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  • AMCON: Killer or restorer of businesses? II

    AMCON: Killer or restorer of businesses? II

    The Asset Management Corporation of Nigeria (AMCON) means different  things to business owners. To banks, where the corporation bought over 13, 000 bad loans worth of N5.6 trillion, it is a restorer of hope. But, to recalcitrant debtors, whose bad loans were purchased, AMCON is a nightmare and a killer-pill. However, the corporation insists its mission is not to kill but to revive businesses  and make them irresistible to new investors, writes COLLINS NWEZE.

    So, selling is difficult because the economy is challenged. The time of recession is not the right time to sell because when you sell, you may not get the value of your assets,” he disclosed.
    The AMCON said it has plans to sell its majority stake in Peugeot Automobile Nigeria (PAN) Limited, a local joint venture with the major French automaker. Bids are being invited from investors.
    Peugeot Citroen is the technical partner to the Nigerian assembly plant, which has capacity to assemble 240 cars a day, PAN said on its website.
    The AMCON said it owned 79.3 per cent of PAN Nigeria Limited, having acquired the stake five years ago after purchasing the company’s debt and taking some as equity. PAN Nigeria Limited was set up in 1972 as a joint venture between the Federal Government and France’s Peugeot, with an annual production of 90,000 cars by the 1980s.
    But operations nosedived and the company accumulated bad loans shortly after the government sold its stake via a privatisation to core indgenous investors in 2006.
    On Multi-Trex, Nwauzor said: “If you go to Multi-Trex today, you will weep because of the bad management of the company. The place was mismanged. A Nigerian takes a loan and the first thing he does is to buy big cars. The cash for the cars is supposed to come from your profit and not taken out from the borrowed funds. Also, in the banking industry, insider loan dealing is a big problem because branch managers sometimes get five per cent of the loans. A lot of the loans went bad from day one because of insider dealings”.
    According to him, the corporation took over some of the companies as dead entities, hence the need to shop for strategic investors with long-term interest.
    He said: “AMCON did not go to Multi-Trex and say they wanted to take over. It was the loan the company borroed from a bank that AMCON bought. Now, we are trying to get the right investors and right management to run the place. No matter how much investment you make, if you do not have the right people to run the businesses, you will end up not making progress.”
    Nwauzor confirmed Tinapa Resort as the investment of Cross River State under the administration of former Governor Donald Duke, noting that Governor Ben Ayade has shown interest to ensure that the business run successfully.
    His words: “The idea was to recreate a mini Dubai in that place. We also want to see how we can attract the right investors. Some of the assets there are at the level of investment that you keep maintaining so that when an investor comes, he will not meet rotten assets. That is why Nigerians should appreciate what AMCON is doing.
    “We appoint receiver-managers to oversee any asset that we take over. We make sure it is working. There are machines you need to grease everyday. So, the assets you want to sell must be in good order. We must provide police security, and keep the companies working. If you notice, at the middle of last year, we appointed Asset Management Partners to go after loans of N100 million and below. They are working tremendously. We then face the big ticket assets to tidy up before our time is up.”
    The oil and gas industry, he said, is facing huge challenges. “The two oil rigs with us are not producing but we have to maintain them. But the cost of maintaining the rigs is heavy and if you do not maintain the rigs, they will go bad. The money are with Nigerians still doing businesses in other names but have refused to pay,” he said.
    He said that last year, the Federal Government set up inter-agency committee on AMCON to help debt recovery. The idea was to round the debtors up and ensure they do not escape. The idea is to zero in on recalcitrant debtors.
    “For SilverBird Group, the receiver manager is there and managing the place. AMCON does not want to kill any business. If you take over SilverBird Group and shut it down, the unemployment level will rise. If we revive the companies, millions of jobs will be created. You cannot sell Aero Contractors and make that money, but if you run it for five years or more, you will make your money,” he stated.
    The Chairman of Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Ibrahim, said that plans are underway in the Senate to strengthen AMCON’s debt recovery capacity.
    Speaking on the theme: “Economic Rebuilding through Eligible Assets Recovery”, the committee cahir that time would soon run out on bad debtors to AMCON.
    Ibrahim praised the new debt recovery drive by the corporation, adding that the legislators remain committed to help in the stabilisation of the economy.
    He, however, noted that his committee must collaborated with key government agencies like AMCON, which carries a huge burden on behalf of the Federal Government to achieve the set objective.
    Ibrahim said the Senate will no longer fold its arm and watch the economy destroyed by a few individuals indebted to the corporation to the tune of billions of naira.
    “We can all attest to the renewed drive towards a more focused and enhanced assets recovery and the management approach under the new dispensation as evidenced by AMCON’s strides in recovering eligible assets from debtors. This underscores the corporation’s importance in the nation’s economic rebuilding effort. AMCON, since its establishment, has been a key stabilising and revitalising force in the Nigerian financial system and requires vital support from the legislature to achieve its statutory objectives,” he said.

