Otti: We Will Bridge the Housing Deficit in Nigeria

Funke Otti is the Chief Executive Officer, CTSR Group, one of the leading firms in the real estate and construction sector. As part of the firm’s drive to help address the huge housing deficit in Nigeria, which currently stands at about 17 million units, the company has introduced automated precast concrete technology that will revolutionalise how construction is done in Nigeria. In this interview with Chika Amanze- Nwachuku and Ugo Aliogo, Otti highlighted the benefits of the fast-paced building technology, a one-stop shop for housing solutions. Excerpts:

Can we meet you?
My name is Funke Otti. I’m a trained journalist. I worked briefly in Nigeria Television Authority (NTA), because I needed something challenging, and I wasn’t getting the right kind of vibes. I see myself as a social entrepreneur. Social entrepreneurs are activists at heart, but they are not interested in activism. For social entrepreneurs, it is not mainly about making money, it is about finding a solution to a problem.

A couple of countries have very weak government in such situations there is no social security systems and nothing in place for the populace. Social entrepreneurs serve as a link between those missing gaps. Even in countries with a strong working government, there could be some challenges confronting the populace. In Nigeria for instance, they have issues with housing, infrastructure deficit in an embarrassing manner because we cannot provide power, good roads, healthcare and other basic amenities.

You trained as a journalist, how did you become a social entrepreneur?
Becoming a social entrepreneur didn’t matter what you studied. It is in your instinct. I once believed that people from my area, Ijesha were basically good at business. I had uncles who I assumed were naturally good in business. The same thing I assumed that the Igbos are naturally good at manufacturing products because of the history of Aba made in Nigeria products. I started my entrepreneurship at the furniture factory in 1985. At a point, we decided to recruit people from the East to work with the new machine, but it didn’t work because the orientation has changed, people weren’t ready to produce.

Can you tell us the areas that you want to intervene?
The areas I want to intervene are in the area of housing. At the beginning when I said I wanted to leave NTA, I didn’t know precisely what I wanted. I left despite not having a job. My mum had a carpet business which, so it was not that very difficult to access the carpets. I started my company in 1985. I my company was called to supply carpet to some organisations. The arrangement was that when you supply, you lay the carpet as well. All I needed to do was pick the carpet from my mum’s shop and get the technicians that will lay the carpet. From the beginning, I paid attention to details, when they laid the carpet I work with them and through that process I learnt on the job.

I didn’t have to source for funds to buy the carpet because they were readily available, all I needed to do was to move the technicians to site. When the Principal Manager for property department for the company we were working for saw me working with the technicians on the floor, he was impressed. When I got office during the week, the news had gone round that I worked with the technicians.

After working on the guest house, we were asked to handle the changing of the furniture. I refused initially, but they cajoled me and that was how my journey into furniture began. In those days when you buy locally designed sofas you find cantons of sugars and all sort of things stuffed inside. I was not happy with what I saw; therefore I decided that for me to be able to do this, and be able to defend it, I need to know what goes on.

We have a mentality in Nigeria of just trading and wanting to make money, everybody wants the easy way. For me, I enjoy the processes than just making money only; I had to understand how the processes work. This was what got into the workshop and I started production. In furniture we started making sofas; we found out that the wood work aspect was more challenging which involves producing doors, kitchen cabinet, and wardrobe.

But the challenge at the time was that nobody had heavy machinery. In that period, you buy your wood and process in the market; the locally fabricated machines are there to process them. In producing doors, we were working with construction firms for individuals providing real estate services; one of them was UAC Properties. So in doing this, you find yourself working with the construction industry.

This was what attracted my attention and took us into construction. I remember an ETF project which we did in 1995, as sub-contractors, the main contractors were the construction companies. We had to deliver up to 800 to 1000 doors, when you get to site you will produce your doors, they usually come in different standards and sizes such as bathroom doors, 750mm, the regular opening doors is 900mm and when you take these doors to site, you find out that no single opening matches the other. This becomes a huge problem because you’re not making any money, so at this stage what you do is to begin to slice off in order to ensure that the door has an opening that is available.

We were wondering why can’t we just get things right and we decided that someone should be able to get these things right, gradually we went into construction. The same issues we had in the factory, was what we faced in furniture. We have terrible work ethics in Nigeria; even in offices we have a work ethic that is highly unproductive. You find people milling around in the offices, waste a lot of time and in the end people go home.

We decided to research on how it is done abroad because we wanted what we were doing here to conform to international standards. In the process of doing the research, we said to ourselves that for anything to sell in Nigeria, it has to be laid with concrete. So we eventually settled for the pre-cast (PC) concrete technology. It is like industrialised manufacturing of homes, because everything is going to be done with an automated machine.

The pre-cast machine helps to mass produce homes, part of the challenges we have had over the years is government’s inability to provide homes for its citizenry. The statistics states that we have about 16 to 17 million shortfall in housing. I believe it is more than that. People should be able to afford studio sized apartment at some stage in their lives. Most people cannot afford a two-bed room apartment. This applies to Lagos and Abuja, however I don’t know about other cities, but I know it is similar. The stress of everyday life in Lagos is enough to make people not to live long.

