Water firm quenches thirst
A Chinese company makes a difference in Nigeria with its sustainable development project, reports Li Lianxing in Lagos
Setting up a manufacturing business in Africa is a tough assignment. But for many Chinese businesspeople facing dwindling profits at home, the lure of fresh markets and a potentially huge consumer base outweigh the difficulties.
“My company failed in China,” said Che Chao, founder and chairman of Cway Nigeria Drinking Water Science & Technology Co Ltd, which sells purified drinking water and other beverages.
“I went bankrupt because of the sudden financial policy changes in China in the 1990s. I wanted to find greener pastures, so I borrowed money from a friend and went to Africa.”
Che said after visiting several African countries, he decided to invest in a water treatment business in Nigeria, which has the largest population on the continent.
“When I came to Nigeria in 1999, I found that safe, hygienic water was badly needed. I saw this as a business opportunity where I could also help improve people’s lives.”
Che’s business has been very successful, and it has grown quickly.
“We started off as a water company. Today, we are a major player in the food and beverage sector of the Nigerian economy, producing a wide range of table water, water dispensers, milk drinks, fruit drinks and tea drinks.”
“We now have about half a dozen factories in the country, and we employ thousands of Nigerians directly and indirectly. I prefer calling us a Nigerian company and we are proud of this.”
He said his company has dealt with many Nigerians and had a positive influence on many lives. According to Che, his Chinese employees are very dedicated to their work in Nigeria and some of them have settled there.
“In Port Harcourt, for instance, one of our Chinese branch managers married a Nigerian woman and they have a baby girl now,” he said.
Peter Oyei, a 33-year-old shopkeeper and also a consumer of Cway water in southern Lagos, said the introduction of purified water has gradually changed the drinking habits of his community.
“If you had come to my community five years ago, you would have seen small plastic bags strewn all over the place,” he said. “They contained drinking water, but that water smelled strange and tasted like plastic. It always made people sick with diarrhea.”
He said that water was cheap, but it caused serious health problems, especially after it had been left in the hot sun for a while.
“More serious was the pollution, with used plastic bags strewn everywhere,” he said. “That was a difficult problem to resolve. Now the purified water has changed all that, and we are very happy with this kind of bottled water.”
Oyei said that among all the water brands he sells, Cway is one of the most popular in his community, and he is trying to get other Cway products to sell.
Che said that although the company has become popular in many households, especially its treated water products and water dispensers, introducing more products and services has huge potential.
Quality food provider
“As we know, demand for quality food is increasing as the population grows,” he said. “This situation offers many business opportunities. Our vision is to become a major quality food product supplier in Nigeria and Africa at large.
“Recently, we’ve been working on acquiring a piece of land in Ogun State to start building our own industrial park, where we will be able to develop ideas we have for more projects.”
Another reason for calling Cway a Nigerian company is that it has directly and indirectly helped local employment expand a great deal, according to Ben Gu, group managing director of Cway.
“At the very beginning of our production and marketing, we distributed the water by ourselves, but later we found it was quite inefficient,” he said. “Then we established a network of agents. We lent them some vehicles and they sold the water for us.”
The network has grown so much that it now covers almost all of the country, and the company’s products are so popular that it is now very difficult to become a Cway agent, Gu said.
Localization of workers is a vital part of the company’s long-term strategy. Cway has hired more workers who will get training in its factories, said Gu.
“For instance, our machines are all imported from China, because the equipment is more developed and has higher hygienic standards,” he said. “If we hired a Chinese mechanic, it would cost us much more than hiring a local, so we select skilled workers from vocational schools here and train them to work on our machines.”
Gu said that many mechanics can now do normal maintenance work on large machines by themselves, and this has greatly reduced operating costs.
John Joseph, a mechanic responsible for a packaging machine, said the machines were new to him but after some tutorials by Chinese specialists, he can do the maintenance now.
“If there are big problems, we still have to consult our Chinese counterparts,” he said. “But at least I am capable enough to handle most of the problems with this kind of machine. That means I could go to work for another company if there was a better offer.”
One of the worst problems for Cway has been unreliable power supplies.
“During the past 10 years, the power supply has not changed,” Joseph said. “To a certain extent, it has deteriorated. The average period of power supply is less than 30 hours a week, but our normal demand is 70 to 90 hours. So we have to pay a huge amount of money to make up for the shortfall.”
However, he said production is no longer the biggest problem. Marketing is now Cway’s greatest challenge.
“In 2000, it was a good time to enter this industry as there were only a few companies doing it and they had very basic technology,” Joseph said. “But now the industry has become so competitive that it would be almost impossible to enter it. ”