    AMCON’s leadership

    After Kuru’s appointment as AMCON chief on August, 2015, succeeding Mustapha Chike-Obi as its pioneer Chief Executive Officer (CEO), he promised transparency in the sale of acquired assets and insisted on organising conducting open and competitive bidding processes.
    “If you recall, what used to happen in AMCON was private disposal of assets. We have changed the whole policy. There is no longer private disposal of assets in AMCON. So, there will be no hanky-panky or secret deals in the disposal of our assets,” he promised.
    Currently, a lot of specialised assets are waiting to be disposed, but disposing them at the prices they were bought is already a big challenge for the corporation. But many times, the assets could be re-valued based on discretion.
    With the price of crude oil falling below $60 per barrel, AMCON’s ability to meet its debt obligations has also worsened. The drop in oil prices has reduced government’s ability to honour even its own commitment to some of the AMCON’s papers or bond holders. Secondly, because of the low prices of crude oil has affected turnaround in the economy, the economic activity of some of the businesses indebted to AMCON has been been weakened and its ability to repay challenged.
    Besides, the impairment of assets is also affecting the prices of the assets that the corporation is holding. If we have an oil tank farm that was worth $50.1 billion a year ago, and one wants to buy it today, obviously it reflects the price of crude today.
    Before AMCON was created, NPLs (Non-Performing Loans) rates were over 35 per cent, but today, they have fallen below 13 per cent after the corporation bought over 13,000 bad debts from banks. The poor NPLs rates were caused by insider-loan abuses and poor structured loans, among other factors.
    The corporation has not only stopped further purchase of bad loans. It is trying to change its strategy from proving financial stability to recovering bad loans and consolidating its financial obligations.
    Kuru believes that AMCON’s primary responsibility is not to take over businesses of debtors, but to support them.
    He said: “If you see AMCON taking over any business, that means there is a problem with that business. Quite a lot of companies are operating but operating at a loss and you cannot continue to operate at a loss when you have obligations and cannot meet the such obligations then we will be forced to act.”
    Kuru has urged strategic investors with long term interest in the economy that the right time to invest in the country is now, despite the slight challenges.
    Kuru said: “AMCON is inundated with proposals from different investors with differs interests in the economy. Nigeria remains a growing and promising economy as far as investment opportunities are concerned but, it has to be for businesses and business owners that have long-term interest in Nigeria.
    “Any investor without these characteristics may be overwhelmed as a result of the present situation of the economy, which is temporary to say the least. So, as far as I am concerned, the present economic challenge is actually the right time to invest in Nigeria; a time to lay a solid foundation and then grow with the economy in no distant time.”
    According to him, AMCON will continue to sustain its tempo of recoveries, which began last year by strategically focusing on value enhanced exits of its portfolios, which encompasses continued negotiations and resolution of loans through cash recoveries, asset forfeitures through negotiation or enforcement; capital restructuring for short to mid-term exits as well as joint venture arrangements for asset operations and land development.
    He assured that AMCON will also explore the creation of a robust Real Estate Investment Trust Scheme (REITS) to provide a market-driven exit for AMCON’s real estate assets as well as additional capital market instruments for institutional investors such as the Pension Fund Administrators (PFAs) and other interested parties. With these opportunities, Kuru said AMCON has a bouquet of attractive assets for different investors – locally and internationally.
    Speaking at a three-day retreat organised by the Senate Committee on Banking, Insurance and other Financial Institutions in Uyo, Akwa Ibom State, Kuru said the corporation needs the support and partnership of the Senate given the high level of frustration it was getting from the debtors.
    He said: “After more than six years of operation, all efforts to recover the loans diligently have failed. We now have to resort to the Act setting up AMCON by resorting to the courts. Let me be quick to add here that AMCON is not trying to unduly prejudice the views or positions of stakeholders, especially the judiciary,” he stated.
    “AMCON remains a law abiding organisation with respect for the rule of law. However, our campaign is intended to draw attention to the enormity of the challenges and potential threats, which the bad loans in our portfolio pose to the wider economy and the common man. We are mindful of time as AMCON has a very short lifespan. Our sunset date of 2023 is drawing nearer each day. In fact, other similar institutions around the world, like Malaysia have wound up their recovery vehicles. They are now focused on managing or turning around the assets taken over during the recovery phase”.
    By 2023, AMCON will cease to exist in line with the 10-year mandate given to it by the Act establishing it. However, the challenge is who will inherit the corporation’s unresolved assets if the corporation failed to achieve its mandate of resuscitating ailing businesses? These and many more are puzzles that only time will solve.

  • AMCON : Killer or restorer of businesses? (I)

    AMCON : Killer or restorer of businesses? (I)

    The Asset Management Corporation of Nigeria (AMCON) means different  things to business owners. To banks, where the corporation bought over 13, 000 bad loans worth of N5.6 trillion, it is a restorer of hope. But, to recalcitrant debtors, whose bad loans were purchased, AMCON is a nightmare and a killer-pill. However, the corporation insists its mission is not to kill but to revive businesses  and make them irresistible to new investors, writes COLLINS NWEZE.

