Since the 1970s, Tolaram Group West Africa has had operations in Nigeria spanning from manufacturing to distribution of goods. In a CNBC Africa TV interview monitored by BusinessDay’s Bunmi Bailey, Pawan Sharma, the CEO of the company discusses the COVID-19 realities and how it is impacting the company.
How have you managed the COVID-19 pandemic across your business segment and globally?
Since early this year, the pandemic has severely disrupted the societies and businesses in Nigeria and globally. And as countries and businesses are striving to cope with the crisis and implementing their response strategies, we have tackled some of the challenges like crude oil prices resulting in weakened economy and currency devaluation which is fuelling the high inflation in the period of recession and shaking consumer confidence.
And due to the lockdown in many states in the country, the supply chain has been totally distorted. Even the companies which are importing their goods are stuck at the ports due to congestion. Another important element is business risk, as most of the businesses were not prepared to deal digitally but now they are operating remotely so their systems are not robust and open for cyber threats.
Our businesses are wide spread through West, South and North Africa. We have more than 20 manufacturing plants in Africa and the majority of our business is basic food business which falls under essential & necessary items. We are making sure that in this period, we should serve our customers regularly to keep the food inflation as low as possible. Our businesses are almost fully backward integrated, so we did not face much challenge from the supply chain side and we could still supply all the food items to market. Though the cost of doing business has gone up and eroded our margins, currently our objective is to serve our customers at as low a cost as possible.
The other priority is to take care of our employees. Wherever it is possible most of them are operating from home and in case of a manufacturing plant where workers have to come to factories or a logistics team where they have to move out to deliver the products, we make sure all the hygiene and safety protocols are followed. We invested a lot to provide required safety gears and hygiene solutions to all our employees. To our employees and colleagues around the country who have bravely come out to work and bring daily food to the table of millions households, I say big thank you to all of them.
In terms of investments, you are doing quite a lot within the Lagos Free Trade Zone. Can you tell us more about that?
Tolaram operates in three major verticals which are consumer goods, digital space and infrastructure. Under the infrastructure vertical, we are developing the Lagos free zone in Lekki. In the first phase of development, we are providing all infrastructure and utilities for industries to operate and in the second phase, we will be developing residential parts in the Lagos Free Zone.
It is an 800 hectare land area which will be developed in phases. We are attracting a lot of Foreign Direct Investments into the Lagos free zone. Currently, three multinational companies have put up their manufacturing plants there and have been operating smoothly. I see that place becoming an industrial hub in the next five years which will surely help the country in generating a lot of employment and improving its economy.
What is your outlook for the rest of the year?
This year seems to be difficult in terms of business growth and profitability. We are looking at how we can help the communities we operate in. We want to make sure that no job is lost despite making losses in the business. In the past, we have seen many turbulent times and have come out stronger, though this time due to pandemic a lot of uncertainty is there but being an agile group, we will keep upgrading our strategy to handle the crisis.
We are still bullish about the future of the country and that’s why all our investment plans are still on. They have been delayed a bit due to pandemic but we are not backing off on any investments.
Tolaram played a major role in supporting the Government at different levels in Nigeria in arresting the scourge of COVID-19. Can you tell us more about your experience?
Tolaram group is closely working with CA COVID-19, a special committee formed to coordinate federal and state responses to deal with the fallout of the pandemic.
At Tolaram, we have contributed N1 billion and a lot of our food products to support the committee. This committee has been establishing the isolation centres, providing medical equipment, providing feeding support to almost every state in the country and working closely with the state govt.
Prominent personalities in Nigeria which we are happy to be part of and helping communities. Other than this, we are donating millions of food packs to the people in Lagos, Ogun, Ondo, Osun, Edo, Kaduna and River State so far. Lot of other Non-Government Organisations and food banks have approached us to support the communities for feeding programs. We have joined hands with all of them. Mostly daily wagers who were affected had no means of earning. We made sure we can provide them daily food at least.
Are there other big infrastructure projects planned by Tolaram Group for the country?
Our Lekki Deep Sea Port project is a Joint Venture with China Harbour Engineering Company Limited (CHEC) and next to Lagos Free Trade Zone. Anyone operating in Lagos free trade zone will have direct access to the port. This offers a lot of logistical advantages, which is why many companies are interested in establishing their manufacturing facilities in the zone.
At the end of March, when the entire world was and still going through COVID-19 pandemic we received the funding of $221 million from one of the stakeholder “China harbor Engineering company” (CHEC) Investment during this pandemic and this shows the confidence of Tolaram and all other stakeholders in Nigerian economy and policy framework. Though currently, most of the states are under lockdown to control the spread of pandemic, we have also put the construction on halt temporarily.Once the pandemic situation improves and lockdown opens up, the work will start in full swing. It will ease down the pressure on Apapa port.
Where do you see Tolaram Group in the next five years?
In Nigeria we are focusing a lot on backward integration to have local raw material for our manufacturing setup. Agriculture is the one field where with less investment you can create more jobs.
We have gone into Palm Oil plantation and cassava plantation which will be supporting our manufacturing plants and reduce the import of raw materials. We have got 15,000 hectare land for plantation purposes. It will create thousands of jobs and save foreign exchange for the country. The Central bank of Nigeria has come up with many lucrative schemes to support backward integration plans.
