Chekwas Okafor, founder at ONCHEK, a Lagos-based garment manufacturing company, in this interview with BUNMI BAILEY discusses Nigeria’s underutilised local textile industry, challenges and steps to take to revive the industry. Excerpts:
As a local player in the textile industry, what can you say about the industry?
Many players in the textile industry blame imports for the failure of the textile industry, and thus, favor banning imports. Bans tend to mask the real problems and since we don’t end up solving the problems, imports/smuggling persists.
Also, if we ban products that can’t be produced locally to meet the local demand, it further encourages smuggling. I understand the need for market protection; thus, the high tariffs and banning, but these alone, won’t solve the industry’s problems.
Our industry is just not efficient. We have to fix that. A robust and fledging local textile industry operating at a world-class efficiency level will curtail smuggling and imports significantly, simply by existing.
The efficiency gains will make products much more affordable for the local market and will discourage merchants from importing. Merchants honestly don’t like importing. They import because they have to. This is good news for the Nigerian textile industry.
I am very optimistic about the textile industry and believe the stars are aligned right now for the industry to be revived and sustained. The solutions are within our control. The market is there and the infrastructure is there, so any investment in the textile industry will have outsized returns in the shortest period of time. There won’t be any need to build new facilities.
We also have solved the most competitive part of the value chain- quality garments. We have achieved world-class efficiency levels in this garmenting sector; therefore, can outcompete finished imported clothing.
What was the inspiration behind ONCHEK?
ONCHEK started in 2016 as a New York-based e-commerce company for African Luxury Fashion, where brands like Zashadu (Nigeria), Maxhosa by Laduma (South Africa), Adele Dejak (Kenya), etc. were marketed to the US/European market.
In 2018, the company collaborated with Nigerian designers to design and manufacture Super Eagles inspired jersey collection with respect to the ongoing 2018 FIFA World Cup.
It was during this manufacturing process in Nigeria that I learned about the underutilised local cotton value chain- the shrinking Nigerian grown cotton, the textile companies running under capacity, and the skilled tailors without jobs.
In order to revive this collapsing textile industry, I decided to create a product that utilises Nigeria’s cotton value chain. We started by manufacturing plain t-shirts under the brand name, Merok. We commenced operations in Nigeria in January 2019.
Our products are mostly customized by printers for marketing campaigns, political campaigns, religious celebrations, fashion, etc. Merok t-shirts are sold across Nigeria- Lagos, Aba, Kano, Onitsha, Abuja, etc.
What are the challenges you have faced and how have you navigated them?
Since the collapse of the textile industry, most companies have shut down. Local cotton production from small holder farmers has also plummeted alongside local demand. Having limited textile manufacturers in the industry has affected ONCHEK’s growth potential.
This is why ONCHEK is committed to vertically integrating its operations to textile manufacturing. By vertically integrating, it can increase textile production, not only for its internal use, but also for other local garment companies.
The company is committed to reviving the entire Nigerian textile industry by vertically integrating its operations.
Sourcing foreign exchange for production is one of the major challenges manufacturers face in Nigeria. Is that a problem you face as well?
Thankfully, we do not have to source foreign exchange because 100 percent of our supply chain is sourced locally in naira.
Despite the past government’s efforts in reviving the local textile industry, it is still in a state of Muribond as imports have doubled in three years. Why have the policies failed?
One of the biggest challenges with the prior industrial policies targeting to improve the Cotton Textile Garmenting (CTG) sector is simply implementation. In recent years, the Central Bank of Nigeria, through the Anchor Borrowers Program, has put some commendable effort in reviving the CTG sector, but with mixed results.
Effort, by itself, is not good enough. By approaching this in a more active manner, the entire textile industry can make Nigeria a textile powerhouse hub in less than 10 years.
The only thing stopping us from being a textile power house is will. Not land, farmers, or skills. Just will. All those textile mills that were built in the 1970s/80s are still there. Some are in better shape than others. The government, in partnership with the private sector, can revive these mills, starting with the mills that closed recently (5-10 years) because their equipment won’t be too outdated and the talent will probably still be in the area.
