We supply cheque books to banks in Nigeria and other African countries – OKONKWO

Nigerian government and businesses spend huge amount of money printing sensitive documents abroad annually. With the coming on board of Superflux Nigeria Limited, the nation is poised to save a significant part of the foreign exchange by patronising well-equipped local businesses. In this exclusive interview with TELIAT SULE and CHIJIOKE ONYEOGUBALU, the MD/CEO of Superflux, GABRIEL OKONKWO shares his experience and the milestones achieved thus far. Excerpts:

Give us a brief background about yourself, Superflux International Limited (Superflux) and the range of services you offer?
I spent well over two decades working in the banking industry. The last years of my career in banking were in Internal Control, Information Systems Audit, and Project Management, etc. But most importantly as it affects my current role, I represented my bank as a member of the MICR Technical Implementation Committee at the Central Bank of Nigeria (CBN) and played a very important role in the writing and implementation of the 1st version of the Nigeria Cheque Standard which came into effect in 2006. I joined Superflux in 2007 as Group Head, Business Development. My initial role was to develop a solution and sell same to the banks for the total outsourcing of their cheque management production to Superflux, conduct training on cheque fraud detection and prevention and to carry out forensic analysis on successful cheque fraud with a view to helping the affected banks to unearth and track the perpetrators.
The story of Superflux cannot be told in one newspaper interview.

The full story will be told at the appropriate time. Suffice to say that Superflux International Limited is the leading secure and commercial prints solutions provider to major financial institutions, government agencies and other corporate organizations. The founding fathers had a vision of what they wanted/intended to achieve. This was anchored on two clearly defined philosophies: (i) CUSTOMER CENTRIC – which makes us to listen, understand, proffer and execute solutions. (ii) INNOVATION AND CREATIVITY – which has over the years helped us develop initiatives which made us pioneers in various product/solution initiatives. We are also known for our core values of integrity, execution and process driven thinking. Incorporated as a limited liability company in 1995, Superflux International Limited commenced operations in 1998 in the marketing of security prints products. Superflux has since grown from a 2-man trading company at inception to about 300 employees in a purpose built ultra-modern manufacturing facility. It has since become a conglomerate with interests in courier and logistics services in Nigeria and Kenya, and with well over 200,000 sq. ft. warehousing space in various parts of Nigeria. We also have a subsidiary operating as an agro allied business.

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Can you tell us a bit about your secure printing services? What percentage of the market do you control?
We are the dominant player in the supply of cheque books to banks in Nigeria and other African countries. We have since 2008 taken off the burden of maintaining MICR/Cheque Management centres from about 18 of the 23 banks while we also print cheque base stock for the remaining ones. In addition, we print certificates, transcripts and examination papers for educational institutions; Receipts including revenue receipts for both federal and state governments’ stamps; electoral materials; secure tickets and other payment solutions for the transport sectors; thermal rolls for POS among others. I would rather not go into the politics of our percentage share of the markets, all I can tell you is that we know ourselves.

With the facilities and competence of Superflux in security and commercial printing, why do the government and organisations still print outside Nigeria draining foreign exchange and developing other nations?
I will blame the situation on lack of awareness on the part of government functionaries, corporate entities and non-governmental organisations of the existence of credible local security and commercial printers. I will support this assertion with two experiences we had as a company. Firstly, we invited Sanusi Lamido Sanusi, the then CBN Governor in 2011 to commission the expansion of our factory and installation of newly acquired printing machines. He had a tour of our production facility along with his entourage that included the managing directors of money deposit banks and upon the conclusion of the tour, he made a pronouncement before the pressmen present to the effect that he was shocked to see that we had such a facility in the country and still allow the bulk of our cheque books to be printed by foreign security printers. He then promised to put an end to the practice.

As at the time this pronouncement was made in 2011, we had 14 security printers licensed by the CBN with only 3 domiciled in Nigeria. True to his words, by 2013 the CBN banned the 11 foreign printers leaving the 3 local based printers and the banks never felt the absence of the foreign printers as the 3 local security printers which include the MINT were able to meet the demands of the banks.
Secondly, the same scenario also played out when some few years back, a very critical government institution in preparation for its constitutional assignment required some sensitive security materials and decided to send some high level delegates for inspection of Superflux production facility. They expressed amazement with what they saw. We got a chunk of the job and performed to the satisfaction of the agency and they have continued to sing our praises ever since.
If the decision to localize the printing of all security and commercial materials is taken by various tiers and arms of government as is currently being championed by the Chartered Institute of Professional Printers of Nigeria (CIPPON) and other stakeholders in the ecosystem, it will have a great impact on job creation for our teeming unemployed youths in the country. We will have the capacity to employ well over the 300 personnel currently on our pay roll.