    With 13,000 businesses under its watch, the Asset Management Corporation of Nigeria (AMCON) should trail the Nigerian National Petroleum Corporation (NNPC) as one of the richest parastatals in the country.
    Ironically, as the NNPC swims in wealth, the AMCON, with over 13,000 accounts valued at N5.6 trillion consist mainly of moribund companies. The companies, waiting for elusive investors, have little or no prospect of survival.
    Some 400 obligors account for more than N4.5 trillion of AMCON’s N5.6 trillion loan profile (about 80 per cent of the corporation’s debt portfolio). Since its establishment in July 2010 to stablise the financial system by efficiently resolving the Non-Performing Loans (NPLs) assets of banks, AMCON has been on the hot seat. The companies under its watch accuse it of forcing killer-pills down their throats, or planning their total liquidation. AMCON’s Chief Executive Officer, Ahmed kuru, however dismissed the allegation as unfounded.
    The AMCON chief describes the corporation as one of the best things to happen to economy. To him, AMCON has not only stabilised the financial sector through its debt purchase scheme, it has offered fresh funds to rescuciate many of the ailing lenders.
    The takeover of the three bridged banks – Mainstreet, Enterprise and Keystone prevented the depositors from losing their savings. The corporation’s intervention saved thousands of jobs that would have been lost to the closure of the institutions. The AMCON has sold two of the banks to new managers and Keystone’s sale plan is ongoing. Kuru believes that the recovery of bad debts and revival of huge businesses under AMCON’s control will boost the local economy and create millions of jobs.
    Besides, a debtors’ list obtained from AMCON showed the top debtors as at December 2016, led by Rockson Engineering Company Limited with its N105 billion debt portfolio; Capital Oil-Gas Industries Limited (N102.4 billion); MRS Holdings Limited (N83.8 billion); Dansa Oil & Gas/Bulk Pack (N41 billion); Bi-Courtney Limited, (N35.5 billion); Home Trust Savings & Loans Limited (N27.2 billion) and National Clearing & Forwarding Agency (N20 billion).
    Others are: Roygate Properties (N24.6 billion); Suru Worldwide Ventures Limited (N25.8 billion); Tanzila Petroleum (N52 billion); Multi-Trex Investment Limited, (N3.8 billion) and Resort International Limited (N38.4 billion) among others.
    But many of the debtors have taken the corporation to court. Some are either contesting the figures or denying owing the corporation a penny.
    In an October 6, last year judgment delivered by the Federal High Court, Abuja between Capital Oil and Gas Industries Limited (plaintiff) and AMCON (defendant), the judge ordered the defendant to restructure the plaintiff’s debt.
    The court further orderd the defendant to provide N16 billion trade finance facility to revamp the business and pay plaintiff’s trade creditors. It further directed the defendant to pay additional N10.59 billion to the plaintiff for the payment of sundry creditors, who continue to threaten the plaintiff’s business.
    The management of MRS Holdings Limited also denied claims that it was owing AMCON. The management also refuted the claim on any ongoing plans to liquidate its operations.
    In a statement, the MRS management said: “Our attention has been drawn to a recent publication by the by the Asset Management Corporation of Nigeria alleging that MRS Holdings Limited is indebted to it in the sum of N81 billion and that the Corporation has instituted Suit No: FHC/L/CP/923/2016 to wind up the company over the inability of MRS to pay the alleged debt”.
    Describing AMCON’s claims as false, the firm said: “MRS challenges in the strongest possible terms, the false claim by AMCON that MRS is indebted to AMCON in the sum of N81 billion or any sum at all. The correct position is that MRS obtained a loan from a consortium of banks in Nigeria for a viable project.”
    “AMCON has declared a new aggressive debt recovery drive. MRS has no problem with that but this does not give AMCON a licence to embarrass and harass companies. It is not a crime to obtain loans for viable projects. Execution of viable projects leads to job creation and growth of the economy. However, when companies that obtain loans for legitimate businesses are being harassed and embarrassed in the name of aggressive debt recovery, it signals danger for the growth of the economy”.
    According to the downstream oil firm, it had taken notice of AMCON’s frivolous recovery cases against many companies, which were dismissed by the courts.
    It said: “MRS is taking legal advice to clear its good name and bring necessary actions to seek damages for the embarrassment and damage caused the company’s reputation and goodwill by AMCON’s publication and action.
    “MRS further assures the general public that MRS Holdings Limited and its subsidiaries will continue to transact their businesses with the highest ethical standards and in accordance with the extant laws of the country,” it said.
    Efforts to contact MRS over the weekend, on its current debt status were unsuccessful as calls to the company’s official line were not answered.
    The Federal High Court, Lagos had earlier ordered Bi-Courtney Group of Companies and its owner, Dr. Wale Babalakin to hand-over its concessionary powers to AMCON with immediate effect. This follows the firm’s inability to pay a debt owed the asset managers. Besides, the court ordered Bi-Courtney’s account in banks to be frozen with immediate effect just as it ordered the banks to disclose all account balances to the asset managers.
    AMCON was also ordered to take over three other giant companies – Chartered Investment Limited, Resort International Limited and Roygate properties.
    The order, according to the court, took immediately effect in accordance with a concessionary agreement with the Federal Government. It also ordered AMCON to take over the Old Federal Secretariat building in Ikoyi, Lagos, belonging to Roygate Properties pursuant to a concessionary agreement between Roygate and the Federal Government.
    On these developments, Kuru noted that AMCON has never and will not run any business. But as facilitators, it encourages competent professionals to manage any of the businesses taken over by it. “We want debtors to come and talk to us on how they want to pay. We do not gain anything by embarrassing anybody”, Kuru said.
    On the continued posting of losses by the corporation, he said: “AMCON cannot make profits. It is not possible for AMCON to declare profits. We received about N160 billion annually from the Sinking Funds. The main objective of AMCON is to ensure it discharges its obligations at the end of its term”.
    The AMCON chief said it has so far recovered N644 billion in cash and assets from debtors, adding that it will continue to engage debtors to pay up their debts. It said 80 per cent of the bad loans it acquired from banks were beyond redemption. “Financial institutions have primary responsibilities to give out loans and more than 65 per cent of banks’ incomes are from interest and loans. All these facilities they have transferred to AMCON, 80 per cent of them are already inside the coffin. The only things that supports them, are the supporting assets,” it said.
    In an interview, AMCON’s Head, Corporate Communications, Jude Nwauzor, said that the AMCON has no interest in killing any business but to see it thriving. He listed Peugeot in Kaduna, Multi-Trex in Ogun State, the two oil rigs, tank farms, Tinapa Resort, are heavy investments in the books of AMCON.
    AMCON, he said, also has several real estate businesses and confirmed that the Federal Secretariat in Ikoyi was in its book.
    “These are massive investments. Look at Peugeot, when it was at its peak, it was assembling 90,000 vehicles monthly. A factory that does 90,000 vehicles cannot employ anything less than 5,000 workers. You can imagine the number of workforce and ripple effect of their earnings. AMCON stepped into a place like Peugeot to stop it from collapsing,” he said.
    According to him, with the investments the corporation is making and ample opportunities that this present administration and AMCON are exploring, one can imagine what can happen if Peugeot comes back in full stream.
    He said: “Right now, things are not what it should be. They have orders to supply cars but where are the funds. Although with the right investment, AMCON has stepped in to ensure the place is not run down. We want new investors to take over the business and it will start flying again. That is the type of impact that AMCON wants to see.
    “Imagine if Multi-Trex which is a cocoa processing company in Ogun State, is functioning, which when it was in full stream, had b etween 4,000 to 5,000 workers. Imagine if Tinapa Resort is functioning, the number of Nigerians that will be employed. You can imagine if Aero Contractors is in full flight and the number of workers that will be employed and what they will do to the economy. Imagine if Arik goes down and AMCON did not intervene,” he queried.
    He said the corporation had intervened in Arik, adding that the impact of Arik in the aviation industry cannot be over-emphasised.
    His words: “You can imagine if Afrijet is flying. That is why the AMCON chief always insists that Nigerians need to rally round AMCON for it to succeed because a lot of Nigerians do not understand that it is the taxpayers money that the people have borrowed and refused to pay back. It is you and I that keep our money in the banks and these borrowers go for the money and refuse to pay back,” he continued.
    He said that bad loans in the industry have made it difficult for more Nigerians to borrow. “People have borrowed money to set up poultries and those funds have ended up in property market in Dubai. A debtor is flying private jets, buying houses in Beverly Hills, and Union Bank where he took the money is suffering. We actually intervened in 22 banks in Nigeria, but the ones that were irredeemable were the ones that were bridged. There were other ones that AMCON bought over the bad loans and gave them fresh funds to do new businesses.
    “The AMCON had to bridge the banks, stabilise them for sale. The Federal Government had the option of liquidating those banks, but the depositors would lose their funds. But you can imagine what would have happened to the economy if AMCON was not created. Zimbabwe would have been like a paradise compared to Nigeria,” he said.
    Speaking on Peugeot takeover, he recalled that the company was doing 90,000 vehicles in the 80s but now, it is struggling to do 6,000 because of lack of proper investments. “Everything AMCON owns is for sale. At the right price, it is sold. But the state of the economy is making it difficult for us to sell. I don’t know how many Nigerians can raise the fund to buy Aero Contractors.

  • Businesses are more prudent now-MAN boss

    How do SMEs now source raw materials?

    Most of them source from anywhere they can outside the interbank market.

    At what cost do they source forex?

    They source at the prevailing parallel market rate which is now about N470/US$1.

    How has this affected your cost of production?

    It is obvious that the cost of production would rise and it did, astronomically.

    How is the purchasing power of the public affecting your product sales?

    With the current inflationary trend, the purchasing power of the citizens has been seriously eroded. People now go for what is direly essential and they buy in small quantities. Thus sales have been negatively affected.

    What survival strategies have you put in place for your business?

    Manufacturers have resorted to cost-cutting strategies, in every way possible and they strive to be more efficient in production and prudent in their management and expenditure.

