essence of having an association because with time people will be able to exchange such names of such unscrupulous buyers and the association can also get across to international bodies to deal with such clients.
How can we increase the quantity of hibiscus flower we export?
The farmers need to have confidence. There need to be a link between the farmers, the suppliers and the exporters. They need to have the confidence that they will sell the good that they produce. When you have such confidence that you can sell, you will plant more.
If I go to the farm with confidence that I will sell, I will plant more. But the farmer does not have so much advantage as the suppliers and exporters in terms of value that is why I say if along the line, there is sync between the three of them; they will begin to get better value for their products.
When did you start the business?
My company Toons Consolidated Limited was registered in 2004 but I had already started the export business long before then. I was into the export of Cocoa shell, and charcoal, sesame seeds, raw cashew nuts, and some other products before I decided to focus on these two other products.
What business where you into before then?
I graduated in 1990 from The Ogun state University, I served and came back but my father had died in 1985 leaving his nail manufacturing company shut down. After my graduation I opened the company up again because I had the experience since I was working with him in both the production and administrative departments before he died.
This is one of the reasons I studied business administration. My father’s company was one of the top most companies producing roofing nails in Nigeria then, but ours was more or less a family business so as my younger ones were growing up, they also came into the business so at a point I decided to leave the business and pursue my own dream which brought me here.
What are the measures that have been put in place to avoid rejection of our produce in other countries?
Like the issue we had with Mexico, they gave us a procedure that we have to follow for us to be able to break back into their market; the procedures may have been a bit difficult from the onset, but we had to cope and along the line it paid off.