Follow Us on Google
By Steve Agbota
Mr. Festus Mbisiogu, the Managing Director/Chief Executive Officer of Blue Diamond Group juggles many balls. The unassuming businessman owns many companies in Nigeria and China.
His companies, Uzotex International Nigeria Limited, Blue Diamond Limited as well as Shanghai Engineering Works Limited are making waves globally and tremendously impacting the Nigerian economy through industrialisation and job creation.
In this interview, he said Uzotex Bonded Terminal was established to assist the Federal Government to decongest the nation’s ports, help swell government revenue and create more employment opportunities for the teeming population.
He also talked about the challenges facing the logistics and manufacturing sectors, which he linked to lack of steady power supply.
He pointed out that without steady power supply, price of dollars, food items and other commodities cannot come down. He insisted that Nigeria is going nowhere without steady power supply as many companies are already closing shops.
Your firm, Blue Diamond Logistics has consistently blazed the trail satisfying customer needs for 30 years. What has kept it this strong, big and consistent?
Ok, Blue Diamond Logistics started years back, about three decades now. We started from Dubai and to the glory of God, we are having strong presence in five countries, mainly in Dubai, China, Turkey, Vietnam and the rest of some of the countries, even in America (Newark and New Jersey). So, the core aim of our services is to make sure that Nigerians thinking of doing businesses outside will have hitch-free transactions. So, we are helping them to take up the documentation of their containers. If they want to import, most of them are having difficulties in getting their items and they don’t know what to do in terms of documentation. So, we help them, we guide them on preparing the documentation. Then, we also help some of them in sourcing these products outside Nigeria probably Turkey and China. Then, we also stand as a middle person between the buyers and the suppliers because of language barriers and we also assist them to monitor their products in terms of quality control. My staff are always on ground ensuring that what they purchase is what the Chinese people are sending to them. So, after this, we handle the shipment, we are just an agent, handling the shipment of their commodities both air and sea. So, we handle the shipment through our third party. We handle the clearing aspect of it and we send the goods to their doorposts. What that means is that when you think of international trade, think of Blue Diamond because our aim is to ensure that you have hitch-free transactions. So, this has kept the company going all these years. You can imagine, if the Lord blesses you now, you want to think of importing; you do your research online and get a company from China. All you need to do is to probably link us up to the company and that makes it easier for you. Now that is confidence that we will help you to ascertain whether that company is genuine or not. We do our best to find out whether are you paying to the right company or not because we are based in that very place, we domicile in that place. So, my staff there will do all these investigations to our own best of knowledge and give you feedback. So, it is their choice to pay or not, so after which we take it off. So, if you are the one, you will be so happy. All you need to do is to initiate the transaction and leave it for us to take it off ranging from documentation, shipping clearing and sending to your doorposts. So, that has kept the company going for these decades that we have been in this business. And we have also won awards as the best logistics company in China so many times regarding these services.
Operating in a country like Nigeria where values are not usually what most organizations are known for. For your own organisation, what are those core values that drive your organisation?
Yeah! That is a very good point. You know integrity is one of our core values. I think there is a book I’m writing on integrity. Our company, we want to build on trust and also build on integrity. Some who are dealing with us are doing so because of this integrity. You can imagine now, I remember somebody telling me that he sent money to one of the shipping agents in China and lost about $80,000 or $100,000 from the guy. The guy is nowhere to be reached. You can see where lack of trust comes in. So, we make it as point of duty in our company to cultivate the habit of integrity and trust. And secondly, we try to do our best ensuring that when we say you are receiving your goods within this period of time, we work tirelessly ensuring that the duration we give you, you receive your goods within that duration. That is trust, that’s competence. So, on our flyers, there are three cardinal points we send out to customers. Speed, safety of customers’ goods and accuracy. These are the three major points that distinguish us from others. We tell you, you will it receive so and so day, we make sure that within that period, you get your goods. One, we make sure that the speed of which we ship your goods using the fastest shipping companies and also the safety. So, we build on these three cardinal points, trust, integrity and accuracy. They’re very important to us.
