The original report was published in the Bloomberg Businessweek on Monday, March 5, 2012
Industry leader's determined approach sets the bar
Nigeria's principal biscuit manufacturer has become a role model for the industry
Nigeria's focus on hydrocarbon production to catapult the country’s economy in recent years left the manufacturing sector seriously constrained, reducing its GDP contribution from 4.21% to 4.19% in 2009 and 2010 respectively. Since 2000, approximately 850 manufacturing companies have closed down or halted production, mainly due to challenges relating to the energy supply cost (which can represent up to 70% of expenditure), transportation, infrastructure and capacity utilization.
However, Beloxxi Industries Ltd., Nigeria’s principal biscuit manufacturer, has set precedents and is regarded as a role model for the country’s manufacturing sector. It has become a premier manufacturing company with international standards, demonstrating that Nigerian companies can overcome these obstacles. “There is not a single business without challenges and our duty as entrepreneurs is to face them successfully,” believes Obi Ezeude, President and CEO of Beloxxi.
Mr. Ezeude was one of the largest importers of cream crackers in Nigeria, importing about 600 containers annually from Malaysia by the year 2000. Discussions with its Malaysian suppliers to set up shop in Nigeria fell through. In March 2003, when former President Olusegun Obasanjo banned the importation of biscuits into Nigeria, Mr. Ezeude’s business instinct made him decide to go into production.
Mr. Ezeude comments: “People say that power is the biggest challenge in the manufacturing sector and I always tell them that it is the availability of long-term funding.”
“Our product is not only designed for local consumers, it is also designed for the international market,” explains Mr. Ezeude. The ingredients come from the best available suppliers; glucose from the U.S., butter from South Africa, and oil from Nigeria.
The business kicked off in Ikeja in June 2006 in a rented warehouse. But by January 2007, Beloxxi’s impact on the market was so great that demand became overwhelming, well beyond the company’s planned production capacity.
By December 2007, after studying market trends, the Agbara project was set up and Mr. Ezeude located a 15-acre greenfield site to expand his business. On this occasion, Beloxxi received financial support from the Nigerian Export-Import Bank (Nexim). “I went to several banks with my project, but only Nexim Bank understood what I was doing,” says Mr. Ezeude.
With a team of around 500 people, Beloxxi recruits staff from the surrounding area under clearly defined criteria. Employees must possess the Senior Secondary Certificate Examination (SSCE) qualification and want to continue studying. “We only employ young workers who want to study. If you get into a school, college or university and you work for us then you still get your salary uninterrupted while you study,” says Mr. Ezeude.
Present in Ghana, among Beloxxi’s objectives include continued expansion. “My vision for the future is to be the premiere biscuit exporter of Nigeria and sell them all around Africa,” adds Mr. Ezeude.
PROJECT TEAM: Lawrence Ireton, Natalia Ulloa and Carolina Costanzo
AREA - comparative:
GDP - composition by sector:
AGRICULTURE - products:
EXPORTS - commodities:
EXPORTS - partners: