MURPHY: THERE IS INCREASING OPTIMISM ABOUT THE NIGERIA ECONOMY
support government private company partnership. I am not going to wait; we will keep pushing ahead and doing our own thing.
With this international recognition I want you to review the market in Nigeria and the projections with our population, how do you see the future of the mattress industry?
In every four African there is a Nigerian, 25 percent of almost the population of the continent is Nigeria. We are getting an increasing level of urbanisation; people are moving from the country sides to the inter-towns or cities. We have a big young population in Nigeria, we got population growth, there is a growing middle class, some of the economic indicators I am looking at yesterday are suggesting an improving consumer disposable income, so all the fundamentals of growth population, urbanisation, GDP per capital growing, disposable income growing, an increase in consumer spending, all those fundamentals are there and increasingly I go back to the stability I was talking about earlier, those are all the catalyst to attract foreign investment.
But while I am here those are all the indices that give me confidence and that the right thing to do is to continue to invest because there is an expanding market opportunity out there and that is true; not just for the Mouka brand, I think that is true for all manufacturers of consumer goods.
How do you manage competition with other industries?
Firstly for Mouka consumers, we offer products in all prices brands, we got a luxury of category of products that we make available. We have also got product that is the middle price brand; it has market, prestige products and then we have the economy sector of the market, if I can call it the value proposition. So we got a product offering which is reachable for all Nigerian consumers regardless of their income point. We compete in all point of the market, yes there are some small relatively low priced local players but we have got national and improving reach of distribution. We have distribution partners where we are talking directly with the consumer. As I mentioned earlier, we have significantly improved our marketing investment, it means that we can reach all consumers at all price points.
What is your short term and long term expansion plan?
As we continue to grow from a manufacturing capacity perspective, we start to grow out of our current capacity and that is one of the mid-term challenges that we face, which is how and where we are going to increase our manufacturing capacity. And we are actually currently working through some feasibility in terms of how and where we build to that additional capacity.
How were you able to hold on to your workforce despite the fiscal challenges in 2016?
Yes; as other companies retrenched we retained. And what we are doing today is not possible without Mouka people and I can underline that. When I look at Mouka our total head count within the company is up to 800 people and one expatriate. And I think that is commendable to say that Mouka is 99.999% true indigenous Nigerian company, manufacturing Nigerian product for Nigerian consumers. And as I keep saying it is the Mouka people in partnership with the Mouka distributors that are really meeting the needs of the loyal and new Mouka consumers. But Mouka people are in the heart of it. In the next five years are you likely going to increase the number of raw materials you source locally?
Well, as we continue to grow naturally we continue to increase our procurement needs and be procuring locally. We are actually working at one of the initiative at the moment. As you mentioned local procurement is there are some small and medium local enterprises which find liquidity quite a challenge. They could grow the business but they don’t necessarily have the capital to grow the business. And we are actually working with one finance partner to see how we can help some of our small SMEs suppliers to improve the liquidity of their business. Talking earlier of how we partner with our distributors; that is obviously on the route to market side, but the supply to Mouka side in terms of local suppliers, we are looking at a number of initiatives there. We are actually piloting one of them at the moment in terms of how we can help improve their liquidity so that they can strengthen their businesses and that brings us back to sustainability. You know talking of changing suppliers; we would rather build long term supplier relationship.
How have you been accessing funds?
If I look back to the beginning of 2016, I would say when I was entering the fourth phase because if you look back to the first half of 2016, the modus operandi through which one procured funds at that time was primarily through your bank and through CBN. Post June 2016, it was a completely different scenario into the importation of derivatives I mentioned earlier, the forwards and futures that is regarding to the beginning of this year, there is a slightly changing scenarios. And now we are into a new phase, post late February when CBN started making more forex available to the market and then with a new forex last week end. So going back to the point I made earlier, one has to be able, agile and ahead of the turf in other to gain from the opportunities when they become available. But where we are today is significantly different from where we were this time last year in terms of the procurement of forex. Those who stood still have suffered, those who tried to get on board and get ahead of the game are actually benefiting from the situation.