Mr. Ayodeji Oseni is the Managing Director and Chief Executive Officer of Industrial & Medical Gases (IMG) Nigeria Plc. He is also an expert in business development, marketing, and management.
In this interview with Nairametrics, he offers some tips on the policies that the Federal Government can initiate to drive activities in the industrial and manufacturing gases industry in Nigeria.
Nairametrics: How do the government’s unstable policies affect companies in industrial gases and allied products?
Ayodeji Oseni: This inquiry is fast turning into a platitude of sorts. It is apparent that the unstable policies of the government are formulated to stifle manufacturing in Nigeria, especially in the industrial gases and allied products sector. Do you want to discuss the forex situation, for example, in terms of availability or accessibility?
How do you meet your forex obligations to external suppliers, pay for plant spares, raw materials, etc.? Or do you want to hear about the high cost of operations and the provision of energy? Government policies are not favourable at all to manufacturing concerns as of date.
Nairametrics: Are there policy measures that the Federal Government can put in place to enhance the operations of companies in your sector?
Ayodeji Oseni: Yes, and very much so. Our sector is constantly importing plant spares, buying equipment, involved in the daily global logistics of exporting and importing finished goods, and heavily dependent on cost-effective energy availability to power plants and machinery for production.
The federal government has always been encouraged to look into friendly policies that will assist in alleviating some of the surmountable bottlenecks that are ‘man-made’ around these concerns.
Packaged gases are delivered mostly in cylinders and involve high pressure. The integrity of the structure of a cylinder plays a crucially important role in the transaction cycle between manufacturers in our industry and the end users of the products.
This means that the government is the only body that can demand that every cylinder to be used or currently in use to store any packaged gas is of the right material, tested, carries the test or expiration dates, has a visible identification number, and the ownership markings are clearly stated on such a cylinder. This information can then be uploaded to a database available to the government.
In the event of a crime, explosion, unfair business practices, or continued use of such cylinders after test date expiration, etc., this information will assist the government in investigating and tracing the origin of such cylinders and preventing such incidents.
Another policy that is long overdue is for the government to critically reevaluate the entry-level requirements in the industrial and medical gas manufacturing industries. This policy will also directly apply to the distribution, handling, compression, transportation, haulage, and sale or resale of such gases without appropriate government authorization, certifications, licences, etc.
In addition to the several positives embedded in this kind of policy, the inherent safety of lives and properties cannot be overemphasised. This is a critical role of government. In today’s Nigeria, anyone who has access to industrial or medical gases, or any gas for that matter, can compress, transport, or sell and resell with no recourse to whether the primary objective of their business is licenced by the government to engage in such practices.
Nairametrics: Can you mention some methods that can be used to curtail fake products in our market?
Ayodeji Oseni: Yes, and this is one of the critical areas and policy formulation directions we are encouraging the government to look into urgently. We have observed over the years the emergence of mediocre businesses that capitalise on the lack of government regulations and enforcement of existing policies for our business. Some of our products are classified as drugs by the World Health Organisation and are very critical to life and existence.
In the industrial and medical gas industries, fake products include those that are available in the market as underfilled, without a certificate of quantity or quality tag, cylinder test dates, or corporate identification markings, and unbelievably underpriced. The insistence of discerning customers on the provision of these checks is a step in the right direction.
Furthermore, adherence to plant set-up codes and good manufacturing practices and standards by accredited players in the industry will go a long way to complement whatever government and regulatory agencies will do to ensure that safe and quality industrial and medical gases are available in the market.
Nairametrics: Beyond the previous challenges in the operating environment, the Nigerian economy is facing rising inflation, general complaints over the pains of the removal of fuel subsidy, controversy over the implementation of a unified exchange rate, and a prohibitive interest rate. What measures are you putting in place to sustain profitability and create value for your shareholders?
Ayodeji Oseni: As a business, we continue to leverage our fastidiousness to operate and remain market leaders in a peculiar industry within a very dynamic and challenging environment.
Safety, good manufacturing practices, adherence to best global practices, maximization of internal efficiencies, and maximization of strategic business opportunities are some of our daily management tools to combat the downsides of the ever-changing marketplace as dictated by the Nigerian economy.
Nairametrics: How do scarcity and high cost of forex affect companies in the industrial gases and allied products in sourcing raw materials?
Ayodeji Oseni: The scarcity of forex has brought about humongous financial losses and pains for our business. We lost revenue as we could not import raw materials for production when they were due.
We lost profits, money that could have been given as returns to our shareholders and also reinvested in the business.
We lost business opportunities, goodwill, and most significantly, plant downtimes due to the inability to source forex to buy plant spares or pay in good time for the same.
Nairametrics: Any plan to float a subsidiary for backward integration?
Ayodeji Oseni: This is one of the ways to go in this dispensation. The board and management are constantly reviewing opportunities with a mindset to ensure backward integration.
Environmental, Social, and Corporate Governance (ESG), has become one of the key performance indicators for many companies.
Given the nature of your operation, how does the company align this with its shareholders and other stakeholders’ expectations?
Ayodeji Oseni: IMG is very into ESG. The nature of our business intrinsically suggests that we are indeed champions of this initiative and embrace ESG as a way of life and doing business. We are actively engaged in several initiatives to meet our ESG objectives, and management is constantly working with the board to improve our showings.
Nairametrics: Why did your company raise N1.2 billion through a debt instrument recently? How can this translate into shareholder value?
Ayodeji Oseni: The answer is a BIG yes. Shareholders will get higher value for their investment. Following our new look and alignment of strategic intentions, we are taking a strategic leap forward towards expanding our asset base and, by extension, our business and product offerings in the next 3 years.
This necessitated the debt instrument, which is our first major step in a series of steps towards our objective. I am also happy to say that the N1.2 billion has been fully paid back to the investing public.
Nairametrics: How can IMG sustain its status as a major brand in this inclement operating environment?
Ayodeji Oseni: IMG will continue to seek out creative ways to engage her esteemed customers in the coming years with her products and application processes.
We believe this will assist in no small measure in empowering our target market and the general public as we seek to position our brand and contribute positively to our industry and country at large.
