Musa Joseph, Managing Director, Vitavisco Nigeria Limited, a subsidiary of Vitafoam Nigeria Plc, speaks on the state of manufacturing sector, how Vitavisco is navigating the uncertain operating environment, and how Federal Government can protect the local industries to operate optimally, writes Iheanyi Nwachukwu. Excerpts
How would you assess the state of manufacturing sector in Nigeria at present?
There are three critical elements that can drive or slow the manufacturing sector in Nigeria, depending on how they are managed by the government. These are energy supply and pricing, forex availability, and taxation.
As scarcity of forex lingers, and because the manufacturing sector depends largely on dollars to import raw materials, many manufacturing concerns have continued to shut down. Some have started selling off the little raw materials they have and are laying off staff.
They would rather buy dollars to keep than to keep producing at a loss because price increases are currently not keeping up with overall daily increases in manufacturing cost. For those still running the plants, volumes have dropped. This is ultimately leading to scarcity of manufactured goods in the market
What’s your take on multiple taxation?
Undoubtedly, multiple taxation is still a major challenge – federal, state, local government and local councils all impose one form of tax or the other. No economy can grow through excessive taxation. The Federal Government should not tax few operators to death. Sustainable growth will come only through continuously improving productivity. The government should rather pursue both widening and deepening the productive net instead of fixation on excessive and business disenabling taxation. These and more are the challenges we are also facing in Vitavisco. But we remain positive, and continue to nurture creativity and drive innovation which factors have been key to our successes.
How is Vitavisco navigating the challenges in the manufacturing sector to remain competitive?
We have always placed premium on knowing our customers. We are highly diversified and keep on innovating. We operate effective management of cash flow and focus on our core competencies among others.
What initiatives or government policies should the government deploy to create a more conducive environment in the real sector?
The critical issue is how to increase more participation in the real sector across all industries to drive productivity. The economy cannot grow relying on rents and taxes, especially where the organisations available to pay the taxes and rents are few. There should be deliberate implementable plan to make forex available to manufacturers at reasonable rates, boost power production, with high priority giving to supply of power to the manufacturing sector and stream lining of the taxation system. There is also the need to protect local industries through the custom tariff system, which should be made to favour goods that are locally produced and skewed against imported products that can be manufactured locally.
How has Vitavisco maintained profitability and operational efficiency in the face of rising inflation, high production costs, and decreased consumer purchasing power?
We have continued to thrive against all odds through continuous innovation, efficient raw materials sourcing and efficient manufacturing processes.
Highlight the main products offered by Vitavisco, and the unique benefits they provide to the automotive industry
Vitavisco manufactures automotive foam required for comfortable seating solutions in vehicles.
Are there any upcoming product innovations or plans for market expansion that you can share? How do these initiatives align with your growth strategy?
In a couple of weeks, Vitavisco will be opening its Physio Experience Centre to the public. In addition to offering consultation and treatment services, the centrewill be a one stop shop for physiotherapy products including physio foam products that are manufactured by the company.
The company has also invested in a modern polyurethane foaming plant which will also soon be deployed to enhance the company’s share of the shoe sole market in Nigeria. These are strategically aligned to the company’s overall growth plan.
What step is Vitavisco taking to educate consumers about the benefits of using high-quality automotive parts? How do you enhance consumer awareness and trust in your products?
Our company participates in industry events from time to time. We have invested in world class laboratory, which is a reference in the country. This is in a bid to provide quality products and services to our customers at all times. We think this is the best way to create trust for our products.
The National Automotive Design and Development Council (NADDC) and the African Association of Automotive Manufacturers (AAAM) recently toured auto parts manufacturing companies in Nigeria including yours. What insights or opportunities did these visits reveal for the Nigerian automotive sector?
The visit was encouraging and our hope is being renewed in the sector that sooner or later the vision for the Nigeria automotive industry will be realised.
What are the primary challenges currently facing manufacturers of automotive parts in Nigeria, and how is your company addressing these issues?
While the government has established policies to support the automotive sector, there is a lack of legal and legislative frameworks necessary for effective enforcement and implementation. As a result, the market does not currently offer sufficient justification for local investment in this sector. Furthermore, the absence of incentives to make local production of automotive parts a viable business has led several organizations, including ours, to either reduce operations or cease activities altogether. In contrast, companies like Vitavisco have successfully adapted by repurposing our facilities to manufacture non-automotive products.
What specific measures should the government implement to foster a more supportive environment for automotive parts manufacturers in Nigeria?
The recently revised government policy for the sector is a highly commendable document. The next most important action is the legislative backing of the national assembly to give bite to the policy for ease of implementation. The proposed provision of automotive industry consumer credit scheme would be another major action required to fully catalyse sustainable economic activities in the sector. Most of the challenges will be resolved by these two actions.
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