  • NECA: Businesses grappling with traumatic times

    NECA: Businesses grappling with traumatic times

    The Nigerian Employers Consultative Association of Nigeria (NECA) says businesses are grappling with extremely traumatic times, urging the government to look beyond the seeming good performance of a handful big businesses in gauging the state of the economy.

    Its President Mr Larry Ettah, in his address at the Association’s Annual General Meeting (AGM) in Lagos, said: “In recent times at our AGMs, we have variously described our operating environment as challenging, unpredictable, unstable and “energy sapping”.

    “These words are, of course, true and descriptive of what our members have experienced in keeping their businesses afloat. As I reflect on the events and situation of our economy in the past one year, I am truly short of appropriate words to capture the extremes of hardship and trauma businesses have had to contend with to remain standing. Suffice it to say congratulations to any enterprise whose head is still standing above the inclement weather of our operating environment”.

    Ettah, who is also the Group Managing Director/CEO of UAC of Nigeria Plc (UAC), said the  mortality rate of micro, small and medium scale (MSME) businesses is alarming, adding that if we are going to get a firm grip of the panacea to the high youth unemployment in Nigeria, then we must pay heed to the imperatives for sustainable enterprise.

    On the economy last year and the outlook for in the year, the President said: “With a growth rate of 2.79 per cent in 2015; the year recorded a dramatic slowdown from the five to six per cent growth, the Nigerian economy has become accustomed to recording.

    “The triple jeopardy of a stand-still in government as a result of the 2015 election; a new government grappling to settle down and the drastic fall in government revenue as a result of fall in the crude oil prices dealt a massive blow to the economy’.

    Ettah said the year had so far not been any better with multiple economic challenges: depleted foreign reserves from $ 29.9 billion in November, last year to $25.71billion on August 19, this year; naira depreciated by 31.7 per cent from N197/dollar in March 2015 to N330/dollar in August 2016; high capital outflow; upward trend of inflation from 8.5 per cent in March 2015 to 15.6 per cent in June 2016 and increased interest rates.

    “While there is no doubt that the past administration was profligate in its management of our commonwealth, it is quite evident that the lack of clarity about the economic agenda of the current government and some wrong policy choices have contributed to the current economic stagnation and recession.

    “We, therefore, welcome the thrust of 2016 budget of which recognises that meaningful GDP growth requires quality spending to reflate the economy. We need to invest in boosting our infrastructural stock; we need to reduce our domestic debt; and there is the need to spend to position our economy to be export oriented and less dependent on import. We hope this budget will be faithfully implemented as this is key to the revival of the economy from the current recession,” he said.

    Ettah said no sustainable growth can take place in the economy without effective implementation of the budget, saying that it is  a grave concern that year after year, the passage of the budget is subjected to a long period of delay.

    On the deregulation of the foreign exchange market, he said in the heat of the challenge of scarcity of foreign exchange, NECA conducted a survey among its  member-companies and discovered that only four to five  per cent  of members’ foreign exchange request for importation of raw materials and machinery were met by the banks.

    “This actually explained business’inability to import required raw materials for production to replenish exhausted inventory (stock).

    “ The implications of this, as it were, are: low productivity, low profitability, and staff rationalisation, which worsened the already unfortunate unemployment rate,” he said.

    He, however, praised the Federal Government for heeding the call for a deregulated foreign exchange market,which allows market forces to determine the naira rate of exchange.

    “Hopefully, this will improve supply of foreign exchange to the economy. It is hoped that in the medium term the policy will help improve and stabilise the value of the naira.

    “The issue, however, still remains that of ensuring adequate availability of targeted development finance to the real sector, which has enormous potentials for job creation in the economy.”

  • Online searches rise by 43% as more businesses go online

    At a time when the economic realities are forcing companies in Africa to fold up because of increasing overhead operational cost, Nigerian retail business owners are finding new ways to reduce the cost of running a business. One of such ways is taking the business online by subscribing to online market hubs and e commerce websites.

    Internet penetration, increase in mobile phone usage, ability to source for items online, store-to-door delivery and online marketing platforms are some of the factors keeping most Nigerian retail businesses afloat.

    A research by Western Mall, the country’s first auction platform, showed that more people listed products for sale on its website this first quarter, compared to last year. Dealers in electronics, mobile phones, computers, home appliances and fashion listings on the website have also increased by 35 percent.

    The research also revealed that more shop owners, particularly the typical offline market or store, now use free marketing channels, such as Facebook, Instagram, Nairaland, Pinterets and others to showcase and market their goods and services as against seeking highly populated areas.

    Attesting to the fact that the online market place is gaining more recognition in this part of the world, marketing activities on online market hubs and forum in the country shows a 22 percent increase this first quarter and at least 36percent of online shoppers completing purchase transactions.

    Dealers in items sourced from other countries have also started the trend of ordering goods from abroad online, thereby  cutting off the need to travel to buy and the space where such items would be stored.

    One of the dealers using the Western Mall website said he has been getting more inquiries and making more sales since subscribing to the online platform. He also said that his overhead is now lower since he works from his home and does not need to rent a shop or a warehouse.

    Experts, therefore, suggest that more businesses can benefit from adopting the online market trend in Nigeria now. They say not only will it ensure that cost of operation is reduced, it will make commercial real estate more affordable as the need to rent shops will ultimately reduce.

  • ‘Dearth of capital crippling businesses’

    Businesses in Africa are being stifled by lack of capital, the United Kingdom’s development finance institution (CDC) has  said.

    It noted that though many African businesses have great potential to thrive, create employment and impact on their countries’development, they are being held back by their  inability to attract long-term capital.

    According to its Regional Director for Africa, Imoni Akpofure, who spoke at an investment workshop for reporters in Lagos, businesses become distress as  commercial investors perceive the region as unstable politically.

    She said as part of the institution’s core mandate to bridge the financing gap, CDC has committed huge capital investments in priority sectors of agribusiness, construction, education, financial institutions, health infrastructure and manufacturing to propel sustainable economic growth as well as significant job creation.

    “We apply high-quality commercial investment processes because if the businesses we invest in are not commercially viable with strong financial outcomes, the jobs they create today will be gone tomorrow. We also understand that it takes more than money to build a great business, so we invest our time and expertise  to help the businesses we invest in to improve their management of environmental matters, relations with their workforce and stakeholders and with society at large,” she said.

    On the import of private equity investment to business growth, the Investment Manager, Mr. Gozie Chigbue, said partnership with business owners when investing ensures judicious channeling of resources.

    He said investors should subject their targets to certain prerequisites, especially long-term viability before committing capital. According to him, the seven phases of investment are sourcing, screening, due diligence, financial recommendation, closing and monitoring.

