David Wright is the managing director of Chemical and Allied Products (CAP) plc, which fully operates in the coatings business providing a wide range of quality products and services. In this interview with Oluwasegun Olakoyenikan, Wright highlights plans of the newly constituted board to broaden the company’s footprint, not only geographically but also in terms of products, to become a dominant player in the Nigerian paint market and also play significantly in the African paint market.
It’s been about four months since your appointment as managing director of CAP plc took effect; what should stakeholders expect from the new management?
The stakeholders should expect that we’re going to have a much higher profile going forward. CAP has been a bit of a slow burning company over the last few years and is producing good results as well as paying good dividends, but not really growing significantly in the marketplace. So, our aim is to raise the profile and also boost the business. We got a new board in place which is taking quite a long time for the business to put together because they wanted to be very specific about bringing in people who were both passionate about growing the business, but also brought in the skills that would help the business grow.
We had our first board meeting of the new board last month, and I’m sure that you saw that we rung the bell in the stock exchange to notify that we had a new chairman. For me, the key in that first board meeting was that the board members are active, they participate and when we talk about specific issues, they actually bring in experience that’s going to help us in the future. They are also very strong on corporate governance. They want to see this business not only thrive but also do it in the right way. They are also very keen on sustainability. There are lots of questions about what we’re doing with the community, what we’re doing to sustain our business, both from an environmental impact point of view, but also from creating a business that will grow in the future.
So, I think there’s a change and that’s why we now have a very active board and that will be reflected in the amount that you see us in the media, the amount of interaction we will have with the stock market in the future.
Obviously, you have put together a strong board. How do you intend to harness the individual strengths of the members for corporate good?
I think there are a number of aspects. First thing is that they are all very keen to be involved in the business. They are not only just attending board meetings, but they are actually getting involved in what we are doing. They come from a diverse background, but all their experiences are linked to our business. So whether it’s strong finance or acquisition or investment background or whether it’s real estate, they all bring something different to the table which can enhance different parts of our business going forward. But I think the key for me is two things really. One is their enthusiasm and the second is determination. We are going to create a company here that’s going to grow significantly in the future.
I understand that you have invested so much to form this new board. How soon should stakeholders expect yields from this investment in top level human capital?
We are going through an investment phase at the moment; the business has kept itself quite tight over the last few years because the market has not been good. So, they focused on making sure that the business creates a good solid base. We will be investing quite heavily in the coming year. We are upgrading our IT systems to SAP HANA in the cloud which gives us access to our business systems and from any location, which means we can then implement Point of Sale data capture. We’re moving to Microsoft 360 to give us better communications and we’ve just launched our new website. So there’s significant investment and moving forward over the next year, we will start to see benefits from that during the year. Realistically, it’s going to take some time to get things in place. I would expect us to start seeing some significant gains probably towards the end of 2020.
We also invested in distribution. It’s key that we get our products out to the customers. At the moment, we have 25 Dulux colour sensors. We will have 27 by the end of this year, and our aim is to add another 12 in 2020. The focus is that we have a good product, we have a good top-of-mind recall for the Dulux brand, but at the end of the day, you’ve got to get the product in front of the customers. So we will be investing in distribution quite significantly and we will probably be investing significantly in Caplux, which is our second brand.
Following what you’ve invested in structures and IT, what should your customers look forward to?
Our customers will see a very significant difference. With our existing colour sensors, we are probably 75 percent of the way through our refurbishment programme, which is bringing them more up-to-date. Going forward, we’re looking for new colour ranges that will be in the Dulux range, introducing some new functional products – things like anti-mosquito paint, damp shield and anti-mold paints, both in the Dulux range and the Caplux range. We’re also looking to introduce new interior design tools into our pillar sensors so that it helps people make the right choices for their homes. If you take it all together, over the coming few years we will see new products and new services which will help people create colourful exciting spaces. We have our aim to grow this business to be a significant player in the African paint market. In order to do that, we will need to broaden our footprint not only geographically, but also in terms of products. At the moment, we only play in the decorative range, so we will always be looking for the opportunities.
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Are you also looking at exploring opportunities at least in the ECOWAS region?
Recently, we had a workshop with our people to talk about what our vision for the future is and we came up with the slogan, “Creating a New Africa Inspired by Colour”. At the moment we only play in Nigeria, and we first need to look at dominating the Nigerian market. We have a strong market position with the Dulux brand, but we intend to grow that so we become by far the major paint company in Nigeria. We have responsibility for a number of export territories with Dulux, so we will plan to start exploring those regions this year. And then, our aim is to start exporting of Dulux and Caplux into those territories. Our next target is really to go sub-Sahara, and then, hopefully, further expand into Africa over the coming years. I would hope that we will be exporting into our export territories before the end of 2020.
Given your vast experience, why did you opt to work in the Nigerian market, particularly CAP plc, at this time?
