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“This is the most strategic market in sub-Saharan Africa and ECOWAS”

Interview - June 18, 2013
Obi Ezeude, Managing Director and CEO of Beloxxi Industries Ltd speaks to World Report about the importance of balanced, diversified economic growth in Nigeria, as well as the opportunities for investors in West Africa’s powerhouse, highlighting: “Foreign companies that want to come and invest in this country will make a very good return on their investment.”
Nigeria has been enjoying very healthy economic growth over the past decade, averaging at about 7%. It is expected to continue to grow at approximately 6.5% in the coming years, or even more. How do you see Nigeria being able to sustain such growth, and how key do you think diversification is to this?

The statistics for growth are there, but some of us in manufacturing do not have access to these statistics. Be as it may, some of us in manufacturing believe that the only way that the economy can grow very well is if it is diversified more away from oil and gas, into manufacturing, construction, hospitality, and textile industries. The critical area for growth, particularly in Nigeria, is employment generation. If the statistics show that the economy is growing but there is no employment, then we will have a problem. That is where we are now. So diversification in order to enable the economy to grow is very critical to the growth we would expect. Nigeria needs massive investment in manufacturing, which will create jobs. If you do not create jobs, you will not have a middle class, and if there is no middle class, there will be no consumption, and at some point nobody will buy anything as they will be poor. Growth is fine, but it must be balanced, and you can do this through diversification. 
Beloxxi is one of Nigeria’s success stories. The company moved from being a trader to a manufacturer, therefore you are raising the standards of the industrial sector here in Nigeria. What potential does this sector have to grow here in the country?

The potential for growth in the industrial sector is enormous. It is unimaginable, because people need everything. When people talk about the story of Beloxxi, they fail to realise that we got into manufacturing with the prime importation of biscuits, when everybody thought that we were selling. They told us all the reasons why it would not work, but nobody gave me a reason why it would work. So we decided to do it, just to show that it would work. If you do not provide a solution to a problem, it will start to linger, and nobody can ever solve it.
We have been very successful, but again, it has been very difficult. We have had to work hard to prove that it is possible to succeed in a country with all the challenges that we have. Foreign companies that want to come and invest in this country will make a very good return on their investment. I think they should look to Nigeria for investment, because we have a very good climate for investment. Regardless of what people say about Nigeria, this is the most strategic market in sub-Saharan Africa and the ECOWAS region as well as countries in central Africa.
What are your expansion plans?

We want to expand in three or four phases. We are just at phase two now. Phase two has been going on since March last year. Phase two is being undertaken so that we can satisfy the local market and the West African market, which has been opened up to us. This is very important because we are not interested in making too many products – we just want to take them and deliver them to the whole of Africa. If we succeed in this, we will be fine. Beloxxi’s strategic objective is to make the best cream cracker we can make, and deliver it to consumers and make their lives better. That is the essence of our expansion. We are not necessarily expanding into new products, but we want to give people world-class products from Africa and Nigeria.
When you started manufacturing, your goal was to give Nigeria biscuits that were better than foreign biscuits, your imported crackers. How difficult was it to achieve this aim, starting from scratch?

It was not very difficult at all. The critical ingredient is the will of the entrepreneur. You must make up your mind as to what to do; that is very critical. If you want to make an inferior product, that is fine, but if you want to produce a world-class product, this means that you have to talk to the people who will help you do this. It was as simple as that. We had to talk to the real guys.
Firstly, you need the right machinery. So we went for the world-class products; we did not want to cut corners. Secondly, we went for world-class raw materials. Thirdly, we made sure that our people were well trained. And then of course, you need to create an environment and structure that is able to create this quality you are talking about. It has to be holistic – you cannot do one thing in isolation. We had no doubt in our mind when we were putting it together that it would work.
For instance, we designed our wrapper in Italy and delivered it in South Africa. Our ingredients come from all over the world – we get some from Switzerland for example and our skimmed milk comes from Germany. 
Beloxxi bakes low fat products, with no animal fat, low sugar and salt, and no additives – in short, top quality biscuit production. Are you interested in healthy meals, particularly for children?

I feel fantastic about it. What people tend to forget is that if you go and do something, particularly in food, the biggest customers are the children – those at nursery, primary and secondary school and university. This is our most important group. We also want health-conscious adults to use our products. It makes us feel wonderful that we have been able to deliver a world-class product to Nigerian children, which is nutritious, world-class and adds value to their lives.
We could extend this in the future, but for now, we are concentrating on delivering quality products to them, every day and in a consistent manner, without failure.
You are contributing a lot to employment in Nigeria. 100% of the company’s staff are Nigerians and Beloxxi is the highest employer in your sector. That is a sort of dream come true. What other initiatives are part of Beloxxi’s corporate social responsibility (CSR) program?

