As investors keep waiting for the policy direction of the new Nigerian government, Rakesh Kapoor, global chief executive officer, Renkitt Benckiser, who was in Nigeria on a working visit, in this interview with Phillip Isakpa, Editor/Executive Director, BusinessDay newspaper, said he was in Nigeria to see how the relationship between his Group and Nigeria can be further leveraged and create more value to benefit both parties, but advised investors to be ready to invest for the long term and not for the short term, and other issues. Excerpt:
We know that when Global CEOs start going around, it is about cementing their investment in a particular country; is about looking for opportunities and creating opportunities where they possibly can. Tell us in brief what has brought you to Nigeria?
We have been in Nigeria for over 50 years. In this 50 years, we have achieved tremendous history we are very proud of, creating economic opportunities for people we employ directly or indirectly, which is more than 1000 in our factory in Agbara. We have significance presence across the country, and during this 50 years plus we have created unbelievable popular brands like Dettol, Mortein, Harpic, Durex, etc.
So, I think this has been a long journey; is not something I just started with my visit this time, not really in the next 12 months, we are going to be a long-term partner in the success of Nigeria. Not just partner from economy point of view, but also from social and health point of view.
You have been around for a while, you’ve seen the good and bad times, and you are still around. What has kept you going, believing in this economy?
First of all, me personally, as you may know, I’m from India, and I think if you are leaving emerging market, one thing you are guarantee is this, that your trajectory is not linear, is never going to be a straight line of growth, you will see ups and downs. Now, if you’re actually bordered about the downs and you stop, there will be no point still being in the market like Nigeria, like India with the short term.
The short-term growth will be painful; change is painful and therefore you have to stand strong and stand for the long term. I’m actually not at all to this headline deciding whether we should invest more or not, I know this is going to be a tremendous opportunity all over a period of time. So, invest for the long term not for the short term. This is my message.
There is a new government in place, oil prices are down, economic outlook seems, as claimed by the IMF, coming with forecasts that are going up and down in every other town. How are you positioning yourself with the change in government?
First of all, we wish the new government all the luck because in a new government we also need some good luck. I think that is very clear, but I know the new government has come with a new mandate of the people who want to see change. Change in terms of a cleaner government, better governance, law, order and security, stronger economic policies, and I think the new government comes with all that hope. It is still new and it has to fulfil that hope.
But I have to say once again that people should not have short expectation from any government. The problem cannot be solved just in one quarter; they will take a long period of time. So, government should be bold to do things that are right for a long term and not things that work for the short term, that is one point.
Secondly, I think the oil price meltdown; who knows how long it could be and what the next decade holds. But I think strangely not in short term, sometimes in lower oil prices government can be forced to do things that are structurally better. I think in the adversity of lowering oil prices there is also boon that government can take tough measures of, structured measure, and long-term measures for doing the right thing because he doesn’t have a strong oil price to depend on. And then, for doing the right thing the government might just create a much better Nigeria.
You have been making interventions, I understand in the area of health and hygiene. What kind of intervention is RB making?
Let me explain that for you. First of all, RB is home, and new RB is health and hygiene, healthy highlight and happy home. To push that agenda and vision, RB expectation is healthy hygiene brands; brands like Dettol, Mortein, and Durex with priority, because we believe the soap do specific purpose. The first purpose the soap does is very simply, mostly used in preventing series of deceases in Nigeria.
In Africa itself, you have malaria, HIV, diarrhoea and all the health issues like poor sanitation prevalent. In Nigeria, 85 percent of health issues have related history of HIV, malaria, and diarrhoea, and we have brands that solve all these problems. So, we are both lucky, but we also have responsibility to do something about it.
Actually, this is what I am here for, how we can achieve good for Nigeria and do well for RB at the same time. If you cannot solve all these problems, we know Nigeria will be a strong successful nation, but we also know RB will be more popular, will become successful too and we will create more value so that this is a proper solution.
Going into your Nigerian production business, to which extent is your product portfolio represented from what is being churned out at Agbara?
Some of the brands like Dettol, Mortein, Harpic and Durex are well represented here but we also know that are very important to us but are not fully represented here will soon be launched into the market here. Indeed, we are lunching some of them very soon. Very recently, we launched two brands, which are known globally but new to Nigerian market.
When you say you are launching in Nigeria, are you going to import the products or you are expanding your production capacity at Agbara to bring about these products?
We are doing both. We are expanding our production capacity in Agbara in our local manufacturing programme, to make sure that as more new products are in the market here. Some of the products will however be imported, as we need to strategically ensure high standard in local production in our local plant expansion scheme.
We need to control the quality and make the products comply with the global standards. The more fragments you are manufacturing, the less control you have over maintaining the utmost quality and with healthcare products, you cannot afford to take chances. So, we are limiting the number of manufactured brands to keep our quality. Therefore, some of those products are always imported whether to Nigeria or other parts of the world.
In your marketing strategy, what is the base of Nigeria within the ECOWAS sub-region?
I think, first of all, within Africa, Nigeria is one of the most important markets. Not just in Africa, but when we think about all our imaginary markets, Nigeria is one of the most important. However, it is not as big today compare with India, China, Brazil or Russia, but our ambition for Nigeria is massive. We believe that with the large and young population of Nigeria, the growing middle-class with the need of hygiene, there is no reason why this cannot be most powerful growth drivers for emerging markets in the future.
As the economy expands and things settle in terms of investment, are you looking to bring in new investments, more capital into the business?
As I have said, our investment in Nigeria is not from one axis. We have to upgrade manufacturing to be fully capable of high quality products, invest behind education, education of young children in schools. We visited about 4 million in schools over the last few years, teaching them better health hygiene practices, visited 5 million mums in hospitals, talked with them on how to give their babies and children hygienic milk.
The third area is human capital, and we should not underestimate that maybe because I believe that Nigeria might be relatively small in the overall ambition of the company, but in the size of the market it is very important. We try to pick the talent from Nigeria and put it in other part of the world, so they can do two things.
First, learn from other country and other places to see how they can become better people, but to actually take some of the learning they have of growing businesses to bring new brands into new market. So, I think our investment in human capital is not just in financial but also in other important part of it.
Tell us more about your partnership in respect to the ‘Save the Child Programme’ that have been in Nigeria.
We have a number of stakeholders in this programme. One stakeholder claims the save the children programme, an NGO operating in many countries around the world, and they have established network of people who can provide life changing experiences and education across a number of point of impact, talk about schools, talk about hospital and so on, that is one area.
The second is of course co-operation from the ministry of health. You know, they are partners in making sure that we can get the government out in all effort. What we want to see in all is what is called hygiene curriculum; we build and if we can actually include it in the schools’ curriculum so that young children can go to school and also learn from a very young age. The only focus, Nigerians wash their hand, which might not change in one generation but can change in other generation.
As more people wash their hands with soap, there is no doubt they can prevent not just only diarrhoea but also other diseases that get fast with hands. We want to see all of these if government can help us in bringing that into education structurally in schools’ curriculum, so as to make our next generation wiser.
Phillip Isakpa