    “You start by funding the right company and finding the right opportunities. You have to make sure you understand the market intently and spend time to talk to the right people involved to avoid uniformed investment in fragile sectors. For us at CDC, the point of investing is not just to make profit but to also create jobs.

    “We invest both directly into businesses and indirectly through private equity to fund managers who we carefully asses the redevelopment impact of their proposals. We take a flexible approach; taking care to match the investment instrument to the specific needs of each business. We are also able to provide a mix of equity, loans and mezzanine finance,” Gozie said.

    CDC since 1948 has invested across spectrums of over 100 industries and sectors in Nigeria such as Azura Power, Indorama Eleme Petrochemicals Company, ECOM Agroindustrials, Swift Networks and Synergy Fund, according to the Environmental and Social Responsibility Director, Mr. Mark Eckstein. He emphasized that beyond making profit, CDC was committed to establishing strong working relationship with host communities of partners. He said: “for instance, Petrochemical and Fertilizer industry, Indorama has since, with the backing of CDC and others made significant improvements including increasing production. Some of the greatest strides have been made in raising environmental and social standards which has been critical in maintaining good relations with the local community in the Niger Delta.”

  • Labour pickets electricity firms as govt urges acceptance of tariff hike

    Labour pickets electricity firms as govt urges acceptance of tariff hike

    •Power firms: action counter-productive

    Labour unions and their allies yesterday shut down electricity distribution (Discos) and generation companies (Gencos) offices nationwide over  the 45 per cent hike in the electricity tariff by Nigeria Electricity Regulatory Commission (NERC).

    In most of the state capitals, where the protests led by leaders of Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC)  were held, it resulted in heavy gridlocks  and leading to businesses and offices being closed down.

    Abuja: NLC President Comrade Ayuba Wabba led workers to the National Assembly,  where  he got the backing of Senate President Bukola Saraki on the need for a reversal of the tariff.

    At the Abuja Electricity Distribution Company, where armed security men were kept on guard to prevent labour accessing the premises, Wabba said exploitation of the Nigerians must not be allowed to stand.

    He said: “Any increase in this hard economic situation should not be allowed to stand. The exploiters should not be allowed to exploit us because this is our common wealth that has been sold to them. It is very clear that the management of the power sector cannot be left in the hands of those people, who cannot deliver…

    “We are also sending warning to Discos and Geckos because we know that they are in alliance with the NERC and that alliance should not be allowed to stand. Any alliance that is against Nigerian people should not be allowed to stand…

    “Therefore, we should not allow a situation where few will collaborate, including the Minister of Power. We are really disappointed because all the letters we have written to him, he has not even responded.”

    President of the Trade Union Congress (TUC), Comrade Boboli Agama, wondered whether the National Assembly was consulted before the increase in tariff was announced.

    He said: “We are here to express our bitterness. For an organisation that is working for the bitterness of this country to wake up and say it has increased tariff is not acceptable. We are happy that when we engaged them last night, they confessed that they never consulted us and we wondered whether they have consulted the leadership of the National Assembly before the tariff was increased.”

    In Lagos State, the protesters marched from Ikeja under-bridge to Ikeja Disco office in Alausa. This resulted in a heavy traffic along Awolowo Way/ Alausa road in the state capital.

    Speaking during the protest, the NLC Vice President, Comrade Amaechi Asugwuni, who represented the NLC President, Comrade Ayuba Wabba, said the hike in tariff was inhuman and unjustified.

    He decried the refusal of NERC to follow the laid down law, which stipulated that the Discos should give out prepaid meters to every electricity consumer within 18 months of their start of operations.

    He said workers were ready to shut down the economy, if the Federal government refused to reverse the hike.

    “Rather than see reason with Nigerians, the Minister of Power, Works and Housing has been advancing spurious argument in justification,” he said.

    Deputy General Secretary, Nigeria Textile, Comrade Ismail Bello said the tariff increase was an anti-people’s policy, adding that labour was ready to fight it.

    He called on the removal of Minister of Power, Works and Housing Babatunde Raji Fashola for violating the court order, which stopped the hike in tariff until the case is concluded.

    “Nigeria cannot be an animal kingdom, where there is no order. For Fashola, a Senior Advocate of Nigeria (SAN), to disobey court order, which had ordered a halt to this increase in tariff, means he is playing with jail and is not fit to be a minister. He should be removed with immediate effect for making mockery of a court judgment.

    “He should obey court order or else he should be removed,” he said.

    The Chief Finance Officer, Ikeja DISCO, Mr. Aigbe Olotu, said it was wrong for labour to picket the Discos because they were not responsible for the increment.

    Kwara State: Scores of members of the NLC and TUC, led by their leaders, also sealed off the premises of Ibadan Electricity Distribution Company (IBEC) in Ilorin, the state capital.

    The placards-carrying protesters also called for the resignation of the Minister Power, Works and Housing for not following due process before the increase.

    Some of the inscriptions on the gate of IBEC in the ever-busy Challenge area of Ilorin read: ‘Stop your crazy bills’, ‘We cannot pay more for sick light’, ‘Provide prepaid meters and give us 24-hour uninterrupted light,’ and others.

    Some of workers of the company, who arrived early, could not gain entrance. They were seen in groups discussing their plight.

    At about 8am, a vehicle conveying some security operatives arrived at the scene and they urged the protesters not to allow the event to be hijacked by hoodlums.

    Speaking with reporters, the state NLC Chairman, Yekinni Agunbiade, said due process was not followed before the tariff hike.

    Oyo State: Hundreds of members of the NLC, TUC and civil society organisations stormed the streets of Ibadan in protest against the 45 per cent increase in the tariff.

    The three major offices of the Ibadan Electricity Distribution Company (IBEDC), including the Ring road Ibadan Headquarters, were picketed by the protesters in line with the directive of the NLC leadership.

    The protest started as early as 8am from Monatan to Dugbe and ended at the Headquarters of the IBEDC on the Rind road, Ibadan.

    The IBEDC workers could not wait to witness the picketing as they fled their offices.

    The protesters included market men and women, students, artisans and members of transport unions.

    There was traffic as the protesters moved through the major roads with placards condemning the hike in tariff.

    In Kaduna State, NLC and TUC members, as early as 7am, stormed the zonal headquarters of the Kaduna Electricity Distribution Company (KEDCO) and locked the gate.

    The labour union members, who chanted solidarity songs in between speeches, vowed to continue the protest until the Federal Government reverses the increment.

    Former Deputy President of the NLC, Comrade Issa Aremu, who led the labour unions to picket the electricity distribution company, said it became necessary after effort to make the Federal Government to shelve the idea of the increment failed.

    He said Nigerians were paying more than they consumed for electricity supply and wondered why the Federal Government should increase the tariff when the supply had not improved.