When I started Beloxxi, I made it very clear that I would only employ fresh graduates, and train them to come up with the ideas we have. All our factory staff are secondary school finishers; I do not take on professional factory workers. This is very simple – when we hire them, we make sure that they make an irreversible commitment to go to school. My belief is that we need to train a new group. If you go to McDonalds to work and then you go to university, and then when you finish studying you go back to McDonalds, that is a different career. That is what we want in Beloxxi. If you are in school, we pay your school fees. If you are on holidays, you come back here to work. That is our CSR. As a result, you mould a human being, who will then understand the business from the very beginning. 
Beyond that, all my staff are fed for free in our canteen. That is also CSR. I have a clinic here with doctors and nurses who treat our staff. Why do we do all this? If you take a holistic view of the economy, there are gaps. We want them to understand that they are not just here to work; they are here to make a living and enjoy what they do. When they go outside, they should be proud to say that they work at Beloxxi. We make sure that our staff are happy, and we also get involved with the University of Lagos. We recently built a business simulation lab and we gave it to them. Everybody will be wondering why. All areas in education have gone beyond simply copying notes off a board, to simulation, using ICT, so that students can understand how the real world works. It goes without saying that once they do the simulation, duplicating that in the real world it becomes easier for them, and they will understand it better. 
We choose a particular sector to get involved in – that is the first time we have had something like that in Nigeria. We did this so that students can learn and benefit from that. As a result, we will bring world-class education to young Nigerians who will ultimately end up in Beloxxi when they graduate, as Beloxxi staff. So we are doing CSR to benefit the people and this will also ultimately benefit us, and contribute to our own portion of development. When the President came here, I told him that my job is very simple – I just take simple, ordinary young Nigerians. 
Why are you personally so engaged in working towards international standards and higher education? Why are you giving so much back to your country?

This is the only country I have. You cannot operate in an environment without making it better. You cannot just take – you must also give. The only way to show leadership is by showing an example. You do not need to have political power to make a difference; in my own little way, I can also make a difference. If everybody contributes, Nigeria will be a better place. To me, it is just part of my training.

I feel that anywhere I am, I must show a very good example, so the young ones will look up to us and say that we have made things better, so they will copy us. We are entrepreneurs, not businessmen. We create. It is not about profit. We believe that as soon as you solve human problems, you create a lot of wealth. If you are just interested in profit, you will make it in the short run, but it is not there in the long run. You must strike a balance between profit making and the society in which you operate. If you have no conviction to drive you, it will become more difficult for you to make a difference.
What is your objective? How do you think this will inspire others and other businessmen?

The way it will help is in the way we are training our people. A lot of them have paid their school fees to go to school, and they still get in touch with me. They are good ambassadors. Some of them have worked with us and have ended up in banking. They still get back to us; they are excelling in their own ways. Some of them are in the Public Sector. That is how we contribute – it does not have to be here. We do not train people who come through this institution for a particular reason – we just train them and allow them to operate. If you have a predetermined objective for doing certain things, then you will not get the benefit of the human development that comes with it. You cannot narrow down their horizon, but if you train them and allow them to blossom, everybody will benefit. To you, they are very good ambassadors.
You have also contributed a lot to the ‘Made in Nigeria’ brand. You are going to be exporting and expanding across Africa, making Nigeria a benchmark. What potential do you think Nigeria has, to become a country for manufacturing? How do you see this over the next five years? 

In 2003, with President Olusegun Obasanjo in office, I went to see him and I told him that I was going to deliver world-class products to him before he left office, and I did. I told him that this is the new Nigeria. The future of manufacturing in Nigeria is limitless.

We have simply looked at the tip of the iceberg. Lufthansa took some samples and came back a few months later and asked to have our biscuits on their planes. This further enhanced our success and they currently use our products on their flights. So do Emirates. You cannot ask for a better way to project the image of your country. 
I knew it would be like this. Manufacturing is the only way out here, and our greatness will not come from oil; it will come from manufacturing and the ability to create jobs for our people. A population without purchasing power is useless. China is strong today because they developed their industrial base. They paid their people and they have a lot of money to play around with. The Nigerian population needs to be employed so that we can unleash that potential we are talking about. We cannot do that when people are hungry, when people cannot go to school and when there is no healthcare. These are basic human needs, and that is what we try to provide in Beloxxi. I tell people that I can never run an institution where a little child that works in a multimillion dollar mine will be thinking about where to eat at lunchtime. It is not possible. If I do that, I will not create any future leaders. 
The best thing to do is to show a good example. You can go to all kinds of workshops and seminars, but they do not work. You need a solution. If you have no solution, you can talk from here to New York and the problem will stay with you. So we should go from talking about Africa in terms of potential to actions. That is what we are trying to do with Beloxxi. We are trying to face the problem of manufacturing and creating a new generation of Nigerians. I do not have any expatriates here. I sent my production manager to the United Kingdom to do a Master’s program in chemistry. He was the first African there to get a distinction in that. That to me was truly remarkable. 
At the end of the day, I think we are trying our very best. In the next five to 10 years, we will be able to achieve power stability, and then the real potential of this country will be unleashed.
How do you think you will inspire other companies to follow the same steps as you and what are the challenges of setting up companies in Nigeria?