There are a few things that really draw me to Africa. One is, for some reasons, it has always been on my list of continents that I would love to work in. The opportunity here is amazing. Africa is the last frontier for coatings industry. The coatings industry on a global basis is dominated by a handful of companies. However, they’re not really in Africa. There may be in South Africa, but coatings industry doesn’t really exist here. So this is still a market where local companies can create a position that in the future can have a dominant effect when these global companies come.
For me, my experience is generally about growing businesses across many industries, but the match of an untapped market and the potential to grow motivate me quite strongly. But also, CAP is in a great position. It’s got a solid foundation. It’s got 60 years of history. It’s got a great backing with UAC. So everything is in the right place to really launch this company and move it to the next level, which is pretty exciting stuff. Related News
There are a few things that really draw me to Africa. One is, for some reasons, it has always been on my list of continents that I would love to work in. The opportunity here is amazing. Africa is the last frontier for coatings industry. The coatings industry on a global basis is dominated by a handful of companies. However, they’re not really in Africa. There may be in South Africa, but coatings industry doesn’t really exist here. So this is still a market where local companies can create a position that in the future can have a dominant effect when these global companies come.
For me, my experience is generally about growing businesses across many industries, but the match of an untapped market and the potential to grow motivate me quite strongly. But also, CAP is in a great position. It’s got a solid foundation. It’s got 60 years of history. It’s got a great backing with UAC. So everything is in the right place to really launch this company and move it to the next level, which is pretty exciting stuff.
The Nigeria market is peculiar. How does it compare with other markets where you had worked?
Paint makers across the world are different but they’re the same. They’re different because you always have local peculiarities. The climate in Nigeria is different from the climate in the Middle East, so you have to modify products to match the local requirements. For instance, because of the humidity as a result of the way temperatures are here, you tend to get high mould growth, bacterial growth and fungal growth, whereas in the Middle East it is hot and dry, you don’t have that problem, so you modify the products. But essentially, paint is there to protect and there are buildings everywhere in the world, so the application is pretty much the same.
The other part is the development of the market. At the moment in Nigeria, the market is not very heavily developed. For instance, in the construction industry there are lots of small players rather than one or two big players. That’s what keeps the major multinationals away because it’s a difficult market to play in, but I believe that CAP has a great market position in that it’s a very well known company, its brands are very well known and there’s a lot of loyalty to the brand. So, it’s a good place to start to grow from. The market is slow. It’s coming out of what I would see as a pretty bad time. But everything is moving in the right direction. It will very quickly gain momentum. So, I think it will be good to be at the front now than when we get that momentum going.
Given your diverse experience, what good strategy could work for CAP plc at this time?
We have pretty simple high-level strategy. We want to grow our volumes. We want to grow our sales channels. We want to grow our portfolio, and we want to do that through investing in our people and improving our efficiencies to drive the business and to create the domination we want; we just have to make sure we sell more paints. In order to do that, we believe that there are two main drivers: one is to grow the channels – that’s increasing the number of colour sensors entering into the projects market, finding new routes to market. It’s key that you have the product, but it’s also key that you can get it to the customer.
We want to grow our portfolio to make sure we have products that meet all needs – whether it’s increasing the functionality of the product or whether it’s creating products at different price points so that we can have products for everybody’s spending capacity. In order to do that, we need to make sure we have the right people, we need to invest in our own people or we need to bring in people where we need extra skills, but we believe that the people are what’s going to create the experience for the customers. And then we want to be, if you like, the cheapest cost producer. We want to improve our efficiencies dramatically.
What are the greatest challenges facing the chemical and allied industries in Nigeria?
There are a lot of challenges. The biggest challenge I see personally is the speed of change. Things are a little bit slow here. If we want to stay ahead of the competition, we need to drive change as fast as we can. Restrictions, legislation, currency controls all have a way of slowing things down. Now there’s still some uncertainty in the market. It’s a slow market and it’s not started to grow significantly, but I believe that will change.
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What is your strategy for surmounting these challenges for CAP plc or converting them to opportunities?
I think it’s simple. My role here is to coach and empower the people we’ve got to achieve the goals. There’s no shortage of desire. This committee has a great image and people enjoy being part of this company. What we’re going to do is empower the people so that they can actually achieve their full potential.
CAP plc reported an improved financial performance in 2018. What plans are on ground to sustain the trend?
The financial performance of the business has been steady; I would say nothing exciting but no failures either. We’re going to take some risks going forward. We don’t want it to be steady in the future; we actually want it to be exciting and exceptional. Our aim is to grow our volumes substantially in the future. We need to do some investment to get there. But I would say that if our plans come off, the growth in our business will finance the investment we need so we will maintain the growth in our financial performance.
The company paid dividend to its shareholders in 2018 with its entire net profit. What informed this decision and what should the company’s owners be expecting this year?
The business is here to support our investors. We will pay the maximum dividends we can. The idea is to grow a business in a way that we can self-finance our investment in the growth. Our aim is to make sure that we have a business here that is sustainable for the next 60 years, and sometimes you have to invest to do that.