You are one of the big players in the maritime industry, you recently established Uzotex Bonded Terminal, can you tell us why you decided to go into that area and how has it been so far?
Okay! What is in our mind is hitch-free transaction from our customers. So, Bonded Terminal is one of the chains of our businesses because few of the containers that come into this country, may be 70 per cent of them, are being sent to different bonded terminals. So, it has been on company’s plans for years to expand our operation on the side of the bonded terminal and we are so happy that we were granted the licence to operate the bonded terminal. So, why we went there is to assist the Federal Government to decongest the ports. Two, to assist our customers that want their containers to be sent to our bonded terminal to fast-track it through the Customs on duty in our bonded terminal. Three, ensure prompt monitoring of their consignment, may be you ship either to us or anywhere, we monitor it and ensure that we get it on time. But the main reason is that it has been in our expansion plan to have a bonded terminal. There was a time in this country, which you know the seaport was crowded with so many containers. So, that time, our container will arrive, it will take about two to three weeks to get to bonded terminals. Even to discharge it from the seaport, it takes either a week. For it to be offloaded, it takes a longer time. So, we start thinking of what we can do to join other people that are in this bonded terminal services. That is what prompted the idea of having a bonded terminal to assist the Federal Government in helping to decongest Apapa port and make it easier for this industry to thrive. So, that is the most important thing that led us into going into that not that we don’t have any other business to do but we felt it will help our customers and to also help the nation as well.
The past few years have not been easy for business operators to operate in Nigeria. Recently, some of the big multinationals exited the country, what is the secret behind your consistency?
I want to take it on the side of the logistics. Because on the side of the manufacturing aspect, which is one of the things we are into, there has been a whole lot. But on the side of logistics, we have been faced with a whole lot of challenges. One, no more short term planning. We don’t even have it any longer because of the dollar frustration. Then again, the cost of clearing within one or two months or three months, Customs has increased their duty more than five or six times. In fact, to clear a container, as I speak to you now, before to clear a container of 40 feet, was around N7 million. But now to clear a container of 40 feet is about N17 to N18 million even N19 million as I speak to you. You can imagine this. So, many bonded terminals are closing because people no longer import because of the high rate of exchange rates. So, it’s too difficult for these clients to operate in such an environment. Most of our clients have placed orders when the dollar was N800. The last time I was on a TV programme, I tried to give them one analysis. The analysis is this, that this order we placed in our company and as at the time we placed that order, the cost of this order, maybe if you want to times that, maybe $100,000, is around N80 million. Now, the same order, those that place this order now, find it difficult paying for the completion of their goods. Meaning that as of now, when dollars was N1, 600, N1,700, or the time it was N1,900, you are talking of N160 million to complete that. Where will you get the money? That’s a lot of money. So, the whole company has been affected seriously. And there is no replacement. Like we have factories that produce these items. Why prices of commodity will keep rising in this country is because there is no alternative of all these products. Assuming we have alternatives, rights, there will be competition. So, when the products are scarce in the market, you know what that means, it goes high. It keeps rising. And that’s why so many things are rising in this country. So for us, it has not been easy on our part surviving in this industry. But because of the passion we have, we can’t quit. Because we really want to get it right as a company. But it’s not easy. So, you can’t blame companies quitting these businesses. I want to tell you, this morning, I had a meeting with my staff. To break even is too difficult. We just finished the meeting. When I got updates from the logistics section. To break even, to make even profit is too difficult for us. One, because people are no longer importing. Only few companies are importing. Those that placed their orders cannot even pay to complete that order not to talk of shipment. Before, to ship a container, if you calculate with Nigerian money, maybe they charge you $4,000, That’s around N800,000. But now you’re talking about N3 million or N4 million. So it’s not easy. So you can’t blame the people that are closing down or leaving the country. It’s really devastating for us businessmen.
What are some of those strategies you have been using to weather the storm?
