Wemy Industries wants the federal government to initiate a diaper policy to boost the growth of the industry and raise the capacity of its new adult line.
Speaking with select journalists in Lagos, Paul Odunaiya, managing director and CEO of Wemy Industries, said the diaper policy must be targeted at reducing tariffs for raw materials used by local manufacturers and controlling influx of substandard diapers.
“There are raw materials that we pay high duty on. For instance, we pay 20 percent duty on non-woven, which is a raw material,” he said.
“This should not be the case. We should pay zero or five percent because this is a way to encourage industrialisation and low prices for the low-income consumers,” he said.
He disclosed that finished diapers still came into the country at 20 percent duty, prompting Wemy’s competitors to continue importing while masquerading as manufacturers.
“Some of our competitors are importing into the country, which is very unfair to us. It leaves a bit of bitter taste,” he said.
He explained that with the diaper policy in place, Wemy Industries would expand more and attract new investors.
“I have an investor who says, ’If you have a diaper policy, I will invest $20 million into this country.’ There is so much policy summersault in the country, and they cannot risk their investments without a diaper policy in place,” he further said.
He stated that diapers were health products and Nigeria should not continue to allow substandard products to flood the local market.
He said an absence of a diaper policy, which he had been championing for some time, could mean that government officials were preventing investments into the country by not moving fast.
BusinessDay recent calculations show the diapers market is worth over N280 billion. The market was once dominated by Procter & Gamble, Hayat Kimya, and Kimberly Clark, among other smaller brands like Rainbow Fame. But foreign importers are taking a huge chunk of the market as they compete better in terms of prices, though their products are sometimes substandard.
Wemy has emerged the first manufacturer of adult diapers in West Africa, strengthening its foothold on the local and regional market.
The company, which makes Nightingale and Dr Brown’s hygienic brands, recently brought in the adult diaper machine to solve a problem of scarcity and help conserve foreign exchange for the economy.
“I can tell you that ever since we started the adult diaper line, the products have gained traction. They are like hot bread,” he said.
“Locals can now buy locally, rather than import. We also solve the problem of jobs and technical skills,” Odunaiya said.
He said the company had sent some of its staff members to China to learn the nitty-gritty of the operations of the adult diaper machine to ensure efficiency and returns on investment. He said the company now produced cheapest adult diapers in the West African market.
“Our strategy as a business is localisation of our products so that we manufacture all of them locally, rather than trade them,” he explained.
“The adult diaper is a massively big machine because you are making the products for adults. And it is very difficult to ascertain statistics on the users of the adult diapers in Nigeria and West Africa because it is a silent and private condition,” he further said.
He pointed out that based on international averages, that adult diaper market was usually one-thirds of the baby diaper market.
He stated that the diapers were for mothers that had given birth to a high number of children, old women and women affected by Vesico-virginal fistula (VVF)—a hole that develops between the vagina and the bladder.
“We have a problem in northern Nigeria and West Africa, which is the problem of VVF. We have one of the highest cases of leakages in the world because of old customs and practices of marrying young ladies at young age. There is also the elderly who suffer from the same conditions. A lot of them are mothers who have had a lot of babies. The adult diaper is here to alleviate some of these problems,” he said.
“The problem with the adult diaper in our market is that they are usually scarce and there are poor quality adult diapers in the market, most especially because they are expensive. So, quality and quantity are usually inadequate. It is really a challenge for pharmacists and doctors to find the right products,” he stated.
He, however, admitted that importation of adult adapters was an unsustainable business as a 40-foot container would only give about 500 bundles, which might only cater for 500 people.
He disclosed that apart from lack of policy, there was shortage of skills in the adult diapers market.
Wemy, which has been in existence for 40 years, manufacturers baby diapers, baby wipes, sanitary pads, adult diapers and other types of pads. According to Odunaiya, the company had 100 percent capacity utilisation in three out of five of its lines, but he pointed out that full capacity was a function of availability of adequate capital and skills as well as a diaper policy.
He said of all the lines, the adult diaper lent itself for exportation easily.
“If you go to West Africa, a lot of Chinese firms dump cheap diapers into the market because of weak policies and regimes,” he stated.
‘But that happens in the baby diapers category, but it is less so in the adult diapers category. The price points we can manufacture is so strong that even if there is dumping, we are still competitive,’ he assured.
He confirmed that Wemy had been working on backward integration, though the majority of its raw materials were still largely imported because of absence of a standard petrochemical industry in Nigeria.
“The constraint is inadequate working capital. If I have working capital and I get government policy to help protect my investments, I can quickly reach my capacity. I have full capacity in three out of my five lines because I am happy to price sharply and produce high volumes. I want proper government protection so that I can price properly,” he said.
On the closure of Nigeria-Benin border, Odunaiya said it would hurt smaller business that would want to grow.
“And we need a lot of smaller businesses,” he said.
But he said there was wisdom in shutting the border.
“It has certain benefits because smuggling and substandard goods have been restricted. I think the long-term position is a more controlled border that will allow goods in and out. There should also be a strategy that checks grafts. I think that requires investment on modern infrastructure.”
On the cost of production, the Wemy boss said the company had a 33KVA line, which was an industrial line.
He explained that the key solution to managing power was producing high volumes, which many small firms would not be able to.
“But ultimately, government needs to decide to give industrial clusters power. There needs to be decentralisation of power. If you make it in small sets, it is easier to manage,” he advised.
ODINAKA ANUDU
