It is not easy for SMEs in Nigeria to secure bank loans – Dennis Okorie

L-R: Annabelle Degroot, managing director, International Breweries Plc; Dennis Okorie, winner of IB’s distributors National Award; Adaobi Okorie, managing director, Mac-Den Ltd, and Godwin Oche, national sales director, at IB’s distributors’ gala night held in Lagos, recently.

Dennis Okorie is the founder and chief executive officer of Mac-Den Limited, a major distributor of alcoholic beverages in Nigeria. With over 18 warehouses located across the country, Mac-Den is one of the biggest distributors of International Breweries PLC products. In the 2019 edition of distributors gala hosted by the company, Mac-Den clinched first prize as the best performing distributor and went home with prizes, including a six ton canter truck, a Tata truck, tricycles and the star prize of the night; a Prado SUV, 2018 edition. He spoke on the journey so far. Excerpts.

Congratulations on being the best performing dealer for 2018. Please tell us about yourself and how you started this business?

My name is Dennis Okorie, I am from Ihiala in Anambra State and I am a business man. I started the distributorship business in 2012 in Ihiala. That was where I had my first warehouse and from there, I began to expand until I moved to Enugu where I continued to manage the business in Enugu and Ihiala. We currently have about 18 warehouses across the country and we still have plans to open more branches in other areas, including Lagos state where we currently have two warehouse locations.

So how did your relationship with international Breweries PLC begin?

When I started the business, it was on a very small scale and as a young man I was looking up to those people who have been in the business before me and striving to be like them. I was one of the youngest distributors then. But with the zeal I had and the determination to work hard and succeed, my efforts did not go unnoticed by International Breweries. They started supporting me with vehicles and other things I needed to grow.

Is the business very capital intensive?

This business is not what you will just start without much preparation. Yes it is capital intensive but it also takes a lot of determination and the Grace of God. We thank God that we began to make headway and gradually began to expand. Loans are very difficult to come by and even when the bank gives you a facility, the interest rates are very high and it is very discouraging. But we continue to persevere and give it our all.

You just won a brand new SUV and loader trucks for yourself as the best performing distributor of 2018. How will these vehicles impact your business going forward?

I will say kudos to International Breweries and they should keep it up. For us to win this award it means we are doing something right and I believe we will double our performance  next year. It is very good of IB to present these things to us because it will motivate us to work even harder and serve our customers even better. We are confident that we will clinch more prizes by the time they host us to the C19 awards.

What is your assessment of distribution and logistics in Nigeria today and to what extent has this situation affected your business?

For logistics, we are doing very well just that the challenge we have currently is offloading our products. We currently don’t have forklifts in all our warehouses but thanks to International Breweries, they have promised to deploy some forklifts to those places where we need them the most.

Aside from infrastructure, what other major challenges do you face as a distributor in the country?

In Lagos for instance, for us to move from Agege where our warehouse is to Isolo, it takes a long time because of the traffic situation. Traffic in major cities is one of the biggest factors that impede us from meeting out targets and meet customers demand in good time. Other than the traffic situation, the road network too is a problem. Some roads can be quite narrow and we will need smaller trucks to ensure that our products get to the customers. As it stands now, we still require different trucks for our different operations and that is why we are happy with the truck we won during the award ceremony. Another major challenge we face is having good and honest drivers who will not try to short-change the business in the course of doing their job. They move your goods to sell but at the end of the day the returns will not equal the goods sent out and they are not able to account for difference. It is a major challenge for most distributors but we try to find a way around it so the business keeps moving.

Are there any major regulatory/ government agency challenges you face as a distributor?

We do not have any problem with the government or its agencies. We pay our regular charges due to government and our taxes so we do not have any issues at all with government.

What advice will you offer young entrepreneurs who are desirous of success?

I will advise them to be hard working and not be discouraged especially when they see bigger distributors who may have been in the business for more than 20 years pushing volumes. They should believe in themselves and not be intimidated by the people already in the business.

What is your staff strength like?

Currently, we have about 300 staff in total across all our warehouses and about 15 of them are in managerial positions that handle the day-to-day running of the business.

As CEO of Mac-Den Limited, your head office is Lagos. How do you coordinate all your branches efficiently?

We have a system that we operate and with this system, we are able to have a bird’s eye view on our operations nationwide. We are even planning to upgrade the system so that from here, while I am in Lagos, I can easily know what is happening in my other warehouses, how the trucks are being loaded and moved and so on. In addition, International Breweries has promised to support us with DMS software that will make coordination even more efficient.

How easy is it for you to get loans from the banks?

It is not easy at all to get loan from banks in Nigeria as a small and medium scale enterprise (SME) owner. This is why I am really grateful to international Breweries because they give us credit facilities with which we do our business. It is with this facility that we are able to succeed at what we do. Getting loans from banks are not only difficult but the interest rates are cut-throat and that erodes the profit margin. As long as we trade with the facility granted us by IB, we enjoy profits but with bank loans, the profit margin is very small. Don’t forget that for a business such as this, one needs to get vehicles, pay staff salaries, coupled with the issues we have with bad truck drivers and so on. Remember also that the trucks will have to be serviced. Sometimes our trucks go to the mechanic causing delays in supply and so on. By the time you take bank loans, you may end up servicing the interests before the facility is due for repayment and will most likely end up not recording much profit. So here, IB has really come to our aid and their facility to us is helping in no small measure.

Any last words?

First of all, I must thank God for everything because he is the one that has been my help up to this position where I currently find myself. Considering my humble background, I never knew I will  be a big time distributor of International Breweries products and for this I am eternally grateful to them and to my family, especially my wife who has been a huge support and understands the demand the business sometimes have on my time.

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