In this interview, the Managing Director and Chief Executive Officer, Industrial & Medical Gases (IMG) Nigeria PLC, Mr Ayodeji Oseni, offers some tips on the policies that the Federal Government can initiate to drive activities in the industrial and manufacturing gases Industry in Nigeria and why IMG is resilient
Can you provide an insight into the current structure of Industrial and Medical Gases (IMG) Nigeria PLC, with the acquisition of a 60 percent stake of BOC Gases Nigeria Plc. by TY Holdings?
We are 100 percent a Nigeria company with an additional 60 percent acquisition. TY Holdings are now majority shareholders with 72 percent shareholding and our other esteemed Nigerian shareholders hold the balance 28 percent. We are proudly Nigerian.
Was the major acquisition by TY Holdings mainly responsible for the unveiling of new logo for IMG in December 2021 and what are the benefits of the new corporate identity?
Our new identity and logo definitely reflect our new ownership structure and a bold statement by the Board and Management Team to chart a new and ambitious trajectory for our business.
Succinctly put, the new corporate identity has repositioned our company positively in the eyes of our esteemed customers, shareholders and industry. We are now more than before obligated to deliver on our core values, innovation, and business objectives.
Congratulations on the successful performance of Industrial and Medical Gases (IMG) Nigeria PLC in its 2022 financial year despite the headwinds in the operating environment. How did the Company achieve this?
Focus and Teamwork. These are the two golden words that positively & significantly impacted our operating strategy and success in 2022 despite the headwinds. Focus and teamwork permeated every aspect of our business; from manufacturing to maximising internal efficiencies, deliberate cost saving initiatives, accomplishment of promised deliverables to our esteemed customers and clarity of purpose & objectives of all internal stakeholders.
Can you describe the mood and comments of the Company’s shareholders during the recent Annual General Meeting (AGM)?
The shareholders were happy and impressed with the financial statements of the company despite the myriad of challenges in an inclement business environment. Expectedly, they pointed out areas of improvement and wished the Board and Management a very successful 2023 performance.
Why did IMG raise N1.2billion through a debt instrument recently and can this translate into shareholder value ?
The answer is a BIG yes, Shareholders will definitely get higher value for their investment. Following our new look and alignment of strategic intentions, we are taking a strategic leap forward toward expanding our asset base and by extension our business and product offerings in the next three years. This necessitated the debt instrument, which is our first major step in a series of steps towards our objective. I am happy to say also that the N1.2billion has been fully paid back to the investing public.
Beyond the previous challenges in the operating environment, the Nigerian economy is facing rising inflation, general complaints over the pains of removal of fuel subsidy, controversy on implementation of unified exchange rate and prohibitive interest rate, what measures is IMG putting in place to sustain profitability and create value for its shareholders?
As a business we continue to leverage on 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, maximisation of internal efficiencies and maximisation of strategic business opportunities are some of our daily management tools to combat the downsides of the ever changing market place as dictated by the Nigeria economy.
How does the government’s unstable policies affect companies in the industrial gases and allied products?
This inquiry is fast turning to a platitude of sort. It is apparent that the unstable policies of the government are formulated to stifle manufacturing in Nigeria, especially 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 provision of energy? Government policies are not favourable at all to manufacturing concerns as at date.
Are there policy measures that the Federal Government can put in place to enhance operations of companies in your sector?
Yes, and very much so. Our sector is constantly importing plant spares, buying equipment, involved in daily global logistics of exporting, and importing finished goods and heavily dependent on cost effective energy availability to power plant and machinery for production. The federal government has always been encouraged to look into friendly policies that will assist alleviate some of the surmountable bottlenecks that are ‘man made’ around these concerns.
Packaged gases are delivered majorly 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 / expiration dates, has a visible identification number and the ownership markings 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 investigate and trace the origin of such cylinders and prevent such incidents. Another policy that is long overdue is for the government to
critically reevaluate the entry level requirements into the Industrial and Medical Gases manufacturing industry. This policy will also directly speak to the distribution, handling, compression, transportation, haulage and sale or resale of such gases without appropriate government authorization, certifications, license etc.
In addition to the several positives embedded in this kind of policy, the inherent safety of lives and property advantage cannot be over emphasised: a critical role of government. In today’s Nigeria, anyone that has access to industrial or medical gases or any gas for that matter, compress, transport, or sell and resell with no recourse to whether the primary objective of their business is licensed by the government to engage in such practices.
Can you mention some methods that can be used to curtail fake products in our market?
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 are capitaliSing 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 Organization and are very critical to life and existence.
In the industrial and Medical Gases industry, fake products include products that are available in the market as underfilled, without a certificate of quantity / quality tag, cylinder test dates, without corporate identification markings and unbelievably underpriced. The insistence of discerning customers for 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.
How does scarcity and high cost of forex affect IMG’s sourcing of raw materials?
Scarcity of forex has brought about humongous financial losses and pains for our business. We lost revenue as we could not import production raw materials as at when 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 we suffered plant downtimes due to inability to source for forex to buy plant spares or pay in good time for the same.
Any plan to float a subsidiary for backward integration?
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), have become part of the key performance indicators for many in the company, given the nature of IMG’s operation, how does the Company align this to its shareholders and other stakeholders’ expectations?
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 on our showings.
How can IMG sustain its status as a major brand in this inclement operating environment?
IMG will continue to seek out creative ways to engage her esteemed customers in the coming years on her products and application processes. We believe this will assist in no small measure to empower our target market and the general publicas we seek to position our brand and contribute positively to our industry and country at large.