    But the Managing Director/CEO of the Discos, Garba Haruna, an engineer, called on the protesting labour unions to stop the picketing of distribution companies, saying their action was counter-productive.

    Ekiti State: The organised labour also shut down the Ado Ekiti Business Office of the Benin Electricity Distribution Company (BEDC).

    Officials of the state councils of NLC, TUC, Joint Negotiating Council (JNC), National Union of Local Government Employees (NULGE), Nigerian Civil Service Union (NCSU), Academic Staff Union of Secondary Schools (ASUSS) and Non-Academic Staff Union (NASU) led the picketing at the BEDC office.

     

    The labour leaders, who were led by the state TUC Chairman, Odunayo Adesoye, stormed the BEDC office at about 8.23am. They described the increase in electricity tariff as a “glaring robbery”, which must be resisted by Nigerians.

    Workers of BEDC were chased out of the building in the presence of the officers of the Nigerian Security and Civil Defence Corps (NSCDC), who had arrived at the place to ensure that the protest was not hijacked.

    The protest led to traffic along the Ajilosun Highway. Some residents, who came for one transaction or the other, went home disappointed.

    Adesoye described the tariff hike as “arbitrary and an extortion”, calling on the Federal Government to reverse the price. He vowed that the picketing would continue until their demands were met.

    The state NLC Chairman, Ade Adesanmi, said Nigerians could not be paying for services not rendered, adding that the Discos owed Nigerians explanations on the new tariff.

     

    Cross River State: The chairman of the state NLC, Comrade John Ushie, yesterday described the hike in electricity tariff as an economic crime.

    Ushie, who stated this after picketing the Calabar office of the Port Harcourt Electricity Distribution Company (PHEDC), said the new tariff violates section 76 of power sector reform.

    He said the law requires that every consumer should have a meter before any increase in tariff.

    Ogun State: The state chapter of NLC also yesterday picketed the Abeokuta and Sagamu offices of the Power Holding Company of Nigeria (PHCN) over what they termed unjust and exploitative hike in tariff.

    The NLC state chairman, Comrade Ambali, who led the picketing exercise, said the tariff hike was an act of insensitivity to the plights of electricity consumers.

    Ambali noted that the organised labour staged the protest to rescue the masses “from the criminal and wicked hike”.

    The NLC was joined in the protest by TUC, Campaign for the Defence of Human Right (CDHR) and the electricity consumers, as they marched on major streets of Abeokuta and Sagamu metropolis to sensitise other electricity consumers against the new tariff.

    Armed with placards bearing different inscriptions, the angry protesters barricaded the entrance to the Ibadan Electricity Distribution Company (IBEDC) offices on Moshood Abiola Way in Abeokuta and the one in Sagamu and prevented workers and customers from gaining access to their offices.

    Ebonyi State: The offices of the Enugu Electricity Distribution Company (EEDC) were shutdown yesterday as directed by the NLC and TUC leadership.

    Chanting songs such “solidarity forever” and “We have decided to fight for the masses”, the workers besieged the head office of the distribution company as early as 8am.

    They were led by the state NLC Chairman, Comrade Ikechukwu Nwafor and TUC Chairman Comrade Elias Oduma.

    Their presence forced the EEDC’s workers to lock up their offices and stop collection of electricity bills.

    Nwafor said “due process was not followed when increasing the tariff in consonance with section 78 of Power Reform”.

    He added that “there has been no significant improvement in service delivery”.

    Oduma said “most consumers have not been given meters in line with the Privatisation Memorandum of Understanding (MOU) of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered”.

    “There is a subsisting court order dated May 28, 2015 by Justice Mohammed Idris of the Federal High Court, Ikoyi, Lagos, in the case of Toluwani Yemi-Adebiyi versus NERC and others”, he added.

    Edo State: Official activities were disrupted at the headquarters of the Benin Electricity Distribution Company (BEDC) by a combined protest against hike in electricity tariff hike by the organised labour and members of the civil societies in the state.

    The protest caused heavy vehicular traffic along major streets in Benin City. Vehicles were used to block the two entrance gates to the BEDC office. But officials of the Red Cross Society were on ground for any emergency.

    The state chairman of NLC, Emmanuel Ademokun, said the protesters were at the BEDC premises to effect a reversal of the new electricity tariff.

    Ademokun said they would not leave the BEDC premises until the tariff is cancelled.

    Niger State: Business activities also came to a halt at the offices of the Abuja Electricity Distribution Company (AEDC) in Minna as the state chapter of NLC and TUC picketed the offices.

    The members of organised labour, who arrived at the premises of AEDC at about 9am, asked workers who had already resumed to vacate the premises. The place was thereafter locked and sealed.

    The state TUC Chairman, Taminu Yunusa, said there was no resistance by the workers, adding that they were complying with the directive of labour national bodies.

    Security agents took over the premises to protect the property from vandals.

    Kanos State: Workers also stormed the head office of Kano Electricity Distribution Company (KEDCO) over the new tariff regime.

    The protesters, who chanted solidarity songs, carried placards with inscriptions such as “Trade union say no to unilateral & unlawful electricity increase”, “Baba Buhari! Save Nigeria” and others.

    Speaking on behalf of the protesters, the state NLC chairman, Comrade Ado Minjibir, said their mission was to let the general public understand the cost implications of the 45 per cent sudden hike of electricity tariff.

    He said it was left for the citizens to decide whether to pay or not.

    But the National Association of Electricity Employees (NUEE) disassociated itself from the protest.

    NUEE State Chairman Nasiru Ado Gezawa said the protest was wrongfully channeled to Discos.

    He said it should have been directed at their regulatory body, who orchestrated the hike.

    KEDCO Public Relations Officer Mr. Muhammed Kandi described the picketing as misplacement of priority, unreasonable and uncalled for.

    Ondo State: Business activities were yesterday paralysed by labour unions in the state over what they called “astronomical increase in electricity tariff by the Benin Electricity Distribution Company (BEDC)”.

    The protesting labour unions were joined in the solidarity protest by members of the landlord associations and civil society organisations.

    They shut down operation at the office of the BEDC in Akure.

    The protesters, who carried placards with several inscriptions, caused heavy traffic on the popular Isinkan/NEPA road for many hours.

    Some of their placards read: “No meter, no payment”, “Compulsory metering of electricity consumers is disobeyed”, “45 per cent electricity tariff increase, an exploitation” and “Electricity is a social service and not to be commercialised”.

    The state NLC Chairperson, Bosede Daramola, led the picketing.

    Benue State: The NLC and civil society organisations (CSO) also staged a peaceful protest through major streets in Makurdi against the increased in electricity tariff.

    They matched through Wurukum and terminated their protest at the Makurdi Business unit headquarters of PHCN.