Just as I said, whether method or no method, it is the passion behind what we are doing, we have the passion and the desire to assist our customers that keeps us going. This is a trying time for us. But we can’t quit now. We want our customers to have hitch-free transactions, okay? It’s not easy for any company. If any company can tell you it’s easy, fine. We have explored all strategies to keep the company going. And it’s failing. We can’t control the CBN. We can’t control the monetary policy. That is what’s hurting us so much. So, we had a meeting. We said, what do we do? So, what we do is to ensure that some of the customers are patronising us now, we try to keep them by trying to let them know that these challenges may not last because you must encourage them. That this is a trying time. Even the President also affirmed that this is a trying time. Governors affirmed that this is a trying time. So, there’s no other strategy. The only thing, whatever comes up, we try to make sure that we maximise it.
In the manufacturing sector, Shanghai Engineering Works and Industrial Limited are very competitive, how have you been able to keep the company going to satisfy the needs of the customers, construction industry, and other sectors in this volatile economy?
You see, a whole lot is involved. That is something I know. I don’t know whether you have participated in some of the conferences I did in this office because I run an NGO, good governance initiative, one of the strong advocate of a lack of steady power supply, a reason why a government should improve on power. But what really brought about Shanghai Engineering Works and Industrial Limited was a result of the call from the Nigerian Government when they visited China in 2011. That’s what led to Shanghai Engineering Works and Industries. They made a passionate appeal dealing with Nigerians in Diaspora to repatriate their funds home. I heeded that very call that is when the then president Goodlock Jonathan sent the former Governor Benue, Ortom to come to my factory and commission it. I remember telling him in their visit to China that pleading with Nigerians in Diaspora to repatriate their funds back home is not the issue. The issue is steady power supply. I also told them about the Canton Fair that always takes place in China in April and October. The industrial section of that fair, Nigerians don’t go there because they keep wondering where the electricity to power all these machines is. But some of us took those bold steps and went into that very section and imported these heavy-duty machinery and I was telling them that as I speak to them now, it’s too devastating. It’s like some of the promises made are just like a mirage and they said that I, the company, we are the ones that will look for where to get light in my factory. We pushed and we got light in that factory. It took me almost N30 to N40 million to get light in that factory and they call it a dedicated line and that line is not consistent and the kind of the production we do, once there is a break in transmission of power, the whole material will be stock in the machine. It took about one to three hours to restart it. It has to freshen up and start again. So, we need a steady power supply. All efforts to solve that problem are not yielding fruit. We bought 1000 kva, 500 kva, 800 kva generators. Before you knew it, with the high rise in price of diesel, things are tougher.
The other day I was in London when they interviewed me, I told them that before a diesel was N270 per liter. Now, it is about N1,000 or something. When they interviewed me in London then, diesel was N700. I was telling them; how do we break even? Now, I was giving them the comparative analysis that if we spent 10,000 liters on a generator in a month, it means we spent about N20 to N30 million on diesel alone. And we find it difficult breaking even. I think I made that known to them when I was giving this interview. And we can’t continue this way. Yeah, talking of the diesel, the diesel has gone up. And when the price of diesel goes up, the raw materials increase. I mean, the selling price. Nigerians are not even having enough money in their hands. When you have enough money in your hand, you can talk of building and so on. So this thing affected our buyers, one because as a manufacturer, you have to input the cost of diesel, the cost of maintenance of this generator, overhead cost into it before you sell. So, as a result, we are not finding it easy. As I speak to you now, the operation in that factory has been reduced to almost 30 per cent. If you are operating at optimal about 80 per cent, now, it’s about 30 or 40 per cent. We have a downside because of this hardship. One, because of the increase in dollars, because of the increase in raw materials. Most of it is the lack of a steady power supply. That is the worst so far. We have downsized almost 70 per cent of our staff. Our staff have been asked to leave that very company in Owerri. Even here as well we have done that because of this issue. So, it’s not really good. And our plans before, I remember testifying to the media that some customers, when we started newly, are happy that some of these products that I’m buying from abroad, they buy from us. Even from Port Harcourt, one guy came and said, so you can produce this water connector, you can produce this electrical pipe they are ordering from Turkey and China. You can see the excitement in this guy. The guy traced my number and got my number and said, you have really relieved us of the pain of looking for dollars. You can imagine why we bought so many products we don’t produce. That’s why we keep looking for dollars. If there’s any assistance on my part, maybe if we have a steady power supply, some of these dollars will not even go out. I mean, this scarcity of dollars. If we have that conducive environment for our factories, things will be better. I also cited China as a case study. In China, when you think of going into a factory, the government is there to make sure that you have access to the land where you have the factories and to make sure that you have the roads to that land. They also want to investigate what you are producing and also give you money at a single digit interest rate. They also tax you, that’s what they call rebate. That’s the amount of dollars you bring in; you have 10 per cent of it. I think I said that in a TV interview last two months. I was telling them the model that China uses. I think they use it in their news as well. So, this is the model, once you indicate interest, they will make sure you have constant power supply. They will try to fund you with single digit interest, some 3 per cent. The last loan I’m getting from a bank, let me not mention the name, I got it at 27 per cent and some banks are even taking of 31 per cent. How do you survive? While in China, single digit, you can investigate this. My brother, how do you survive in this kind of environment? It’s too devastating. In fact, I want to announce to any factory that is still in in this country, government should praise the owners that they are having nightmares on a daily basis to sustain this economy.
