Naira devaluation is boosting exports to other African countries – Odunaiya, Wemy MD

Paul Odunaiya, Managing Director/CEO at Wemy Industries Limited, a Nigerian company that produces hygiene products, speaks in this interview with BUNMI BAILEY on how the recent naira devaluation is helping local companies. Excerpts:

Tell us about Wemy Industries, some of its major products, and how the journey has been so far?

Wemy is a wholly owned Nigerian company that was established 44 years ago in Isolo Matori, Lagos by the late Pastor Ademola Wemimimo and Aderonke Odunaiya. It was the first company in Africa to manufacture baby diapers.

But over the years, we have expanded our product segment by producing disposable baby diapers, adult diapers, maternity pads, baby wipes, face masks, and underlay pads.

The company has gone through its share of growth spurts and business crisis over the years but it is growing strong, currently having over 400 employees, and generating over seven billion naira in revenues per annum.

Our brand name ‘Dr Brown’ was coined by our founder as a differentiation to a similar English brand called ‘Dr Whites’. Most especially because we are “Brown” people in Africa.

The company is one of the foremost indigenous and oldest established manufacturers in Nigeria, what are some of its achievements since inception?

We are the first to manufacture adult and baby diapers in Nigeria and we have won a number brand awards for our products. Wemy completely moved from trading and manufacturing to 100 percent manufacturing as a business in 2017. But the greatest achievement is the commencement of exports to other African countries since 2020.

How were you able to navigate those challenges and turn them into opportunities?

Over the years, we have learnt to study the environment well so as to spot opportunities. In Nigeria, we have some comparative advantages like human resources especially the highly skilled ones.

For me, I have a team of highly skilled people where we sit down and think of ways to run the business in terms of minimising costs and maximising profits.

We also spend money on needs not really on wants like people and machineries. We try to cut down on waste and look for monopolies within our business.

The company is constantly looking at ways to improve and make it more efficient to survive the harsh macro-economic environment. For example, we are the major players in the production of baby wipes in the country.

Although we import the raw materials to produce it, while others are locally sourced, we produce the cap of the baby wipes to reduce cost.

So, we look for little things to make our business more efficient. No matter how small it is, you look for that little change.

Read also: Nigerian banks’ investment securities grow 76% on naira devaluation

What has kept the business running at a time when manufacturers are either leaving the country or closing shop?

In the midst of the crisis in the country, there are opportunities. My vision for the business is to be a multinational one in the country. And if you have a long-term vision, the kicks and thrusts that come along with running a business is something you should expect.

But despite the challenges, I still see that vision. We have learned to thrive in spite of the insufficient support from the government.

During one of my trips to Cameroon, I discovered that they did not have any adult diapers in the market. I spotted the opportunity there because of the high stock of diapers in Nigeria that we couldn’t sell.

Apart from that, we have built various businesses and leverage various ideas to cope with the economic challenges.

How do you source your raw materials?

Although we source almost 80 percent of our raw materials from abroad, we are constantly looking for ways to reduce that dependency. Currently, we have a plan to do some backward integration by producing one of the key raw materials which is called non-woven, a material made from petrochemical products like raisins.

By doing that plan, it would help to reduce our raw material imports by about 55 percent, which will further help the business.

You talked about exploring trade opportunities beyond the shores of Nigeria. Can you list them?

For now, we export to three African countries such as Ghana, Mali and Cameroon. And we intend to increase the number to others like the United States of America and the United Kingdom. We had to do detailed research to know the opportunities in those African countries.

The devaluation of our currency actually helped us to enter those markets more because of the strong value of the West African CFA franc against the naira.

Are you saying the naira devaluation is easing your access into these markets?

There is no doubt that our weak currency is helping our businesses in terms of exports. If your currency is weak, your goods are cheap and that means a country with a stronger currency can easily buy your products.

Read also: Failed start-ups and the Nigerian business environment

Wemy is the first manufacturer of adult diapers in West Africa. How was it able to achieve that?

We were able to achieve this because we had a vision and we invested in it. In 2016, when the FX crisis started, the company’s revenue was not good enough and we had a lot of debt. So, we had to invest in the adult diaper business because we saw the opportunity in that space to improve our financial performance.

That is why I would advise any manufacturer to invest where there are opportunities. We saw the foresight and vision because of the fluctuations in the FX market.

Last year, when the same pattern in the exchange rate was happening, we saw a massive demand for our adult diapers. People were buying from us because they could not find it in the market and we were producing locally.

Importation is hard but local manufacturing will always win because they use less FX and the products are local which will make more volumes thereby employing more people. The only difficulty is that its capital intensive.

How do you stay ahead of your competitors?

We stay ahead by being a good listener to the markets, being humble, doing a lot of research, travelling and making good decisions.

If you make lots of bad decisions, you will be out of business. So, you have to ensure that you make good decisions most of the time.

The decision of the future of Wemy is to expand our adult diaper business and there is research and science to back the reason for that.

How has your company contributed to Nigeria’s economic growth and development?

I think we’ve contributed a lot in terms of jobs and taking care of women. A lot of women do our business because they understand it, they are carers in their homes and they have babies.

We have also created women entrepreneurs because they understand the business. The company has about 350 strong workers in Nigeria that we constantly train. If we didn’t exist, courtesy of my father, a lot of us wouldn’t have a job including myself. I might still be abroad and not come back home.

But we have a big vision for ourselves and we hope and pray that we will be able to execute that vision despite the challenges.

You recently won the 2023 best baby diaper award; how did that happen?

I would say the marketing team achieved the award. We have been around a long time and baby diapers are one major part of our business because it is what started it.

We have been providing good products for a very long time. So, it’s not the first time that we have won this kind of award. My team has done their work and the rewards have come through.

What implications does the fluctuating FX rate have on manufacturers and how can they thrive?

The cost of production will continue to increase and you know what that means for prices of goods. So, businesses should invest in inverters and solar panels as part of their energy mix, which many countries are already doing. That is the only way because energy is one of the vital inputs in manufacturing.

Do you think the country has fallen behind in terms of tapping from the African Continental Free Trade Area benefits?

We have learnt not to focus on this agreement because many countries including Nigerian do not adhere to them. The surviving Nigerian businesses have learnt to cope and thrive in spite of government inadequacies in power and ease of doing business; despite government promises to resolve them.

Although we are always hoping for the best, being sceptical about governments trade incentives and plans has served us well.