    They picketed the office, preventing people from going in or out.

    The PHCN Business Manager John Emeruwa addressed the protesters and appealed for understanding, saying he would forward their complaints to higher authorities for consideration.

    Osun State: Workers also locked the Ibadan Electricity Distribution Company (IBEDC) in Osogbo, the state capital.

    Members of the organised labour pasted different banners with anti-government messages on the main entrance of the company to express their displeasure against the development.

    However, the company’s Branding and Communication Manager, Mrs. Kikelemo Owoeye, could not be reached for comment.

    But a senior staff of the company, Mr. Fisayo Ajayi, said the protest was peaceful and devoid of any rancour.

    Abia State: Administrative and business activities at offices of the Enugu Distribution Company (EEDC) in Aba and other parts of the state were also crippled for over hours following the protest embarked by members of NLC.

    As early as 7am, members of the NLC stormed EEDC offices Aba, the commercial hub of the state, forcing workers of the establishment that came early to work out of their offices.

    The protesters later locked the entrance to the premises.

    EEDC workers left for their homes after a long wait without any move by the labour union to shift ground.

    Customers, who came to make payment or to complain, were left unattended to.

     

  • John Holt explores new businesses to drive growth

    John Holt explores new businesses to drive growth

    John Holt Plc, one of Nigeria’s oldest conglomerates, is exploring new business opportunities to mitigate import-related influence on its businesses and strengthen its domestic products and businesses. These moves come as John Holt seeks to expand its businesses in Nigeria as it struggles with the external shocks due to Naira depreciation.

    In the business outlook for the conglomerate, the board of the company said it has been exploring for new business opportunities including provision of electrical transformers, electrical equipment and expansion of fire control business to widen the revenue base of the group.

    The conglomerate said it was seeking investments in businesses that are less import dependent as devaluation of the Naira remains a drain on bottomline.

    According to the company, with its business interests ranging from engineering, leasing, trade and distribution, the devaluation of the Naira was a drain on bottom lines since most of its raw materials and equipments are imported.

    “Because we are an import dependent company, we had N500 million wiped out because of devaluation,” the company stated.

    The board of the conglomerate said it has started implementing a number of measures to improve liquidity and profitability of the group as well as strategies to enhance revenue and control costs.

    The board of the company said it has also been working on injection of long-term funds in order to ensure that the company has adequate resources to continue in operation for the foreseeable future.

    The audited report for the period ended September 30, 2015 showed that John Holt’s debt to adjusted capital ratio fell to 43 percent in 2015 as against 51 percent in 2014. Finance cost dipped by 7.60 percent to N231 million. The decrease in the debt to adjusted capital ratio for the group during the year resulted primarily from decrease in debt by N400 million from N1.8 billion in 2014 as against N1.4 billion in 2015, according to the company’s 2015 audited financial statement.

    Despite infrastructure deficits such as bad roads and  huge energy costs that spiral up operating expenses of companies in Africa largest oil producer Nigeria, John Holt was able to reduce costs as administrative expenses fell by 20.10 percent to N682 million in 2015 from N856 million in 2014.Distribution expenses were down by 20.30 percent to N856 million.

    The company spent less money on operating expenses to generate every unit of product as operating expense margin (OPEX) margin fell to 43.21 percent in 2015 from 48.10 percent in 2014.Cost of sales was down by 3.80 percent to N1.77 billion, thanks to effective cost control mechanisms put in place by management.

    John Holt attributed the slow growth in sales to reduced patronage from major customers in the oil and gas industry that got hit by the oil price crash.

    The report showed that group turnover dropped from N2.82 billion in 2014 to N2.43 billion in 2015. Gross profit also dropped from N967 million to N655 million. With exchange loss of N528 million in 2015, operating profit shrank from N677 million to N60 million. While finance costs reduced from N250 million to N231 million, the group incurred a loss before tax of N171 million in 2015 as against profit before tax of N427 million in 2014. After taxes, net profit of N591 million in 2014 turned into a net loss of N254 million in 2015. Earnings per share reversed from N1.52 in 2014 to a loss of 65 kobo in 2015.

  • Our goal is to help businesses grow, says Slimtrader boss

    Our goal is to help businesses grow, says Slimtrader boss

    Femi Akinde is the Chief Executive Officer, Slimtrader, Africa’s leading turnkey ecommerce solution provider that gives businesses the opportunity to integrate within their premises and other platforms. In this interview with TONIA ‘DIYAN, Akinde speaks on the benefits of his business to the market.

    In what way has your company affected the economy positively?

    Slimtrader is one of the companies helping Nigeria’s hospitality and tourism sector grow faster. Since we launched our ecommerce solution, Slimtrader has helped hotels increase sales and aid expansion, which increases demand for labour. Looking outside the hotels, we have empowered SMEs as well with solution for small businesses, giving them direct access to their target audience.

    Working with all industries has given us the positive impact we have had on the economy. We have contributed directly to business sustainability and indirectly to job creation through vendors using Mobiashara.

    Our goal is to deliver convenience to the end-user, create more jobs with helping businesses expand and employ labor with our business expanding into different sectors.

    How is Mobiashara different from other platforms in the same business?

    Most platforms that exist in this market are marketplaces for retailers; Mobiashara – that means Mobusiness – gives sellers the tools they need to sell on their own platform and also integrating with other marketplaces. In Nigeria, there is no other platform offering hotel retailing with inventory management or in other industries.

     Why did you establish this company?

    This is indirectly linked to when I tried to buy a ticket to Accra in Ghana and I went through a very long process. It was then it dawned on me the Western countries have easier processes for this. I thought this could be implemented in this part of the world to make the process easier for users.

    At first, I came up with the idea to integrate through mobile phone because of the high mobile penetration in this market; this was to align businesses with multiple channels and access to more people. Overtime, we took it beyond mobile to a web-based platform. Also we did more research and realised that if big businesses like the airlines were having that kind of issue, there are more businesses that have the same problem in other sectors, so we decided to create the solution for other sectors.

    What is your major focus?

    Our area of focus is e-commerce solution for the travel and hospitality sector. In these sectors, hotels and airlines need to set up their platform to manage their inventory and also integrate to connect with third party sales channels such as hotelnownow.com, expedia and more.

    What informed this e-commerce solutions?

    I have always been a solutions provider. At first, we saw a lot of people retailing online and they were not tying it to what the businesses was not selling on premises (inventory management).  It had no connection directly to the seller, which led to fulfillment issues because inventory was not properly managed people were having problems with fulfillment. Due to the backend issues businesses were facing, we created Mobiashara to solve the problem.

    How long have you been in business and what are some of the challenges you have encountered?

