Connect with us

Business

“I Received Order For $4 .7M Cars From Sierra Leon After NASS Rejected My Vehicles”

Published

on

images 89 "I Received Order For $4 .7M Cars From Sierra Leon After NASS Rejected My Vehicles"

I received order for $4.7m cars from S/Leone after NASS lawmakers rejected my vehicles– Innoson
…’Motorcycle price was crashed from N150, 000 to N60, 000, trying to do same with cars’
…Explains why auto assembly plants in Nigeria collapsed
Chief Innocent Chukwuma is the Chairman/Chief Executive Officer of Innoson Vehicles Manufacturing, IVM, a foremost automobile maker in Nigeria.
In this exclusive interview after a facility tour of his Nnewi automobile factory, Chukwuma reveals the secrets behind his success in the automobile industry, why he has never failed in any business ventures, his major challenges, his new factory in Imo State and planned partnership with a foreign company. Excerpts:
Some Nigerians still think that Innoson is just an assembling plant and not a car production company. What is your status?
You are here now and you have seen things yourself. Let me use this opportunity to say this once again; Innoson does not assemble vehicles, we manufacture. We build 100 percent vehicle body here and over 60 percent of the products used in manufacturing the vehicle are gotten from Nigeria.
We make all the carcass of all our vehicles here. We only import some engines and electrical components but produce all the plastic parts here. We have produced many new vehicles according to the demands of our customers and what they need those vehicles for. Even if they need what we do not have, we make the mould and produce their request and to specifications. That is why we are a vehicle manufacturing company, not assembling company.
Despite the challenging terrain of the automobile industry in Nigeria, you have succeeded in
Yes, I started this business from the scratch. So, it may not be out of place to say that I have made a name for myself. However, I still believe that I haven’t reached where I want to be. It might interest you to know that I never fail in any business I have ventured into.
This is because when you go into any business, you have to put your own ideas in it and when you do, the difference will be clear and you can make more money than others. You can also drop the business when you think there isn’t much interest in it again. So, to succeed in any business, don’t follow the crowd, always bring your own initiatives. With that, you will be able to make profits.
That has been my driving force, always looking for new ideas that are different from what everybody knows. For example, when you are into a particular business and it is no longer as lucrative and profitable as it used to because many people have ventured into it, you can leave the business for those people who lack ideas and go into a new business. This is because, as they are coming into the business, the profit margin will continue to diminish. So you leave it for them and find another fresh business idea to develop.
By the time they understand or realise how profitable the new idea is, you have already made your money and leave it for them. However, if the business is still convenient for you and gives you what you want, you can continue.
But if you feel that what you are getting there is not enough, leave it for those people who came to spoil it and develop a new one. That is the system I operate. I started trading in motorcycle parts with my brother. I started by buying from companies like Leventis that were importing the parts then. From there, I started importing myself. Later, I developed a complete motorcycle and not just the parts. I was the first person to develop complete motorcycle in Nigeria.
Because of my experience in the spare parts business, I found out that to bring motorcycle parts and couple them here in Nigeria was cheaper than bringing them as a complete motorcycle. So I decided to give it a try and it worked. I brought my own in parts and hired local mechanics to assemble and couple them. With this, my own cost was 40 percent cheaper. So, while others were selling at N150, 000, I was selling at N80, 000. Then, the cost of second hand motorcycle was N90, 000. People who used to buy second hand motorcycle decided to be buying my own since it was brand new and cheaper.
That’s how I benched my competitors who were selling at N150, 000. So, they had no choice than to adopt my strategy in importing their motorcycles. When they started copying my method, I veered into local production of plastic components of motorcycle parts so that I could be bringing only the iron components from abroad.
This also helped in bringing the price of my motorcycle down to N60, 000 which has been my aim from the onset. My competitors also discovered that it was better for them to buy plastic components from my company than bringing it from abroad. So, they started buying plastic components from me. With that, I left the motorcycle business for them.
Venturing into vehicle manufacturing
After some time, I decided to do what I did in motorcycle in vehicle. So, that’s what I’m doing today. I ventured into vehicle manufacturing immediately I became weak on motorcycle. I changed my focus to vehicle. I studied about vehicle production for about seven years before I could start. When I was building this factory, all my good friends and everybody I knew were asking me why did I venture into the business?
They said all the people who ventured into it in Nigeria failed. I told them to check all the businesses I have done, that none has failed. Before I entered into vehicle manufacturing, I have seen why others failed. And I told them that I would remove that which made others to fail and I did. That’s why I started by manufacturing and not by assembling. The people who failed started by assembling vehicles in Nigeria. And in that case, if anything happened to the parent company, the assembling plant here would lose because foreigners are not interested in building anything here.
They are coming to Africa to make profit and not lose, they want to make as much profits as possible and go. They are not interested to build us.
So, to avoid the pitfalls of others, I went and studied where we had problems and I paid for professionals, expatriates who came here and trained my people. I brought them to Nigeria, about 60 of them, in the first year we started this factory. Some of them finished under one year and left by the second year, I had about 42 and in the third year, I had about 15. Today, I have only eight.
