Affiong Williams: Low consumer purchasing power affecting businesses
Nigeria’s peculiar economic environment makes start-ups almost uninspiring, as entrepreneurs need to push even much harder than their peers in other climes to scale up their trade and become profitable. This is because they have to contend with a plethora of issues ranging from poor policies to support their businesses to dearth of infrastructure, especially power, and also lack of access to finance to equip and re-tool. But Affiong Williams, the Founder and Chief Executive Officer of ReelFruit, a fruit processing, packaging and marketing company focused on being the ‘leading fruit agribusiness in Nigeria’ is undaunted.
Affiong Williams started out her business in her flat with an initial savings of $8000 dollars in 2012. The company retails a range of dried fruit and nut snacks through a variety of channels while also exploring the export market. In 2016, the company sold 500,000 packs of snacks. The story of the company resonates with the vision of its founder, as a brand that starts locally but creating global impact.
In this interview with FEMI ADEKOYA, she talks about her business, challenges, successes and outlook for the Nigerian and global markets.
Can you give an insight into your journey into entrepreneurship?
When I started my business without ever having done anything with fruits, not even from my agribusiness landscape, one of my main goals was to hopefully build a business that could sell Nigeria to the world. It is still a goal of mine and it is something I have been pursuing relentlessly and we are almost there. We have sold abroad, but we want to be in many countries in the world and I strongly believe we can do it and hope we will be the first. One other thing I want to achieve is to be a link for non-oil export based businesses. I hope that if I can be an example to encourage more businesses to look beyond Nigeria as a market, we will be doing a lot of fantastic things in the country.
When I first started my business in my flat in Surulere, it was not a big business and to be honest, I developed a lot of courage and I was also nervous during the early days of my business. This is due to the fact that you do not know if people are going to like the new product being introduced into the market, and people are also asking you if that is your only job. I definitely struggled with the bravery to actually see the potential but the validation from the market helped as customers liked the product and people were approaching us. One thing that actually made me go further was trying on something by faith hoping that it works out, but sometimes it does not. After achieving some things, you have to learn the lessons and understand them to apply on the next stage especially as we continue to grow.
In terms of access to funds, what has been your experience and which option is better between debt and equity for entrepreneurs?
I have been struggling for a long time to raise money and still struggling to do despite growing at an amazing rate in the country. Even with the recession we are still growing, so it is really tough and there is no easy access to raise money. What we have basically done is to rely on friends and families. We have got a few grants, but I still believe that there is a lot of room to really get SME (Small and Medium Enterprise) lending right, especially equity investments where entrepreneurs are given enough funding, support and time. This is because what I have achieved in five years in Nigeria, will take me like two years to do in any other country.
I guess it is a call to the financial institutions to actually know that SME funding definitely needs a more aggressive look beyond just asking for collateral.
How has the business been able to survive the recession?
In terms of recession, we have had to look at the export market. What happens when the Naira is weak is that all of a sudden you become cheaper to sell to countries abroad, so you are actually more competitive and we found out that it happened with us as well. Before, selling abroad may have been out of our reach because we had a stronger naira, but with a weaker naira you are actually able to sell abroad more easily and can actually compete with other markets because all of a sudden your currency is weak. So it is actually not a terrible thing if we can look at appropriate markets and obviously planning and being more resourceful to identify other markets for which you can create products. Looking at the global markets and earning foreign exchange puts a Nigerian company in a very strong position, and as an entrepreneur planning a business, you can look at a component of that business being international.
What are some of the challenges you encountered in the course of setting up your business?
There are a lot of challenges; people talk about the lack of infrastructure, which makes a lot of African businesses not competitive. But even beyond infrastructure challenges, power and human capital among others, the current economic and macro situation in the country is basically precluding investors from coming into Nigeria. Raising capital to grow where you could actually overcome these challenges has become increasingly difficult because the market and international funders don’t believe that the macro-economic status of the country is stable. We currently have flip flops in the area of policy among others. This has real impact on existing business owners in trying to raise capital both locally and internationally to grow our businesses. This makes it even more difficult for us to grow businesses that can scale; that can be even more profitable and more efficient. But one thing that definitely I think is urgent and I see the government trying to solve, is the fact that people want to know government’s stand economically. For instance, what are the economic policies? And I think that hurts us a lot and will take us a lot more time to recover from.
Having been in business for a while, how are you dealing with consolidation and competition in the industry?
Well, you know somebody made a very interesting comment that in Africa, your competition is non-consumption actually. For some products, it is actually not other businesses but the fact that people don’t have money to buy your products and we have focused on the issue of people in the middle and upper class, that is, people who have disposable income to purchase our products. You know there is competition bordering on other things they could be doing with their money and for us, we are trying to overcome this in a couple of ways. We have continued to give them good and quality products and also try to come out with other products that can address new markets, and we are looking at more products for the lower income segment, and we are also looking at other markets as a way to defend our business.
We are definitely focused on export and we are going to be, hopefully, concluding a few deals to send our products abroad, which is my dream and one way to also be more buoyant. You know competition is real and I think you know in Nigeria, we have been fortunate that demand has been growing. We are the leader but I also believe that we need to continue to innovate and bring out new products and continue to give customers quality products and to look out for new markets.
You mentioned consolidation; one of the things we are doing is backward integration and to that effect we have actually started a farm in Kaduna, where we are growing mangoes because we understand that raw material challenges are big and we want to solve those problems. So we are starting a farm with 50 workers and mainly women, to continue to grow the mangoes that we need to help our processing and keep pursuing being more competitive in terms of price and in terms of access to raw materials. So we are trying to be more productive; we are trying to increase our productivity game by doing all these things in the value chain but also focus on market growth among others.
What is the company’s present level of local raw materials sourcing?
We source our products from different places and different countries. We get some products from Ghana, while some are sourced locally. What we are finding is that as we scale, supply is becoming a big challenge, so we are trying to own that as much as possible; and as we expand, we make sure that we don’t run into a problem where we have demand but we don’t have the supply to meet it. Like I mentioned that our farm project is one way that we are trying to secure our supply of mangoes, and we are also going round the country trying to meet other farmers that can give us consistent supply and quality supply as well.