Apart from being an industrialist, you are also an advocate of good governance, with a profound presence in a lot of good governance initiatives. How have you been able to combine this with your numerous business interests?
The issue is that the love I have for this country is huge. I can’t be any other nationality. I can’t be Togolese or Ghanaian, I’m a Nigerian. So, my wish is to see our country grow. And I keep telling people that part of the reason why I’m in China or anywhere is to repatriate the good things there into our country, Nigeria. What informed the concept of this Good Governance Initiative that focuses on steady power supply is that 80 per cent of what we use in this country is from abroad, mainly China. 80 or 90 per cent of what we consume is from abroad. I have lived in China where steady power supplies contributed to where they are today. That’s because they have light in their rooms and wherever they find themselves. So, the idea to develop something will come. Somebody will conceive one idea, start mixing wires together and invent something and start exporting to Nigeria or any other part of the country. So, you can imagine what the conducive environment has done. So, I said to myself, now what would I do? I can’t be in my comfort zone and be criticizing the government or doing side talks. Let me run, open up and let me have something I call an NGO, which I can converse with the government with. I remember talking to Barth Nnaji. I remember talking to all the previous power ministers. I have tried to engage them in the need for them to work so hard. I also said, look, it’s not about having an eight-point agenda. Make it a one-point agenda. Not that you should not concentrate on others. Power is paramount. Without power, we are wasting our time in this country. Without a steady power supply, brother, we are wasting our time in this country. I have been advocating steady power supply for years. I’ve been doing this for over 10 or 15 years. Lack of steady power supply has denied many Nigerians so many things. Many people have lost their lives due to fumes from the generator people call ‘I pass my neigbour’ or from generator explosions. Many families have been wiped out completely. The data is there. That is why I’m on the issue of steady power supply in the country. But national development should also be on my mind. And I wrote and I tried to offer solutions. Last few years, I came into this country with about 21 investors. Yeah, 21 investors. From these investors, there are some that wanted to invest in energy and power. They also came along with me. They got frustrated and so on. So, I’m trying to marry them together. But the whole concept, the whole idea is that I want to see what I can contribute to my dear country.
So, I can’t only use the income I made from my business. My children, if they grow up and find out that we are still saying “up in NEPA.”, that’s bad. There was a time I went out with my family, they were asking all kinds of questions. “Daddy, they don’t take light here and that kind of thing, this and that. And some of them want to have a good life. They want to reside abroad. So, when that continues, what do we do? I felt that I really needed to do something. That’s why I run this NGO. My NGO exists purely on, apart from my foundation, on the Good Governance Initiative. I have a foundation. But this NGO, Good Governance Initiative, is only purely on power issues. And to the glory of God, I will not give up on the power issue until it is resolved in this country.
In view of the current economic challenges, occasioned by forex and energy crisis, how do you survive? How do you break even?
As I told you, surviving these challenges is not easy. We’re not breaking even as of now. I said it before. Many businesses are not making money. If anybody tells you A or B is making money under this unconducive environment, the person should prove it.
