As the colonial era in Nigeria was winding down in the late 1950s, there was a very measurable level of optimism within the country. The oil industry – the country’s present mainstay – was in its infancy and the Nigerian economy was mainly industrial and agrarian. There were demonstrable hopes of a major African industrial hub emerging out of Nigeria; which everyone believed was inches away from becoming an industrialised nation.
Innoson Group in a changing economic context became a formidable business entity on which other businesses depend today.
Employing up to 7,300 workers, Innoson Group excels in five manufacturing companies all under the umbrella of Innoson, with Innoson Nigeria Ltd. assembling motorcycles, Innoson Technical Industry Ltd. The biggest plastic manufacturing company in Africa. Innoson Vehicle Manufacturing Companies deals with auto-making; the products are pick-ups, 50-70 seater buses, SUVs and others. Innoson also has a part that manufactures motorcycle tires. You would try to equate Innoson Group with likes of Dangote Group if its manpower is approaching 10,000.
Loan and FOREX Issues
Bank of Industry really comes to the aid of Nigerian manufacturers. When the commercial banks stopped lending to businesses in Nigeria, Bank of Industry started providing funds for manufacturing and for agriculture in Nigeria.
“Bank of Industry has really helped us. It’s only this bank that has given me loans. We are on the seventh loan process and I’m paying back the money loaned me.”
The dollar used to be 160 naira but now it is over 300 naira. “If you were buying a truck load before, now you may only be able to purchase a half load. Now, if your capacity for production is a truckload, and you don’t even have the money; then there is a big problem.
“Exchange rates affect everyone in this country. Students are also included. The federal government has been able to make sure that every Nigerian that seeks for foreign exchange at the banks can get it. We are not worried as far we can get it,” he said.
However, with the recession still biting hard, it is hard for companies like Innoson to measure up as per financial and profit targets.
In view of this, Innoson Group is able to manage challenges of bank loans and FOREX issues effectively. At a certain time, it was not easy. At that time, Central Bank of Nigeria was not giving out what bidders wanted but now CBN does.
National Automotive Design and Development Council
A 1993 Act established the National Automotive Design and Development Council to among other things, regularly study and review the automotive parts and components development industry in Nigeria. The council is doing more these days in order to introduce globalization to Nigeria more than in the past by opening up foreign direct investment opportunities in the auto sector in Nigeria.
When asked whether he sees this as a challenge, Chukwuma said he doesn’t see this as a threat.
“They can come. It is better for us to have a lot of auto manufacturers here to boost the Nigerian market and promote our economy. If they set up their plants here, it means that we will be producing everything here; we will not need to go abroad again. I’ll be happy about that.”
Talking about local content, he said: “At Innoson, we have 97 percent Nigerian workers, and three percent expatriates. There was a time I had 70 expatriates working for me. Today, I have only 25. These expatriates are training Nigerians. Whatever the Nigerians are able to do, we don’t need them anymore for that. So we expect that number to still go lower,” he told Business & Economy Review.
Innoson Motors
Innoson Vehicle Manufacturing Company (IVM) introduces automotive products from China, Japan and Germany. Its product line includes heavy duty vehicles, middle and high level buses, special environment friendly vehicles.
The company carries out optimization design and assembly according to African road condition so as to produce suitable products at affordable prices. The company also provides good services for repairs and parts supply. All these actions are engineered to meet the customers’ special requests, attain the highest possible performance and safety standards and also make the vehicles suitable for the African market.
“I don’t produce vehicles for Nigeria or for West Africa alone. I want my vehicles to be bought all over Africa,” the CEO clarified with an air of triumph. Little wonder, Innoson Motors recently went continental as Mayor of Bamako led a delegation from Mali to Innoson Vehicle Manufacturing, Nnewi to purchase about 400 Innoson Motors.
“I believe we will export vehicles to all parts of Africa after a short while,” he said.
Today, Innoson is making vehicles at all levels. There are cars that are expensive and there are cars that are cheaper. It is not a one-size fits all things; everyone can decide to purchase what he or she is capable of purchasing. As for expansion plans, Chukwuma made it clear that there can’t be such for now, except there is a provision for soft loans. Would it make sense for a company to embark on expansion when there is no money to fund its full capacity for production? To meet up with expansion, Innoson will need a capacity for funding.
In the near future, when harsh business realities of the recession is toned down, Innoson will have a factory set up somewhere in Nigeria in order to fulfill the Nigerian dream of local content as far as the auto industry is concerned.
“I can set the factory up anywhere. The best location for me is the place where I can get raw materials. I will definitely set up the factory here in Nigeria.
“I believe that the Nigerian atmosphere is very good for manufacturing. That’s why we are still in business. One of the best things to do in Nigeria is to engage in manufacturing. The federal government is also giving manufacturers the attention they need. We are happy about that.
“We have travelled around the world. We have seen how things are done and we know that Nigeria is a very good place to live. This country has everything we need to succeed. All you need is knowing how to survive in it. All we hope for is that government should do the right thing to make the economy stable again,” he concluded.