What role is Superflux playing in the fight against document fraud prevention, detection and deterrence?
There is no one-fit solution for document protection. What we do at Superflux is to first understand the peculiar requirements and exposure of a prospective customer and proffer a cost-effective solution that addresses the potential threat. We provide various security features designed to enable verification and authentication by the recipient.

Tell us about more your brand protection services?
This is mostly driven by the sophisticated and complex demands of our varied client base who want secure and pocket friendly solutions. We draw on our experiences acquired over the past 23 years in graphics, technical applications/innovations and the synergies generated by the close collaborations between our R&D department and other business units. Various techniques such as in and off-line security techniques, bar, smart and smart active technologies, track and trace solutions, RFID technologies, nano-materials and technologies, code reading and security tracking technology, etc, are used to protect against counterfeiting, cloning, fraud, diversion and all kinds of intellectual property issues.

Do you leverage on technology in the printing of various types of secure documents?
We draw on our extensive experience in graphics, technical applications, information technology and have successfully harnessed advanced technologies to develop series of innovations in security printing and other products we deliver to our numerous clients.

Are you also involved in commercial printing and the supply of thermal rolls?
Yes, we are highly involved in providing commercial printing services to various sectors such as the banks, government agencies, corporate organizations and high net worth private individuals. We are known for high quality and quick turn-around time in the delivery of commercial print solutions and products. We are a major supplier of the various types of thermal roll in Nigeria and our products which have been proven to be of the highest quality are manufactured locally. We also involved in variable data printing and produce various types of envelopes.

Who are your foreign technical partners?
Other than sourcing of raw materials and equipment from outside and within Nigeria, all our products are manufactured locally at our ultra-modern factory at Ogba, Lagos State. We have a highly trained and motivated workforce. When the CBN introduced the 1st edition of the Nigeria cheque standard, thirteen security printers where accredited/licensed to produce cheques for Nigerian banks with only two of the printers based in Nigeria. The CBN however made a pronouncement then, to the effect that all the licensed security printers must have their production facility in the country within a given timeline. Superflux that was hitherto producing cheques with its technical partners in the UK decided to set-up a local production facility here in Lagos in 2006. The facility was upgraded and commissioned by the then CBN governor, Sanusi Lamido Sanusi in 2011 and we have since done all our productions locally.

What peculiar challenges do you face in the Nigerian business environment and how were you able to overcome them?
The Nigerian business environment can be described as a jungle and challenges differ from one sector of the economy to another. But it is obvious that the manufacturing sector where we operate faces the most challenges and it appears to be getting worse by the day. Take for instance, the issue of energy. We have a 500KVA; 1,250KVA diesel and a 1,400KVA gas generator in addition to electricity consumption from public power providers. Diesel cost has skyrocketed while the cost of maintaining these heavy-duty generators can only be imagined. Electricity tariff from the public power providers has doubled in the last twelve months. The exchange rate against the major currencies of other countries has gone haywire in the last few years and it is not even readily available for a company like Superflux that imports about 90% of its manufacturing inputs.
If you manage to pay your foreign suppliers, delivery of the materials is another story. Ships hover in the high sea for months before it is able to berth with the demurrage being passed on to the importer.

A 40ft container that was shipped with about $3,000 up until early 2020 at a time jumped to $16,000. The cost of moving the same container from the Port to the factory that used to cost about N250,000 now costs about N2,000,000. The government must as a matter of urgency find a solution to the perennial congestion at our ports. People keep blaming the truck drivers for indiscriminately parking their vehicles on the highways. But are the truck drivers to be blamed? You contract a truck driver from Kaduna, Onitsha, Ibadan or even Lagos to go the port to pick your goods and he gets to Ikorodu road and meets a queue to Apapa or Tincan Island Port. Do we expect him to turn back? Of course not, he will join the queue and crawl to the port. Look, there is too much inefficiency at the ports and it has to be tackled urgently by the government. The whole business environment is simply unstable and smothering.