Since the taxpayers are partly responsible for reopening the companies’ doors, it is only fair that there should be some sort of transparency & accountability for the factories’ managers. A reputable and independent organization can serve as auditors to ensure taxpayers’ money is used efficiently.
Over time, efficient clusters will grow and expand, while inefficient clusters will contract. Inefficient clusters must be collapsed into efficient clusters. This consolidation will bring textile companies into better management.
Growing the industry will require intentional actions without relenting. It is too important for our country that we are missing the opportunity to create value for ourselves.
Are there enough local textile producers in Nigeria?
No, we don’t have nearly enough operational textile producers in Nigeria. This is, in turn, affecting the growth of garmenting companies that want to surge locally.
Since the collapse of the textile industry, most companies have shut down. Local cotton production from small holder farmers has also plummeted alongside local demand
Most textile producers have shut down due to myriads of reasons- inadequate management, importation of cheaper Asian clothing, lack of access to capital, improperly implemented policies, etc.
What opportunities does local textile production hold for the country?
The textile industry can play a significant role in our efforts to increase employment share from the industrial sector. This is because making clothes is labour intensive as it requires a lot of people.
For example, a small garment factory with only 12 sewing machines can directly employ 100 people. This garment factory will consume 24 Metric Ton/month of local cotton, while creating even more indirect jobs at different cotton value chains.
Also, with labour cost relatively low, Nigeria can easily become a textile powerhouse in this West African region. This will enable the country to export to other markets and earn export revenue. With all the efforts to diversify our economy, the textile sector can be a phenomenal success in 5-10 years.
This is simply because we have the infrastructure and supply chain here. We can quickly grow our output as we don’t have to build new factories across the country.
We can simply retool and optimise the ones we already have for now. We will start with the cotton value chain as it plays to our strength. Once Nigeria masters this value chain all over again, the export market will inadvertently push the country’s textile sector to create other textile value chains- sustainable fibers, man-made fibers, recycled fibers, etc.
By manufacturing textiles locally, we build the foundation for more complex manufacturing. Textile manufacturing tends to lead countries into long term industrialization. Light manufacturing is the foundation to complex manufacturing.
For countries like the United Kingdom, Germany, America, and East Asian Countries, etc. clothing manufacturing played a significant role in their journey to industrialization.
I am certain that can be the same for Nigeria. Finally, Nigerian made 100 percent cotton products are cheaper than imported cotton products. This can pave a way for big import substitution for cotton products in Nigeria, thereby positively impacting our foreign reserves. Nigeria spent $4.4 billion in importing knits/non-knits into Nigeria in 2021.
Our textile industry is capable of supplying these to the local market.
Do you export to other countries?
No, we currently do not export because we haven’t even been able to meet the local demand.
How do you source your raw materials?
We buy our raw materials (fabrics) from a local textile company here in Lagos. They in turn buy their raw material (cotton yarn) from a local supplier also here in Lagos. That supplier buys its raw materials (cotton yarn) from a ginnery in Katsina.
The ginnery in Katsina buys its raw material (raw cotton) from cotton merchants from different parts of the country- Zamfara, Gombe, Adamawa, Katsina, etc.
Our supply chain is whole and fully Nigerian. This is exactly why its revival will be paramount for our local economy.
What tips or advice would you give entrepreneurs who want to enter the textile industry?
Starting with one product has played a very big part in our growth. By starting with one product, it was easier to make the product very well and very efficiently; thereby, improving cost and competitiveness.
As the organisation grows, more similar products can be added. Finally, prioritise people. Nothing works without people. Building a company culture where people are valued creates the most resilient organization to grow through tough times. Treat people well and they will treat your business well.
Where do you see your business in the next five years?
Within the next five years, ONCHEK would have vertically integrated its operations to help expand into new product categories including undergarments, polo shirts and tank tops. We would have started exporting at scale to neighboring African countries, North America and Europe. We expect to have directly employed a minimum of 1,000 people.
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