We train, empower Nigerians in food processing across 36 states — Spectra MD, Chief Kuteyi
In this interview with Uthman Salami, Hope Christopher and Abimbola Abatta, the Managing Director, Spectra Industries Limited, Chief Duro Kuteyi, highlights the challenges and prospects of the Small and Medium-sized Enterprises (SMEs) in Nigeria. He also drew attention to the impact of the industry on Nigeria’s economy, while stressing the need for government’s support.
What would you say are the hallmarks, challenges and prospects of SMEs and what it hopes to do in the coming years?
It is a sin to be in the SME sector in Nigeria. You are bound to face many challenges. You will get to a point that you’ll say, “I better quit.” You are bound to face problems with the banks. The banks are running after you to repay, and if you can’t find money to repay, you are in soup. And the situation on ground has made it impossible for most people to pay back their loans. Before getting the loan, you have to pledge collateral higher than what you are asking for. When you finally get the loan to get enough foreign exchange to buy the machinery may take more than one year and by the time you are half way into collecting foreign exchange, repayment has started, interest is debited and exchange has gone up. How on earth will SMEs be able to pay back? Interest rate must have taken over such that the money you have taken cannot be enough again. If you take a loan of 100 million naira, for instance, you start looking for foreign exchange. As the bank bidding for foreign exchange continues, Naira continues to depreciate day by day and the SME continues in debt. By the time you finally see the foreign exchange, the price of machine has gone up. At that point, if you say you are no longer taking it because of what has happened, the bank will deduct interest, all charges, and you will not be able to continue with the business and they hold on to your collateral. How will it be possible to pay back? Another one is when you are set up and are paying back the loan, suddenly, you cannot get raw materials or the prices of raw materials have gone up. You know, this time around is even more terrible than what it was before. The cost of raw material has gone up, and you can’t just increase the prices so you can be working without profit because those who will take it from you are complaining about high price, difficult situation, among others, and this makes the payment terrible. In all of these, we have had our own share of trouble with banks because of inability to pay back on time several times, but in one way or the other, God intervened.
When we were so hard up and without means of paying back our loan, God intervened and we invented two systems to sort things out: (1) Packaging contract where we packaged 200million recharge cards. (2) Another time was when there was glut in the tomato sector, we designed a training program that was sponsored by Bank of Industry and Global Alliance for Improved Nutrition (GAIN). As professionals, we know what we can teach people (to salvage the situation of food spoilage)and we can assist others. So, we designed a project to train people on different food processing courses.
So, you can see that without having the knowledge, one will just close down and business hypertension under the wicked hand of the banks. You talk of raw materials; you talk of working capital. You talk of even the money to buy new machines and improve your technology. They are not readily available to execute. These are some of the things that should actually be looked into if we want SMEs to move forward. And again, the government of the day should partner with the SMEs to invest in SMEs and never say the government has no business in businesses.
How do you source for materials? Do you import or extract them locally?
We get all our materials locally. We don’t import raw materials. The only thing we import is machinery to produce, and with this, I think we deserve to be assisted. What we have done in recent times is to produce for other industries. We identify the materials that are imported into Nigeria which we have raw materials for, and we produce for other industries. That’s what we are doing in relation to SOBAKE. SOBAKE is our brand of soya flour, used by industries. The seasonings you use at home have soya flour in them. Even the beverage you drink, soya flour is in it. The bread you eat, there is soya in it. So, we supply and you may not hear about our product because those we supply are the ones we are assisting to promote their brands by making sure that they have this raw material. When you eat bread and you see me thanking you, there is a reason for it. As long as these companies are producing and making profit, we are happy and at the same time, we are also bringing out the same soya in a refined form so that it can compete with powdered milk and you can use it for soya milk or for yoghurt. We call the yoghurt we made out of it soghurt. The more people we have doing the soghurt, the better for us and that is why we are training people on how to make yoghurt out of soya flour. We have started, and a lot of people will start producing the soya yoghurt in incubator centres across Nigeria as we have a working relationship with them. I also graduated from the incubator centre in 1998. They are in the 36 states of the country. If we can have people making the soya yoghurt across the 36 states, it will be part of our own contribution to the development of food processing in Nigeria and reducing unemployment and empowering a lot of youths in doing this business. We did the same thing for tomatoes. We trained people and made them understand that they can make tomatoes in their kitchen and they don’t need the imported ones. Because in the imported ones, they bring in concentrates, dilute with water, put sugar, put starch, put colour. That’s why it’s as red as what you see. It’s not the natural colour of tomato. We developed our own process and trained people on this process and they are using it, it can even be used for jollof rice. It is good, and then you have rest of mind that you’re not eating chemical. That’s where we are and then in our own corner here, we make a lot of food from the soya flour like HYFIBA. HYFIBA is a swallow made from sorghum and soya. When you prepare it, it’s like amala, but it is richer than amala because of the high protein content of soya and because it even absorbs water and gives you more volume than ordinary amala or any other food. It is a good meal for adults and infants, and it can be made into pap or like oat in the morning. Another good thing about the Hyfiba is, you can use it to bake cakes as a non-gluten option. Our name, Spectra, is derived from a white ray of light that strikes prism and the prism separates it into seven colours. The prism is a glass and when the light comes in, coming out the other way, it will be separated into seven colours. That’s where you get your primary colours from. This means with one raw material, you can make many products. So if one road closes, another one will open. We have soya coming as raw material that leads to HYFIBA that leads to Chewie. Chewie is a snack made from sorghum, maize and soya.
