Owolabi: Manufacturing’s Not for the Faint-hearted

At a time when companies are shutting down and exiting the country due to high operating costs and unfriendly investment climate, Managing Director/Chief Executive, Black Pelican Group, Mr. Michael Owolabi, shares his success story in the past 20 years. In this interview with James Emejo, he discusses the challenges, opportunities in the business environment and how the company had remained resilient amid various headwinds. Excerpts

You are celebrating 20 years of business in a country where companies are exiting due to the harsh investment climate. No doubt, it’s not been a bed of roses all along. How did you become so resilient?

I don’t want to sound like I’m using words that are over flogged, but it’s been a lot of hard work. And I’m sure many entrepreneurs in my position do the same. The work is nonstop seven days a week, with very little time, even for family – forget friends – that’s the lonely life of an entrepreneur. So, when this musician came up with the song ‘Lonely at the Top’, I understood it completely.

In Abuja, I have a flat upstairs here on top of the building where I live. So, when I come to work, because I live in Lagos full time. When I come to Abuja, I live in the office. So, you can understand that sometimes I come down in my pyjamas at 4 a.m, go to my office, and I’m there; I forget time is going, and by the time I come out, people have already come out, and it’s 11 a.m. So, because I’m in Abuja, the family is not here, it’s seven days like that. So, there’s a lot of hard work.

But, there’s also the fact that we’ve seriously diversified our business. When we started, we were doing only bathrooms. When we saw that, okay, clients need more, and in response to customer needs and the market, we said, okay, let’s do more, and we started doing kitchens; we started doing doors.

When we built our Lagos office, it deepened our product base because when people came for the lunch, they looked at things like this and said, I like this; and it was not what we were selling. We said, oh, we just did it for our meeting – but they said, but I want it. We said okay, we can sell it to you. Some people came and carried our chairs. (6:19) There was even a particular client, he was an Assistant Director (AD) in a bank.

He took my chair and told his daughter to take it to the car. I said, boss, that’s my chair, he said you’ll find another one for yourself. And so, we started doing more.

The MD of a bank came to our office and saw the furniture my staff was sitting on, and he says, “why can’t all my branches look like this? Can you give me a design philosophy for my new branch rollout?” And today, we supply all the furniture for all the branches around the country. So, because we’re very diversified, it helps us to mitigate; if people are not doing houses, people are doing offices – for instance, when COVID came, our sales of gym equipment went up because people are now seeing that the healthier you are, the longer you live. And so, you might have all of this money and you’re not healthy. So, our wellness business then took off on the back of that.

Therefore, diversification has helped us to balance, it’s like somebody constantly doing this, like a dance.

Now, I’ve mentioned hard work, I’ve mentioned diversification, the third pillar is my team. I can tell you 100 per cent that I can’t take credit for anything that we’ve achieved. My guys are well compensated.

So, that’s the thing I learned from work. I used to work in GTB. And it’s interesting to know that one of my founding shareholders is Mr. Fola Adeola, who was my boss in GTB. When I wanted to start the business, I didn’t have the money. I went to him. And he also has 25 per cent of the business till today from that investment 20 years ago. So, he taught me from GTB – and that’s our philosophy in GTB – you take one person, pay them the salary of two people, and give them the work of three people, and that’s GTB. So, people work hard, but they are paid well.

In our company, for instance, if you are a manager and you spend up to 10 years, we buy you a house; If you want to live in Lagos or Abuja, and not a house in Shangisha; a house on the Island. When the company prospers, it’s not just for me alone or some people alone, everybody prospers. And so, I have a crop of people who are very committed to the company. And I rest on their shoulder.

How have you been able to retain these human resources you’ve nurtured over time?

Now, I had a lot more of them until the external environment started becoming more hostile. So, a lot of them, even with all the things we do, went to Canada because they said to me, Mr. Owolabi, yes, you are paying us well, but you cannot protect us from kidnappers. You cannot protect us from incompetent doctors in the hospital when we have surgery, or when my daughter is sick – and because you cannot protect me from the larger environment. Yes, I give staff here free food, there’s free staff bus, there’s free insurance; there’s training abroad -still, the larger environment frustrates them, and they run away. I can only do so much to keep people. Our turnover is not high of people; people hardly leave us, but when they do, it’s usually abroad. They usually don’t leave us to go to other companies. It’s usually that they are going abroad. And that is that they are giving up on the country.

So, those are the challenges and opportunities. And our success, despite the hardship of the country, is basically built on those three pillars – the fact that we are a very diversified; a very strong team that is committed, and we work extremely hard.