    Slimtrader was launched in 2010 and we have presence in four African countries  – Nigeria, Mali, Senegal and  The Gambia. Running a business in any market  isn’t without challenges. Market acceptance (technology)… we found that to be a big problem in our sector. Overtime, it has improved from when we initially launched, if’s adaptation rate was more than 30 per cent across the country, a lot of companies in this sector will be doing better than this.

     How have you been able to deal with some of the challenges?

    First, we have had to build a good and strong relationship with our stakeholders in this market. We also had to spend a lot of money to encourage market acceptance, in terms of educating the people about what we do and the benefit to the sector as a whole. We recently looked into another way of getting across to other stakeholders and we launched the ‘MoRewardsclub program’ to help our clients manage acquire and retain consumers, which increases consumer spend or influence consumers to spend with our partners.

     What are your achievements so far?

    Mobiashara for hotels has been able to help over 22 per cent of hotels in Nigeria and other African countries, helping them to get closer to their target audience and manage their inventory effectively.

    We have recorded impressive number with Airlines. We have worked  over the years in Nigeria and other African countries with companies such as aero contractor, Arik, Rwanda Air and Asky Air among others.

    Mobiashara has also helped over 500,000 farmers to boost their business using e-voucher process for credit risk and visibility to access finances in Mali, Senegal and Gambia.

    We have helped client adaption in three sectors – hospitality, airlines and FMCGs. We have had 1000 per cent growth in hotels and travels launching Mobiashara the first of its kind for brands to integrate their activities offline and online directly synchronicing their inventory and giving them more visibility.

    Looking back, what would you do differently?

    Not sure there is much we’ll do differently. I will say I wish we launched Mobiashara in this market earlier to be able to penetrate the market faster, looking at the success rate we have had so far.

    We have seen businesses come and go in Nigeria. How long do you intend to stay?

    Slimtrader is an indigenous brand aimed at giving businesses visibility through our Mobiashara platform.

    We don’t intend to leave Nigeria but expand to other African countries, giving different businesses the opportunity to increase their business growth with Mobiashara. We recently raised $1 million through Interswitch’s e-payment growth fund to allow us expand and reach more businesses across Africa.

    What are your projections?

    In the coming years, Slimtrader will be present in all African countries. Our plan is to grow rapidly pan African with physical presence in five countries spread through to the East then central and southern Africa.

    Mobiashara for hotels will dominate Africa’s hospitality and tourism sector and this will increase job opportunities in the sector. In Nigeria, the sector has the potential to contribute up to 5.8 per cent to the economies’GDP and Mobiashara will contribute heavily to the success of the market.

    What is your contribution to the hospitality sector?

    Our biggest contribution to the hospitality sector is our Mobiashara for hotels platform, we are giving them a solution which over 99 per cent of them lack. With unlimited benefits such as Connecting and managing inventory, third party integration to platforms, such as hotelnownow.com (sales channels), have their own website for foreign booking and plugging into local booking sites/marketplaces, all in one solution.

    Apart from using Mobiashara to boost sales we have being able to impact the industry equipping Nigerian youths with necessary skills needed to get jobs in the industry. We noticed the loophole for talent in the industry while working closely with hotels and we are hoping technology with the right talent will take the industry to its future.

    How do you intend to remain in this market?

    Our main goal is to help businesses grow and integrate using Mobiashara. As long as we are solving key problems in this market, we intend to remain and expand to other markets. The key is to satisfy the interest of our stakeholders and we have been able to surpass their expectations with Mobiashara.

    What niche have you created for yourself?

    Turnkey ecommerce solution provider, there are very few players in the market offering businesses an integrated ecommerce solution like Mobiashara. To also note that we recently invested in a discount booking website called Hotelnownow.com that negotiates deep discounts with hotels across Africa powered through Mobiashara for hotels.

    This is an opportunity to deliver more success to the businesses Mobiashara has powered through hotelnownow.com being a sales channel partner, which connects hotels with their external target audience by driving sales for them and giving them more visibility.

  • ‘Endless litigations hurt businesses’

    The time spent in resolving commercial disputes can adversely affect businesses, Managing Director/Chief Executive Officer of VAVA Furniture, Michael Tawadrous, has said.

    Tawadrous, a counselor at the International Court of Arbitration, said more judicial reform is necessary.

    “Commercial dispute is what we try very hard to avoid as an organisation. We ensure that our part in any agreement is fulfilled.

    “We keep our obligations and try to ensure that others do their too, because the time spent in litigations in Nigeria and other parts of the world are not reasonable for the survival of businesses.

    “I understand that concerted effort has been put in place to reform the judiciary, but I must confess the time required to get justice is too much,” he said.

    Tawadrous said VAVA is determined to respect the laws, including labour laws and workers rights.

    “We place a lot of premium on human existence. We respect and religiously respect basic human rights, how much more labor rights.

    “We create an atmosphere for individuals to excel, and we also embark on development program for our staff. Even though it is chairs we sell, our company is not made up of chairs. If the individuals that make up the company are excelling, then the company is excelling,” he said.

    On what makes his company different from others, he said: “Our wide variety of products that cut across all human needs in term of furniture for homes, offices, hotels and schools.

    “We consciously eliminate the notion that ‘quality is expensive’. We are the most affordable brand for the quality level we offer; anything cheaper would be disposable furniture – something you must replace in a matter of months.

    “Lastly, from the community perspective, we are different from our counterparts because, human capital development is of extreme importance to us. We have a robust training and development program that is very consistent and in line with modern business practice.

    “We make a deliberate effort in VAVA to maintain 93 per cent indigenous work force, which is at least up to 33 per cent greater than any other furniture company in Nigeria.”

    He said his company also offers special packages to clients. “When you check most of our promos, we combine products that you will need when you buy the other. For instance you buy a seven-seater sofa set and get centre table and side stools free.

    “Essentially, it is near impossible for our counterparts to match our affordability and special offers with the kind for quality we render.”

    Tawadrous said the company’s target is to have all its products fully manufactured in Nigeria with every inch of international standard.

    “We pursue this dream with rigor every day. In just three years, we have over 60 per cent of products locally produced here in Nigeria. We have put in place ultramodern equipment and machinery to help us achieve this objective.

    “We equally import carefully selected raw materials that turn our products into the finest furniture you can find in any retail showroom here in the country. Considerable effort is been made to increase the existing capacity. We still have a lot of work to do,” he said.

    On how favourable economic policies are, Tawadrous said businesses will thrive where they are stable.

    He said: “Economic policies have been having adverse effect on all businesses in Nigeria. For instance, as importers of raw materials, the scarcity and high rate of FOREX has been pushing businesses to the limit, to the extent that long term forecasting cannot be set because of the ridiculous fluctuation in that market.”