The global economic meltdown has hit Nigeria so hard with the prices of oil at its lowest. The MD/CEO of VAVA Furniture, Mr. Michael Tawadrous says the current situation presents opportunity for indigenous manufacturing to flourish. He says taxes and levies should be harmonised to make planning easy. NKECHI IGWE met him.
Foreigners appear to be undermining local operators in the furniture business?
I absolutely don’t think so. At VAVA Furniture, we have over 300 personnel, most of which are carpenters. I am not here to take jobs; I am here to create jobs. We give carpenters access to industrial machinery; we increase and improve their carpentry skills; we upgrade their professionalism and expertise. Some of them leave us to start their own business, and employ other carpenters thereafter. That sounds like development to me, I feel very proud and happy when I meet people that worked with us bidding for same jobs with us.
Some people accuse foreigners of treating Nigerian workers unfairly. How true is this?
Every time I hear this, I feel disgusted. We cannot ignore that a lot of workers are not treated as they should be in Nigeria, but it’s not an issue of nationality. In my opinion, no industry treats workers as bad as the banks do, and 95 per cent of the banks are solely indigenous. I cannot speak for other foreigners, but at VAVA Furniture, we are all like family. We don’t only have respect for each other, we love each other. If your workers are afraid of you, they would do the right things when you are around, but if they love you and love the company, they would do the right things even when you are not around. So to me, love is more powerful than fear.
What is your company’s unique selling point?
Vava is unique because we offer the most affordable premium quality furniture in the country. No other retailer can match our price level with the quality of our products. Anything cheaper than what we offer is what I call disposable furniture – furniture you have to change between every 18 and 24 months. It’s tough to make quality affordable, but that’s exactly what we do. Also, (although this is a more internal scenario) our human capital development makes us different from others. We have robust training and development programmes (for our workers) that are very consistent and in line with modern business practice. It is also a deliberate effort from Vava to maintain 93 per cent indigenous work force, which is at least up to 35 per cent greater than any other furniture (operating on our level) company in Nigeria.
What are your challenges?
As the fastest growing furniture company in Nigeria, we have a way of facing every obstacle that confronts us. Like every other business, there are challenges, but we have fashioned a way to deal with these numerous challenges. It is never an issue for us to take the next step at our level of development.
Let me use this opportunity to commend the effort of Mr. President for stabilising the system. I salute his courage and determination to bring Nigeria back to the right track; he promised change and so far, we have seen some level of change in business of governance, even though the process is slow, I think we are in the right path. I also commend his carefully and meticulous selection process of the ministers, it is my belief that this team of ministers will perform. I must also appreciate the effort of this administration to diversify from mono-economy to invest in other sectors such as manufacturing. Yes, Nigeria’s economy is a very large market that can accommodate any genuine investors, and there is also a great resource to complement the market, but rash investors should prepare, because the market is becoming very sophisticated to the extent that only professionals can survive.
Though you manufacture here, don’t you think some people still prefer products manufactured abroad?
We must first understand why they prefer the products that are manufactured abroad. It is not because of the location in itself; it is because of what that location offers. VAVA Furniture creates furniture at international standard, with the best raw materials, tools and machinery of world class designs, and others. Because of this, gradually Nigerians are beginning to see that they can acquire and purchase great quality furniture made in this country. I think that “abroad” preference is gradually fading away. Mark my words, with the recent occurrences in the Nigerian economy and currency, foresight would tell you that indigenous manufacturers will have the upper hand in the nearest future
Is there any difference between your product and that of the local furniture maker?
Local carpenters are working as hard as they can to earn a living, and we can only but encourage them to do better. But the expertise, the revenue and research and development we put into manufacturing our products make the clear difference. If your hand can build it, your hand can break it. We upgrade machinery at our factory every18 months, using only the best raw materials (leather, wood, aluminium, and others). We have expatriates that help with design and quality control. At the moment, it would be tough for competitors to match up with our level of commitment.
Don’t you think because your products are not affordable some people patronise local furniture makers?
There is no business that can sell to everybody; affordability is relative. At the price level we offer, any reduction would alter the quality we offer, and that is certainly not something we are willing to do. The moment we reduce our quality, we would gain a lot more clients than can afford the new price level, but we would also lose clients that cannot accept the new quality level. That’s not our direction.
There has been outcry over multiple taxation and levies. What is your take on this?
The tax and levy policies of Nigeria and its states make everyone (whether foreigner or a national) equal in the commercial realm. There’s no law that says because a company not solely owned by a Nigerian should pay more than others; but some individuals working in certain agencies believe that foreign owned companies have a truck load of dollars coming into the system, and they try so hard to get a share from a cake that does not exist.
Do you source your materials locally?
Presently 70 per cent of our raw materials are internationally sourced. This is because of certain international standards in quality measures we aim to consistently obtain. While 60 per cent of our products are fully manufactured in Nigeria, a lot of the components and raw materials used in manufacturing them are foreign sourced. Next year, it is our plan to start a company that strictly refines home grown wood. This company would help us to utilise the best grade of wood to manufacture our products without having to source them from foreign suppliers, and provide this same grade of wood to indigenous companies that are manufacturing.
Was it your dream to become a furniture maker?
Well, it was my dream to be a great furniture retailer; but like every dreamer, once your dream is gradually becoming a reality, you pick up a greater dream. So I then dreamt of being a furniture manufacturer, which I’m doing right now. Currently, we only manufacture for Vava Furniture, and it is my dream that we manufacture for other large furniture retailers around the world.
What are your footprints in terms of corporate social responsibility?
Actually we have registered branch for World Fund for Development Programmes (WFDP). I am their country representative. This organisation’s mission is empowering the needy in support of their education, health, agriculture and economic development. The organisation has been building thousands of schools hospitals and other developmental projects all over the world. It is a very good step for us to have this organisation here in Nigeria and we are committed to the mission of WFDP in this country. We are also committed to Nigeria as our very hospitable host.
Why did you leave Egypt to establish your furniture business in Nigeria?
A furniture company invited me as an expatriate to Nigeria. A lot of my family and friends back home in Egypt advised me about the terrain I was about moving into. I heard Nigeria was unsafe, undeveloped and poor. That was the wrong image given through the media about Nigeria in other countries. But the moment I arrived this country, I saw that all the negative impressions created about the country were false and largely uninformed. I fell in love with Nigeria instantly. It did not take me three weeks to realise that this is where I was destined to be.