My wife was in Guarantee Trust Bank for 17 years. She was an assistant general manager in the bank, and it took me three years to beg her to join us because I got to a point where I could not cope anymore. The work was simply impossible for one person. But she was like, oh, but if I join you…typical concerns of, well, that means that our entire family will now be in this place. If something goes wrong, how do we manage our children…but I said to her, I believe in this country 100 per cent and I 100 per cent believe in the business. You come and see. And she’s been here now for 12 years. And honestly, without her, I could not be here because of a lot of what she carries, for instance, the finance function of the organization is with her. The HR function of the organization is with her. This entire event that was organized, I came as a spectator like you.

How much they spend, I don’t know; I’ve not signed a check in the 12 years she’s been here. I don’t know how much we have in the account. I don’t even want to know because the things that I carry in my head are enough. So, that’s really the secret. And to have someone as your partner, it’s like having two people in the place of one. So, it’s 100 per cent commitment. It’s 100 per cent trust. I don’t have to check her work. I don’t have to second-guess her decisions. Nothing. So, she is a secret. A lot of my friends ask me, but how do you work with your wife? But honestly, if any man can get that advantage, there’s nothing he can’t achieve. So, I would say those are the secrets that I have.

What are the core challenges in the Nigerian investment space and what would be your candid recommendations?

I think that the current crop of administrations in the country are very familiar with the challenges we face. The challenges are quite known and they’re clear. Infrastructure is a big one; road network, rail network, remain challenges. Congestion at the ports, the ease of clearing goods. I think the former vice president, Yemi Osinbajo, set up a committee for ease of doing business and they sort of tried to mitigate some of these things. So, all of those challenges are known including access to foreign exchange, exchange rates, those are challenges that are known. If we increase food production, if we increase manufacturing base in Nigeria, we’ll stop importing rice, importing a lot of things that we can grow locally. That will help our foreign exchange base and obviously will help improve the rate. So, they are all problems and solutions that are well documented, particularly by you members of the press.

They’re not new. But we are optimistic that this current administration will at least begin to address some of them.

Given that virtually all your products are imported, how do you cope with the current foreign exchange challenges?

Very good question; obviously sales will be affected when prices are going up. The challenge for anybody in that situation, and that’s what we are fighting and working on, is expanding our customer base.

We’re right now very strong in Lagos and Abuja. But if you’re experiencing dwindling sales because the dollar rate is going up, who knows you in Kano? Who do you know in Bauchi? How many customers do you have in Anambra? So, we’re looking at those regional expansion activities to help us increase the customer base and therefore, shield the effect on low sales.

We’re also seriously thinking of going into manufacturing. In fact, we already have 67 hectares of land in Abeokuta that is dedicated towards that site. We did the town planning, and on that site, there’s supposed to be a factory for the manufacturing of some of the things we import. It’s already in the plan.

We’re looking at so many things, access to capital, to develop the place, what are the terms? And then the biggest challenge we’re beginning to see, because we did the market survey, is the availability of skilled staff to even run those places; because if you train people and three months later, they’re in Canada or the UK, I mean, you know, you start afresh.

It’s a factory that’s running, you can’t afford it.  So, those are the things that deter people from going in.

You know, when people say, oh, but why don’t you go into manufacturing?  It’s not for the faint-hearted. On power, you know, to manufacture tiles or sanitary wares, you need what is called a kiln, an oven that they don’t put off.

Duravit, our supplier from Germany, their oven has not been off since the Second World War. They only put it off during the Second World War, when obviously Germany was under attack. After they put it on, it has not been off till today. Now, you want to run that in a place where there’s a generator? As I’m talking to you, on Thursday, our jumper cable exploded here. It took AEDC one week to respond. We were on the generator in this building for one week, non-stop.

What have you done to address this manpower deficit?

So, people are not exposed. Local architects are not very exposed. Our people don’t really make an effort to improve their skills. One of the things we did for the first 10 years of existence was to take a batch of 10 consultants abroad every year. We’ll choose architects, mechanical engineers, electrical engineers, and we’ll just carry them to Italy, Switzerland, Germany, showing them different things because we saw clearly that we were not speaking the same language.

And if you go into any facility that we have, training is a permanent part of what we do, and not just for training of our staff.

No doubt, you are a market leader in the country’s interior solutions space. How do you intend to sustain your dominance?

We’ll continue to do more of what we did to get us here. Focus on the customer; that’s the number one thing, and we don’t just say it. The truth is the brands that we represent are so committed to quality. Let me give you an instance.

Nobilia is one of the brands we represent in the kitchen industry. They do the kitchens that we sell. They give a 10-year warranty. If your kitchen is damaged, nine years after you bought it from me, I’ll replace it, and it’s no cost to me, me personally. Black Pelican pays zero.

