‘Nigeria’s economic challenges are opportunities for business growth’
Mr. John Coumantaros, Chairman, Flour Mills of Nigeria (FMN) Plc, is no newcomer to doing business in the country. He is at the helm of affairs of one the biggest food brands in Nigeria that has been in operation since the late 50s. In an interview with COLLINS OLAYINKA during the just concluded Nigeria Economic Summit, he spoke on the opportunities inherent in the Nigerian economy. Excerpts:
How does the operations of Flour Mills of Nigeria Plc, Group (FMN) fit into the theme for this year’s Nigerian Economic summit which is ‘opportunities, productivity and employment: Actualizing the Economic recovery and growth plan’?
FMN has been in business in Nigeria for 57 years. The company has since evolved into a Group with direct and indirect investments in the foods and Agribusiness sectors of the economy, employing more than 11, 000 persons, and actively contributing to the Gross Domestic Product (GDP) of Nigeria. A lot of FMN’s business operations can very easily relate to the theme of this year’s summit. Our business is creating a lot of opportunities every day for many families across several states in the country. In agriculture alone, we have created numerous opportunities for farming – cassava farming and processing in Kwara state, our sugar plantation in Niger state, palm plantation in Edo state and in different regions of the country where we are aggregating, processing and selling agro services.
On an average, we store over 600,000 tonnes of grains all over the country that include maize, soya beans, sorghum, local wheat, oil palm and cassava. These cultivations involve between 200,000 and 250,000 farmers throughout the country.
What are the challenges confronting FMN’s operations in Nigeria?
There is nothing in life that is easy. There are difficulties everywhere there are humans. What is required is discipline, perseverance, determination, long-term thinking and planning. That was the philosophy of my late father who saw the long-term vision of where the nation was going and where Flour Mills Plc. could partner to help her growth; and I am very proud to align with that vision.
What are the factors that distinguish Nigeria from other African countries in terms of doing business?
At FMN we are passionate about developing many new industries and breaking new frontiers. For example, with our soya beans crushing facility, we managed to export nearly 100,000 tonnes of soya bean meal last year for the first time in the history of this country. This was something that was not possible before that time. We have the first margarine plant in the country. We have one of the largest animal feeds operations not only in Nigeria but also in sub-Saharan Africa. We have created value added opportunities that were never there before. There is enormous potential for growth in Nigeria; the country needs to grow and process her food. It also needs to find ways of doing that better with quality seeds, better fertilizer application, better agronomics skills and better control of its mineral resources. FMN has always been at the forefront of developing new innovations because of the opportunities that are inherent in Nigeria, her resources and the economy.
How much of your manpower is sought within the country?
I will say about 97% of our manpower is sought within Nigeria. We rely on foreign expertise in the areas where we need technical competence and only where such competence is not available in the Nigeria. I am proud to say that Flour Mills of Nigeria has one of the best workforce not only in Nigeria, but also in the continent of Africa..
Are there opportunities for small-scale farmer to participate within the business chain of Flour Mills?
I think it is a misconception to say that large-scale commercial farming is harming small farmers. On the contrary, large-scale farming is what will enable small farmers to really grow. The only reason we entered farming in the first place is to ensure we secure our basic raw materials. We very much bank on the small-scale farmers and encourage them to do well. We always see ourselves as an enabler for the small-scale farmers to flourish and grow. It is a misconception to think that large-scale commercial farmers and small-scale farmers cannot co-exist. I believe that once they cooperate, 200 or 300 farmers can come together to produce on a large scale, which is another form of large scale farming because small-scale farmers are aggregated.
How can Nigeria produce enough food to feed her citizens and even for export?
I think Nigeria is already doing that because we exported about 100,000 tonnes of soya beans meal last year. We also exported local garri and cassava and we are also working towards developing other local content.
What are the plans to make FMN able to play more dominant roles in the food industry going forward?
Our strategies are very clear. We are one of the foremost food companies in the country and we are also one of the most prominent agro allied groups in the country. We would like to continue to be the most efficient and profitable agro-allied concern as well as one of the most profitable and more efficient food business outfits. We would like to drive our local content to the highest possible level so that we are not dependent on imported raw materials and we will continue to remain innovative and create products that cater to the Nigerian market driven by local content. We would like to flood about 400,000 sale outlets throughout the country with our goods. We would also like to reach out, aggregate and collect raw materials from as many points and suppliers as possible. So, our focus is really to reach our consumers, reach out to our customers and connect with them with our goods and services.
How badly is the economic recession imparting on the profit margin of businesses in Nigeria?
The economic climate is difficult and turbulent. But at FMN, we have a robust result in our second quarter this year. We expect the trend to continue. I think that the Nigeria economy is stable at the macro level. There is now a good foundation on which future growth can be built, and it offers a growth-base for the diversification of the economy.
We are set for the upcoming economic growth of Nigeria. I think the government is doing a good job by encouraging the private sector to be a partner in building the economy.. I see a good effort in bringing this into the building of infrastructure such as roads, concession of rail and silos. I think government is reaching out to the private sector to help build the critical infrastructure and critical logistics. These are necessary to move the country forward because creating opportunities; productivity and employment depend on good infrastructure and logistics. Lack of good infrastructure and logistics would take away the needed employment because doing business would be more difficult.
I think one of the challenges in this economy is the high interest rate at 21% or 22%. The much-needed investment would not happen at the expected level with such interest rate. In order to mobilize the necessary resources to carry out requisite investment, Flour Mills would soon embark on a Rights Issue, probably early next year. This will aid our expansion and create new avenues for the overall development of the Nigerian economy.
What would you want to see of Flour Mills Plc. in another two decades?
I would like to see Flour Mills as being not just the largest food and agro-allied groups in Nigeria, but I would like to see it as the biggest pan-African food group centred in Nigeria. I would like to see a group that employs not just capable Nigerians and Africans, but the most capable leaders in the business world.
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