Most vehicle manufacturers are switching from petrol to electric engine. Are you thinking in that direction?
I never built engine for the first time. I only build body and buy engine. What we do here is building complete motor body. Therefore, if electric is better, what I will do is to partner with electric company to supply me electric engine. And in that case, I won’t lose anything. If electric vehicles become the new normal, we’ll switch over to electric
Where do you export to? Do you supply your vehicles to other African countries?
Yes. As of now, I have order of about $4.7million worth of vehicles from Sierra Leone. That’s what I’m producing now for Sierra Leone government. Normally, I do get order and supply from within and outside the country.
What kind of support have you received from the Buhari government?
The Federal Government is doing everything possible to support the manufacturing sector with good policies, but the problem lies in the implementation. They have done enough in terms of policies to support local content but, like I said, implementation is the problem. So, I won’t say that government is not helping. They are doing their best. If you look at the policies, they are favourable.
How’s government, especially the legislature and the executive, patronizing your company based on the ‘buy Nigeria, grow Naira’ mantra?
Didn’t you see what happened at the National Assembly recently? They decided to buy Toyota cars made in Japan, that they are too big to drive made in Nigeria cars. Didn’t you hear it in the news?
…I heard it. I also heard that it was the member representing you that objected to buying your vehicle…
I don’t know about that. Whatever the person representing me said doesn’t matter to me. All I know is that was the decision of the National Assembly. Anything all of them agreed is what they will do. You can’t tag it to somebody representing me because he’s just one person and he can’t decide for the entire lawmakers. So, if the NASS decides anything, he can’t stop them.
What would you say has been your major challenge in this business?
Well, in manufacturing, there are a lot of challenges. But when you know that such challenges would come, you make provisions for them because, if you don’t have space to accommodate any challenge, one or two problems will force you to close shop. Any manufacturer will tell you about energy or electricity situation in the country.
When we were starting the factory, we knew we had such problem. So, we planned it in such a way that power situation will not affect us. There was a time we didn’t use electricity from the national grid for four years. I ran generator for that four years.
The issue was that the electricity company was over-charging me. They were giving me more bills than what I was supposed to pay because it was based on estimated billing. They failed to realise that we have engineers here who can calculate what we use. We asked them to install prepaid meter for us but they refused. So when they wanted to act smart, we wrote them officially to disconnect us.
We bought four different sizes of generating sets for the factory according to what we were doing then. We were running the generators eight hours each everyday for four years until the electricity company agreed to install a prepaid meter for us because they found out that they were losing. So they brought prepaid meter for us and we paid. So, electricity has been our major challenge but we made provisions from the outset to accommodate it.
Another major challenge is scarce foreign exchange. It has become increasingly difficult to access foreign exchange to import some of the components we use. How can you be telling the President that you need foreign exchange? I know from his speeches, he wants manufacturers to get but some of us don’t get. We find it difficult to access foreign exchange, we don’t get at all. How can you be doing black market to do manufacturing? It is difficult. That’s why we are focusing more on export now to get foreign exchange to enable us to continue to run the factory.
What about the South-East governors, do they patronise you as one of their own?
Well, I will say that they are doing their best and even the Federal Government is doing its best in patronizing us. However, if all the South-East governors are like that of Imo, then, we don’t have problems. The present governor is number one in implementing the local content. He deserves an award for that. Go to Imo, all the vehicles they are using are made in Nigeria. So Imo has got somebody in the governor who knows what’s good to do and we appreciate him for that.
Have you considered partnering or merging with known foreign vehicle manufacturers?
Well, most of them want me to partner or merge with them. Yes, we are looking into it. I’m going to open a new factory in Imo in partnership with foreign companies. I believe the partnership will help us to develop motor manufacturing on a bigger scale in Nigeria .
Is Imo government supporting you in that project?
Yes, Imo State government has indicated interest and they are supporting us. So, with my foreign partners, we will work together and develop it there.
Talking about siting of factory, what informed your choice of siting your factories in the South-East instead of the commercial city of Lagos?
Commercial city of Lagos is too busy. I want where there will be space for manufacturing. I’m also looking at the proximity with my other companies because, the way our companies were set up, factory A can produce something for factory B and vice versa. Another reason is for easy communications and management. I’m not interested in any particular region, be it South-East, South-West or North. It doesn’t matter to me. After all, I’m from Anambra but I have only one factory in Anambra, I have one in Enugu and will soon have one in Imo and Edo. Gradually, we’ll reach there.
Nigeria’s first indigenous vehicle manufacturing company, Innoson Motors’ G40 SUV.
Do you have any interest to contest for political posts such as President, governor?
Let me make it clear here that I am not a politician and I’m not interested in politics. I am a manufacturer. I will be an industrialist until I become weak. When I grow old I go home and retire. I don’t have time for politics. There are people who are politicians, let them continue with their politics. And as for the 2023 presidential election, I’m not interested in who is coming out. When the time comes, I’ll make a choice among those contesting. And I don’t know who I will vote for; it depends on who comes out

