Ikpobe: Abolishment of Multiple FX Rates Will Create Level Playing Field for Manufacturers
Mr. Apollos Ikpobe is an accomplished financial expert with over three decades of experience in the banking and finance industry. Currently serving as Chairman of Just Food Nigeria Limited and a Non-Executive Director of NSIA Insurance Limited, he brings a wealth of knowledge and expertise to his roles. Ikpobe has held several leadership positions throughout his career, including Deputy Managing Director at United Bank for Africa Plc (2015), Director of UBA Pensions Custodian Limited (2015), Partner at Mazars, Coker & Co. (2013) and Executive Director at Zenith Bank Plc (2012). He was also an Independent Non-Executive Director of NGX (Nigerian Exchange) Group Plc and served on the Boards of Zenith Bank Sierra Leone, Zenith Pension Custodians Limited, Zenith Registrars Limited, Zenith General Insurance Limited, and Zenith Securities Limited. In this interview, he speaks about the journey so far for Just Food and its expansion plan. Obinna Chima brings the excerpts:
How has the journey been so far for Just Food?
Just Food is a key player in the food space; we focus primarily on the business-to-business (B2B) sector and we support a lot of businesses so that they can function effectively. We are a 33-year old company that was founded by Mr. Peter Mason. I joined the business in 2012, and I was appointed as Chairman of the company in 2015. We have tried to build on the original vision of the founder and found new ways to diversify and innovate. This is because the only thing you are sure of in any
dynamic environment is change, and we have tried to adapt in many ways to keep relevant in the market. With a Nigerian population of over 200 million people, which has over 70 per cent below 30 years of age, we can create products that would excite the market and we are trying to influence the consumption pattern in our own way through our customers. Most of the top QSR (Quick Service Restaurants) brands in Nigeria actually do business with us. We assist our customers to innovate on
things that have to do with food and ice cream, which is our major area. Although the QSRs are our primary customers, we also have our products that we sell in modern trade stores. One of them is the first premium ready to eat ice cream produced in Nigeria called Comelle Ice cream. Our focus was to compete with the international brands. We asked ourselves why companies would be importing ice cream from Europe to sell in Nigeria, when we can actually produce same here. What
we told ourselves is that our products should be able to stand on the shelves of any store anywhere in the world. We try to get the best standards for our products. We were also the first company in Nigeria to produce a non-dairy ready to eat Ice cream called Just Delight. This product is targeted at those who are lactose intolerant. The product is made primarily from soya beans and this is making a tangible impact in the market. We also challenged the status quo and asked how can we be importing cones into Nigeria? Thus we started producing cones in our factory based at Ota. We told ourselves that we are going to support the value chain around ice cream – in terms of equipment, support services and others. That is the general overview and as perception and taste changes, we would continue to create products to satisfy the market and expand our support in the food value chain.
But it appears your brand name is stronger than your products, is it a strategy?
Yes, it is. And that is so that anything that comes from that brand name (Just Food) would be easily acceptable. That is why you will see Just as a prefix to some of our products such as Just Delight, Just Good, and Just Food Ice (JFI) cream powder mix and Just Ice. First of all, we established the brand across Nigeria and other countries in West Africa. We are then following up with product innovation built on the brand equity.
How do you think the abolishment of segmentation in the forex market affect your company?
Let me tell you the reality: Many manufacturers in Nigeria were not getting their foreign exchange at the official rate. They have been sourcing money at very expensive rates all along. As the official rate is now devalued / merged with the other rates, it only means that people who had advantage and were getting dollars at lower rates, are now buying at the same price as the rest of the market. With that, quality can now play a role instead of other undue advantages. So, if somebody is getting
foreign currency at a lower rate than myself and I am supposed to be competing with him, I am already disadvantaged from day one. If I am producing more locally, it gives me a better opportunity to compete against anybody that is importing. The truth is that many businesses are going to start looking at local alternatives. We have a number of our clients who are already talking about that with us, which is why we are doing contract packaging and production. We have a number of companies
that we are producing ice cream for locally, just because they know that if they are going to import, the landing cost will not be beneficial to them. So, it will help to promote more local production and create a level playing field for competition.
As a manufacturer, what policy direction will you recommend to the Bola Tinubu’s administration?
The list of approved dairy importers should be enlarged. This is because there are so many businesses that are involved with dairy products conversion and processing such as infant
formula, cheese, pizza, biscuits and Ice cream companies that are not on the list. The end users/consumers ultimately suffer by paying higher for products due to the difficulties arising from this and other challenging policies. The indigenous manufacturers should be encouraged with enabling policies, grants, subventions and with targeted funding to boost
their capacity to produce, enhance comparative advantage and position them to effectively compete internationally. This will result in more employment of our youths and greater
contribution to our Gross Domestic Product. The benefits of African Continental Free Trade Area (AfCFTA) agreement, with this level of support will allow Nigeria companies export more to the continent and generate more foreign exchange for the country.
Can you tell us about the growth of the company since you came on board and the transformation that has taken place in the last 10 years?
Before 2015, our business was primarily focused on importing and selling products with little value addition. From 2015, we decided to move into light manufacturing at our Ota factory with the production of Ice cream cones (JUST Cones) and premium and value ice cream products (Comelle Premium Ice cream & JUST Good Ice cream). Now we are engaged in contract manufacturing for other companies locally. We also have our own locally produced ice cream powder mix (Just Food Ice Cream Mix) that is currently making waves in the market especially amongst QSRs. We subsequently expanded our warehousing / production facilities to Asaba, Kaduna, Lekki & Accra – Ghana. We also decided to focus on specific OEM’s (Original Equipment Manufacturers) suppliers such as Taylor USA equipment manufacturing for ice cream. For cooking and oven businesses we chose Rational ovens. It is worthy of note that our technicians are internationally trained and certified to maintain the equipment of partners we represent. In West Africa we opened offices in Ghana, Cote D’Ivoire and Senegal, and the standard and culture of global premium quality is the same. We have also established a presence in Sierra Leone, Cameroon and Guinea, however Nigeria remains our biggest market.
What is your expansion plan?
In the last eight years we have structured new relationship with our partners and we have been able to triple our turnover in Nigeria in spite of macroeconomic and environmental limitations. Over the next five years, we plan to grow three times our current levels. We will continue to strengthen our relationships with our customers as a trusted partner of choice as they continue to expand. We will continue to create more products to meet the ever-changing needs of our markets. We expect more expansion into other African countries. We currently have several QSRs businesses we are supporting, and our equipment supply business and consumables we sell to the hospitality sector will continue to grow to support our projections.