When you are into manufacturing, see, one thing I want the government to know is this, you allow the dollar to go up, what alternative do you have on ground? See, there was a time I was so anxious, pleading for steady power supply. My customers were asking me if there is steady power supply, they would stop importing. So you don’t want to be in business again, I told them that is not my own. There was a period I got threatened from one of the guys dealing with generator supply and say oga, do you want to close down my business? He threatened me. So you are one of this advocates you don’t want us to still be selling generator. That was a time they even argued that whether they should ban the use of generators. I advocated for it, ranging from the Presidency down to the list person that we should stop using generator. I advocated for it. There was a time I even called for social contact that if you want to rule this nation, give us power within so and so year. That the party should leave. I said all that and that should tell you the passion I have for steady power supply. You know I have said all that during my interview, I’m not against any government at all. I’m just putting what I can offer in my lifetime. You media should let them know that Festus is saying without steady power supply, dollar will keep going up. Let them know that exchange rate will not come down if there is no steady power supply, the issue of price of commodities can’t come down without steady power supply. Steady power supply is the master key that can change things in this country because the population and the brain. The whole situation is so frustrating. We are just managing. Every company in this country is managing, the customers we have we are trying to keep them. We can’t quit, if we quit, how do we contribute to the development of the economy. We keep on struggling. Like in my factory here now, we are dealing on security doors. We print designs on security doors and we distribute to all states. You can imagine if a company like this is not existing and you want to buy security doors and you find it difficult to get it from the welders and the design you want, you will be thinking from importing from abroad. So we are helping to cushion the effect in as much we are not getting anything. I know how many doors we went across every month. We have about six production lines on security doors in our factory. We make sure that we reach out to all the states. You can imagine if we have not been encouraged. I have to go and borrow money from the bank with 30 per cent interest rate. I have to take it to make sure I keep things going.
How well do you think the manufacturing sector can be assisted by the federal government to survive the economic downturn and ensure many do not quit?
I told them in my interview with a TV station that they should bring out intervention fund with immediate effects. Locate all the genuine and committed manufacturers through the manufacturing association, give them intervention fund either subsidize the diesel. Diesel is going for N1, 600. They can take it down to N800 and give them a channel where they can buy the diesel.
Two, create an intervention fund that is accessible for factories at a cheaper rate, single percent interest rate. They should create an intervention fund that will be accessible for a long term or 10 years payback. Even BoI loan is about 18 or 20 per cent now. No BoI loan is single percent.
Quote me anywhere! In fact, to crown it all, all efforts to get loan from BoI has been frustrated even they have taken 1 per cent of commitment fee from account of either N300 million. They have not giving me that loan since 5 years now because they want you to go and bring either your land from the village. Now, I gave them my C of O and so on, they want a bank to give you PG, bank said they couldn’t give you PG that BoI is making the whole profit. That put an end to that transaction. Up till now, they are still with my money and they said that money is non-refundable. You people should let them know what I’m saying now; they are holding my money over five years now. 1 per cent of N300 million, they are still holding it. They can’t refund the money and they can’t give me the loan because no bank accepts to give me PG and that is what so many manufacturing are passing through. So I have to go to commercial bank that loan me at almost 30 per cent. For now the state we are covering is not have of the state in this country. You can imagine when I get enough fund from BoI, you can imagine what will happen in this place.
Recently, you gifted a 3-bedroom apartment to a woman as apart of your philanthropist work. What prompt you to engage in this philanthropist service?
I think it is not only a 3 bedroom but I don’t want to publicize this seriously because it was an inspiration and call I received to do it despite the financial challenges. Before now in the downtown south as of last 12 years, there is no single presence of borehole in that area. Through my foundation, Uzotex foundation, we were able to give almost all the communities in downtown south borehole. Before, the only source of water was Orashi river through my foundation. It is a thing of joy that people no longer go to the stream to fetch water. Before some of the big men will just sunk a borehole every festive period and left. But I sunk borehole in all the Eze palace, I set up a committee to monitor it and gave a mandate that all must run day and night.