Continue Reading
Comments

Business

Petrol supply fell by 23.88% in July, says NNPC

Published

on

images 19 3 Petrol supply fell by 23.88% in July, says NNPC

The volume of petrol supplied in the country declined by 23 .88 per cent in July to 1 . 02 billion litres, according to the Nigerian National Petroleum Corporation.
The NNPC said the 1 .02 billion litres translated to 32 .95 million litres per day , down from 44. 62 million litres per day in June , when 1 .34 billion litres were supplied .
Data obtained from the corporation showed that 0 . 95 billion litres ( 30 . 67 million litres/day) were supplied in May and 0 . 94 billion litres ( 31 .37 million litres/day ) in April.
The Federal Government imposed a lockdown on the Federal Capital Territory , Lagos and Ogun states on March 30 but a gradual easing of the lockdown began on May 4 .
In March and February , the volume of petrol supplied stood at 1 .73 billion ( 59. 72 million litres/day) , up from 1 .20 billion litres in January ( 38. 68 million litres/day)
“ The corporation has continued to diligently monitor the daily stock of Premium Motor Spirit to achieve smooth distribution of petroleum products and zero fuel queue across the nation , ” the NNPC said in its latest monthly report .
Agusto & Co , in a recent report , noted that the impact of the COVID – 19 pandemic on economic activities in the country resulted in a decline in the consumption of petroleum products .
The report said , “ Agusto & Co . expects the consumption of petroleum products , particularly PMS and Aviation Turbine Kerosene , to decline to 27. 2 billion litres in 2020 given the severely restricted travel and transportation activities during the second and third quarters of the year .
“ This is expected to translate to a decline in revenue to N4 . 3tn in 2020 .”
Nigeria , Africa ’s largest oil producer , relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years .
The NNPC has , until recently , been the sole importer of petrol into the country for more than two years , after private oil marketers stopped importing the commodity due to crude price fluctuations, among other issues .
The refineries , located in Port Harcourt , Kaduna and Warri , have a combined installed capacity of 445, 000 barrels per day but have continued to operate far below the installed capacity .
Under the Direct Sale Direct Purchase scheme , selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC .

Continue Reading

Business

FG Adds Emirates To List Of Banned Airlines

Published

on

images 9 2 FG Adds Emirates To List Of Banned Airlines

The federal government has withdrawn the approval granted to Emirates to conduct international flight operations in the country.
Hadi Sirika, minister of aviation, disclosed this via a post on his Twitter handle on Friday.
The ban will take effect on September 21, 2020.
The Nigerian Civil Aviation Authority (NCAA) had, in a memo earlier in September, included Emirates in the list of approved airlines for international flights for both Abuja and Lagos airports.
But the minister said the decision to reverse the approval was taken after a meeting of the presidential task force (PTF) on COVID-19 with European Union ambassadors on Friday.
Sirika also said there were discussions on the ban on Lufthansa and Air France-KLM.
“The PTF sub committee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st Sept. 2020,” the minister wrote.

Continue Reading

Business

Union Bank supports 10 NGOs with N1.7m through UnionBetta donations

Published

on

images 1 1 Union Bank supports 10 NGOs with N1.7m through UnionBetta donations

Union Bank, a leading financial institutions, has again delivered on its promise to support charitable organisations with a portion of proceeds from the UnionBetta savings product.  

Launched in 2016, UnionBetta is a sub-account which allows Union Bank customers earn attractive interest rates for saving for as little as N5000 monthly. In return, the bank donates a percentage of the interest earned to select Non-Governmental Organisations (NGOs) on behalf of its customers.

In selecting the recipients, priority was given to NGOs making impact in areas such as gender equality, education, talent development and agriculture which are key pillars of Union Bank’s citizenship efforts that align with Sustainable Development Goals (SDGs) 1,2,4, 5 and

This year, a total of One million, Seven Hundred Thousand Naira (N1.7m) was donated to 10 different charitable organisations to help support their activities. Some of the recipients include United Methodist Church of Nigeria Orphanage, Jalingo; Zinnok Initiative for Women & Children, Abia; Teens Dream Initiative, Kwara and Lagos Food Bank Initiative. Others include Uduak Charles Diaries, Akwa-Ibom; Flexisaf Foundation, Abuja and Adolescent Friendly Research Initiative & Care, Ekiti.

Continue Reading

Trending