This technology is relatively new in our own environment. Has it been tested?

This is what we are doing right now. We are putting a prototype, we are setting up a factory in between, and we have to source for money in the black market that slows the process of finishing the factory. Somewhere along the line we had presentation done to the Ministry of Housing. When you use the pre-cast technology for construction, you save like 70 percent of the time. When the federal government came on board, they said they wanted to provide 5,000 units. But you check, you realise that they have not done up 500. When you save time ultimately you save money. If we can’t use brick and water, we will not be able to deliver.

You said the technology is renowned globally for speedy housing construction. What of the cost implication?

If you constantly think of cost you will not get anything done. Think of the cost of education. Because we don’t want to put ourselves through pressure, we prefer to learn a trade. The initial cost outlay of anything will be high. When Nigerians do business they don’t make a lot of progress, but when the Lebanese and the Indians handle such businesses, they make lot of progress. The problem is that we place so much emphasises on money and we don’t train, we are so narrow-minded.

There is so much concentration on money. I feel very sick and sad about the situation. People should be able to dream and dream big. If it is expensive and we know the cost, we would not pass it to individuals who cannot pay for it. It is not about driving people away or providing services for certain people in the society, rather it is about changing the face of real Estate in the next five years in Nigeria.

This is going to be a revolution with technology; I want a situation where my driver has a decent home to live. We can take the unprivileged suburbs in some areas in Lagos and build decent homes without chasing them away. When we make this technology to become accessible by all, there will be people who will become inquisitive.

Despite having universities with engineering department, we have not produced anything yet. We don’t get our priorities right. We have not taken one area of the need in our country and properly address it. For instance, if it is road, let’s take it. If we have been addressing these things over the years, we will not remain where we are today. In terms of cost, we will ensure that when we put it side by side with the traditional convention standards we are using, we will bear on the initial shocks. For the prototype, we are doing, we are working to ensure that it fits our own environment as well.

From what you have said your customers are not likely to be the only the high class. But are you convinced this will work?

Most of the developers don’t have the capacity to deliver. We don’t want to be doing the way we did it 50 years and we expect to get some miraculous results, it’s not going to work. Therefore, we need to build capacity. What we have done now is to build capacity. Dolphin Estate was built using pre-cast, but in a crude form at the time. Today, Dolphin Estate is still standing. Whatever we build with this technology will last for more than 100 years. Somebody was asking me about modification, for me, there is nothing to modify when you have an approved design.

The issue now is that people need roof over their heads. People are suffering needlessly because of government inability to make provisions for those things. The people in the federal Ministry of Housing understand that there is a problem and it is important that it is addressed instead of doing it the regular way. We need to identify the right application or technology. We need to get it right.

This technology is relatively new to Nigeria, do we have the capacity to handle it?

We have started training people and this is going to generate employment. We have about 30 workers. The work for the machine will be handled by machine. We will be looking at working with Dangote or Lafarge because the key things we need are cement, granites and the iron rods. In the value chain that will be added, we will either work with Dangote or Lafarge anyone that we will be favourable to partner with at whatever condition they are going to give us.

It will generate employment at a certain level, for instance the first factory is coming up in Abuja and we intend to get people and the prototype is being setup in Abuja. We don’t need to be changing people as we go along, even if other construction firms want to buy our pre-cast facility, we can send our team to install or train their team. The only thing they require is installation.

This project is capital intensive, what is your source of finance?
We have been funding it from our resources, and other businesses. The Bank of Industry (BOI) is there, we are hoping that they have enough capacity to fund. For us, to work effectively, we need to have our mortgage banks. We will be working with the corporative of organisations to see how people can have access to loans to buy houses. This is aside from other state governments and organisations we are talking with.

Who are likely to be your customers?
Our target is workers, civil servants, those at the federal and state levels; public and private sectors. Once we are done with Abuja, we are planning to move to the South-west. For the one in Lagos, we have the site already which is at the Lagos-Ibadan Expressway, so by the time we are done with that we will begin to consider PortHarcourt. The Abuja project is expensive, as a result of the fact that we cannot go from state to state, what we do is to use Abuja to serve the Northern part; Lagos/Ibadan to serve the South-West and then we will see how to reach the South-south. We can still open up franchises for people who want to setup their factories later and help them to build to their factories.

Apart from this company, do you have other companies functioning presently?
We do facility management, we are on the board of another shipping company and we also do furniture.

Are you going to import materials for the construction?
The raw materials are here such as sand, water, granite and iron rods. Because of what is happening, we will try to source for local industries that will provide the finishing. We will work with the local industries here to provide windows. We will produce our own doors. For the mechanical aspects, and the plumbing, we would have been doing that, but if we want to cut down on we will weigh the options. It will be cost effective for us to bring everything involved, but you will still be talking about sourcing for dollars. There are some organisations producing tiles in Nigeria, we have to look into that. If they contact us, we will be glad to use made-in Nigeria materials to encourage the other industries.