Nobilia will replace it. Just send us the image. What happened to it? As long as it’s not that you took hammer and damaged it. But that water damaged it or the handles are coming off – no, no, no, no – we’ll give you a new one.

We have brands like that, right, that are so committed. Kaldewei, all our shower trays and bathtubs on Kaldewei have a 30-year warranty.

So, if you do a hotel with us, yes, you pay more than the guy next door. But think about a hotel owner, it’s just that sometimes when we do business, we don’t think about it properly. One of the things that a hotel owner should focus on is that no room should be down. The more rooms are up, the more you sell. Because somebody comes in, we want 10 rooms, you say we’re fixing the leaking tap in room 10; lock it.

So, it’s important to invest with people like us who give you that support and that guarantee so that your business thrives. So, that’s our focus on the customer. We ensure that we support the customer with products and solutions that are tested, that outlive even some of the expectations. The Waterman School, when we did it how many years ago, we’ve not replaced many things there. In fact, the last time they called us was probably five years ago to come and look at everything. And that’s a school where students, you know how young people can try to damage things. So, that focus on the customer, if we keep up with it, which is obviously the plan, it will keep us in the position that we’re in. That’s the most important thing you can do. And on the back of that, you support it with products and then staff that know what they’re doing. So, the staff must keep getting updated and trained because they’re the ones interacting directly with the customer. Once that is assured, I think everything follows that, honestly.

You have achieved remarkable success operating in this economy despite all the odds; how are you giving back to society?

That’s a very good question. One of the reasons behind this company is the development of managers. I came from Grantee Trust Bank, where one of the reasons for the settlement of that company was the development of managers. If you look at the people that have left the bank today, if you look at the alumni of GTB, they are all in very key positions. They are running their own banks, running successful businesses; very successful people. I came from that school. And most of what you see me do today, I learned from there. For instance, we have a cafeteria that gives staff free food six days of the week. I learned it from Grantee Trust.

So, when I started my own business, I said, okay, first thing I’m going to do, I’m going to develop young people. So, the young Nigerians that work here have been empowered to run their own businesses. Some of them have started their own businesses and we patronise them. Now, that is a reason for our existence. In terms of CSR activities, the way people know it, we have it well-documented, of our CSR activities that we do every year.

We intervene in the hygiene space for schools. We go into schools and do toilet renovations every year. We look at NGOs that operate in places like Ajegunle. We’re always supporting those things. There’s a budget that we dedicate towards that. Sometimes, corporate organisations come to us, IBB Golf Course, the Ikoyi Club and we do their toilet renovations free. We like to give back to society, particularly in the area, because one of the things we also realised was that sanitation, especially the provision of toilet facilities is very key in the country.

Many of the schools that you visit, there’s no running water. Many communities have no running water. So, we said to ourselves, you know what, rather than even throw money around doing different things, let’s just focus on this area because we know it’s something that we’re good at. We have the products, and it’s a need that the community has. So, in that area, I think we’re very strong. There are very few institutions that have not felt our touch.

How many jobs have you added to the economy?

Today, we have staff of almost 200 people on permanent employment and maybe another 100 as contracts that are vendors and things that we support locally. For instance, the people who provide food, they’re not our staff. But they’re on a permanent contract to provide food all day long; same thing in Lagos, and all of that.

What is your advice to entrepreneurs and companies probably thinking of quitting the country on account of the hostile operating environment?

Nigeria, despite the hardship, actually presents a lot of opportunities. So, I’m an advocate for the progress of the country. I see success, I see opportunity everywhere. It’s tough, but I can assure you that most operating environments are tough. Yes, we deal with peculiar challenges in Nigeria that you perhaps will not find in better climates or other climates, but every environment or every country has its own peculiar challenges.

If we consider that we don’t have a choice but to make things work, I think things will work. We’ve been fortunate, and the success that we may have accomplished, it’s not me alone, it’s myself and the team. If you surround yourself with a good team and the vision is shared, I think that most of the problems of the country can be surmounted.

In commemorating your 20^th anniversary, you also launched your Coffee Table Book. What do you seek to achieve with it?

So, basically, a coffee table book is just a book that’s used to entertain guests in your living room or your anteroom.

Light reading. What we’ve done is we’ve put our 20-year history into a book, mostly pictures. Some prose, but mostly pictures. That shows from our origin story to today, and even talks a bit about our future. It’s the type you’re sitting in the lounge of the minister of finance, waiting for a meeting that you read. It’s a big book, but it shows you our history from where we started. Our first rented office in Lekki. Our first rented showroom of 80 square meters. Our first showroom was not even as big as this room…So, it tells you almost in minute detail how we started.