It depends on what you mean by challenge. I will give you an example. When I started manufacturing in Nigeria, the sector was dominated by the Lebanese and the Indians. They had no interest in standards; only in the volume of interest they make and the profits they obtain from that. So when I came in, I had to create my own standards with my own philosophy. Since I started, I have been working with other Nigerians who can pick up the challenge. But it is very daunting; it is not easy. My thinking is that instead of motivating them in the biscuit sector, it has motivated them in other areas like ICT, or ancillary products like vegetable fat, to be able to supply us. It has motivated them in that way. 
Before we came in, the wrappers used in Nigeria were not aspiring to international standards, and we were the first company that insisted on importing wrappers from South Africa. Then the whole sector changed, and there were standards. There have been a lot of improvements in raw materials. There was an explosion of companies working to international standards. But I have not seen anyone motivating people to get into biscuits.
Are you interested in expanding into other sectors?

Yes. We are interested in other areas in the future. But for now, we are focused on the biscuits. We want to create a critical mass so that we can take on opportunities that will come from our efforts in the biscuit sector. We do not want to deviate too much from our core business, so that the business itself does not suffer. I have noticed that you have people creating companies without people running it very well – the company just exists on paper, and they just do it for ego trips. We just want to do one thing and do it well. Again, we do not know what the future holds. But there will be strictly passive partners, who invest money, provide advice and sit on the board. Other than that, we are not interested. We just want to concentrate on what we are doing, and see how far we can go with our basic business plan. 
In your view, what single moment do you feel the most proud of, which you would like to share with our readers in the UK?

The critical moment was when the President came to commission the factory for us. It was a very important moment for me, because it demonstrated the success of very determined young Nigerians. It was a crowning glory for us, because we were able to show that it is possible for something good to rise from this. It was very pivotal for us. This is the first time this country commissioned biscuit making. A lot of people started to look at what we accomplished in a very positive light. He made it very easy for some people to talk about young guys in important business schools. They must work hard and be very dedicated. That is what we try to share with young people. They should understand that things are not going to be easy, but with dedication, we can achieve that.
What do you think is the most important skill you have learnt over the time you managed this company?

Capability, being polite to people, listening more and sharing our common humanity. That is the most important lesson it teaches you. We are not superhuman; we do not know everything. Our job is to make sure that we bring people together and create an enabling environment to ensure that talent flourishes. You have to be very humble in order to do that. As a leader, you must learn how to listen, and most importantly you must be fair and equitable to your staff. That is the only way you can really create an institution. You will have a culture as a result. My father always told me that if you are humble, you can learn. I can learn from anybody. When you do that, you will earn the respect of your subordinates. I do not like my staff to look at me as the big boss. Most of the time I try to emphasise to them that all of us are graduates, but how we relate to other people is critical. You must be able to relate to other people and make them focus and committed in order to achieve a very important strategic goal. 
Our template is there. Our strategy is very simple. We do not need to give anyone money. If you give people responsibility, you must empower them to carry out that responsibility. To me, if you are working with people, if you have power, you only use it when you are supposed to use it. I do not have to tell people that I am the CEO of the company. If you do your work, I am your friend, and if you do not, that is when we are going to have problems. When I do it, I must convince myself that what I am doing is right. You need to empower the young people and if you populate the entire space with good people, all will function.
Have you ever thought about joining the Nigerian Stock Exchange?

We have been thinking about it, and one day we will do that. We tell people who come that we are not interested in private equity people – we are still as a company unfolding. The stock exchange is going to be the ultimate destination, so that the young people who have worked hard with me for so long can become big shots themselves, and they will begin to find out that it is possible to create a strong institution in Nigeria, sub-Saharan Africa and Africa itself. It is something that everyone is looking up to, but we are not going from answer to question; we are going from question to answer. So as long as our people do not become fixated on a particular destination, it will be unwritten. We would prefer a natural progression to that destination. 
We tell people we are not ready yet, because we do not want to dilute the culture. The young people must mature to that point. If you bring in strangers who do not share the same vision, that is a recipe for disaster. If we get there with them, we will have accomplished the first stage, in the sense that a young Nigerian will now be able to think that they can grow from scratch, with all their colleagues and comrades. We have to look at human capital development. The human aspect is very critical.