What is the impact of electronic banking on the cheque production business?
The reality is that cheque usage is on the decline with the advent of electronic payment solutions. But again, you must also admit that the electronic payment solutions have its challenges. According to Merchant savvy, Global losses from payment fraud has tripled from $9.84 Billion in 2011 to $32.39 in 2020 and is projected to cost $40.62 billion in 2027 – 25% higher than in 2020. It is interesting to note that most of the fraud cases involved electronic payment solutions. The Central Bank of Nigeria has in the last few years introduced measures that have drastically reduced the incidence of cheque fraud in the Nigerian banking ecosystem thereby making it relatively safer as a means of making payment.

Yes, electronic payment solutions have revolutionized the means of payment but we have people who still find more comfort in using cheque as a means of payment. Take the UK for instance, in 2008, the government announced that cheque usage will be completely phased out by 2018. There was however a public outcry against the pronounced intended policy action and the government was compelled to reverse itself in 2011. In the USA, the cheque is still massively used. The introduction of Check Act 21 in the USA was a result of their experience from the 9/11 attack of 2011. As sophisticated and tech-savvy as some of its citizens may be, close to twenty billion cheque leaves are still used in that country per annum. So, the answer to your question is that the introduction of various modes of electronic payment solutions have impacted negatively on cheque usage/production business but cheques are still a safer means of payment. With the kind of innovation that Superflux is known for, we have introduced creative value addition to the traditional cheque base stock production which has in turn made practically all the banks to see us for what we are: solution providers.

Apart from Nigeria, which other countries in Africa do you render services to?
We do business with clients from Sierra Leone, Liberia, Zambia, Cameroon, The Gambia, Togo, and Benin etc.

How do you maintain your various production machines?
Our machines are maintained by our highly qualified and well- trained engineers. We have about thirteen graduate engineers who studied electrical, electronic and mechanical engineering on our payroll. Some of these engineers have undergone trainings in Europe, USA and Asia on specific machines from different OEMs (Original Equipment Manufacturers). They are not just highly qualified and well-trained, they are also highly committed like most of my workforce.
Generally the workforce at Superflux is the bedrock of the successes achieved over the years. We have a fantastic workforce; from marketing, support units to the various production units that are well trained, committed and willing to give their best at all times.

Talk to us about the revised Nigeria Cheque Standard introduced by the CBN and took effect in April 2021?
In 2004, the Banker’s Committee mandated the MICR Technical Committee under the Chairmanship of Sarah Alade, who was then the Director of Payment Systems Department at the CBN to come-up with a robust cheque standard for the Nigerian banking industry. Alade worked tirelessly to see to the actualization of the 1st version of the Nigeria cheque standard before she was elevated to a deputy governor prior to retiring as the governor of the CBN. Frank Cartwright, a Briton was appointed the Consultant. We visited France, UK, South Africa and Kenya for what was called a study tour to understudy how cheque standard and cheque processing work in various countries. We drafted the 1st version of the Nigeria Cheque Standard which came into force in 2006 with the main objectives of (i) regulation & accreditation of cheque security printers (ii) production of secure instruments to address the incidence of cheque fraud (iii) promote greater efficiency in the clearing system (iv) facilitate image technology, truncation and archiving in the Nigerian clearing system.

In 2019, the CBN in its wisdom decided to revise the standard to incorporate new developments that had taken place since the introduction of version 1. Some of us outside the CBN/MICR committee who were considered knowledgeable were invited by the CBN to assist in the revision. Aside from some changes on the cheque format, the revised cheque standard (2nd version) introduced additional check digit for the validation of all the fields on the MICR code line and Expiry Date also on the code line that now stipulates that issued cheques will cease to be valid after five years from the date of production.

The revised version also introduced the QR code on the reverse of the cheque. The QR code is seen by the CBN as the final onslaught on the fight against cheque fraud. This unique feature is expected to checkmate fraud incidents relating to cheque cloning when fully adopted. Superflux has upgraded its machines to be able to print the QR code seamlessly on cheques and one of the banks has since adopted the solution and has testified that it has become almost impossible for fraudsters to clone their cheques. It is expected that the CBN will soon make this future mandatory.

What is the next frontier for Superflux International Limited?
My dream has always been to hand over Superflux a better organization than I met it. I look forward to seeing Superflux grow into an international brand and I strongly believe this is achievable with the workforce we have been able to put in place. In the short term, we are working on secure IT-based and other alternative payment solutions to expand our product offerings.

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