The second major raw material we use is Cocoa, and Cocoa will go into Suco. We started with Suco, and now we are advancing the Suco by adding lecithin to it. The use of lecithin in Suco was hinged on the fact that as a company, we call ourselves a functional food company. We make functional foods. The food that will do one or two good things in your body like preventing diseases or curing diseases in you. With the lecithin in Suco, it prevents diseases. If you look at the medicine given to people with high cholesterol, it has lecithin. We have put it inside Suco so that it will break cholesterol in the blood system and you will not need to have any fear of high cholesterol in your body system. The lecithin will emulsify the cholesterol and break it into pieces and they won’t be able to come together again. Because cholesterol in the blood system could come in lumps. And then the wall of the blood vessels are also lined with cholesterol. So along the blood vessel, there could be constriction where the lumps in the blood can form blockade When the thing is narrow and the one inside the blood is rolling, when it gets there, it stops. When it stops, it might be close to your heart, and it can cause heart attack. If it is close to your brain, that’s stroke. So, there is need to break these things into tiny bits that cannot come together. That’s the work of lecithin. SUCO are already in the supermarket. They are in big pouch and plastic containers.
How can you describe the government’s assistance? What has the government done to help SMEs to compete with foreign companies?
This thing is like if there is a competition between states, like Federal Government setting up a fund that will be given out at the first stage, second stage, third stage to those who are able to promote their SMEs. Everybody will be competing on how to fund their SMEs. If different states could export, you would see many states promoting their SMEs to export. There should be one form of incentive or the other to get them through. For example, we have saved Nigeria many million dollars in terms of foreign exchange by producing for those companies that depended on imported semi-finished raw materials before. These companies are satisfied with our products as their raw materials.
If we have saved Millions of dollars for the country by producing raw materials which were earlier being imported, we deserve part of this foreign exchange to buy machines for production just as export expansion grant is given to exporters.
Recently, the Federal Government introduced N10 exercise duty on carbonated drinks. How is this policy affecting spectra and other SMEs in the country?
This is not a good policy and as far as we in the SME are concerned, it will reduce the number of SMEs and increase the population of unemployed people. I don’t expect SMEs to be part of it. Because if multinationals are taxed they have some shock absorbers unlike SMEs. I don’t expect the government to tax any SME. In general this is not the right time to overtax any company because every company is already overtaxed and trying to recover from the effect of COVID-19 that has ravaged the entire world. All companies that are surviving now deserve one form of palliative or another There’s a lot for the government to do if they really want to promote SMEs in Nigeria. These are the things that should be done in order to make SMEs vibrant. Many people are ready to work. Many people are ready to produce and manufacture, but they don’t receive the encouragement.
Since the second tenure of President Muhammadu Buhari, we have seen insecurity in Nigeria escalating. How does insecurity hamper the circulation of your products across the country? How is it affecting SMEs?
We send our products to different parts of the country, and we hire vehicles for this. They know the road and where to pass. They know where not to go, and they know where to park on the road so that they will not be attacked. We have not had much of that problem. The only problem we have is low sales. In areas where people have been killed, who will buy the products? So, it’s something that will affect everybody, and you need to do some calculations before you move out. Also, we have to ensure we don’t go out with faulty vehicles. For instance, if we have to travel in the evening and the vehicle breaks down, we would be there till night time. The issue of security is everybody’s business. The journalists are also supposed to inform us about where the road is clear just like they do on traffic radio. So we can know the roads to avoid and which to take. For instance, journalists should be using satellites to tell us that they are at Lanlate, so don’t pass Lanlate. In recent times, there have been a lot of killings along Ibadan-Lagos express road and I think the government needs to do something fast. The state governments of the South West need to do more than what they are doing. Sometimes, it is the natives who are carrying out the kidnapping by disguising as Fulanis. They need to do more. Someone called me and said he is in Ado. He told me there is a company in the US that wanted to buy cocoa and asked if I could supply them the cocoa. I requested for their letter of intent. I received the letter that someone wrote from the US. They talked to him with the hope that he was talking to genuine people. I saw the letter and requested for more things from them but I told them I was not interested. I let them know that I knew they were yahoo boys. They were talking to me and switched to video call. I asked why, and they said they cannot see my face. I told them they do not need to see my face. He retorted that how would they not see the face of the person they are talking to and doing business with? I said they weren’t doing business with me. I asked where they were, and they claimed to be in Ado-Ekiti. I said I would meet them over the weekend and then they could meet me. From there, I just switched off.
What makes your products distinct from other products in the market?
It’s like having the customer in mind and knowing what is deficient generally like the vitamins and minerals. If you look at some of these foods made by foreigners operating in Nigeria, they don’t eat them because they know what they put inside it. Those who are producing tomato with all the chemicals don’t eat it, but we eat what we produce and we are proud of it. These are the things that we do, and since we understand our people, we know what they need and whatever we make, we first of all eat. If it goes well with me, it will definitely go well with the workers and most Nigerians. The only thing you can see is when you talk of soya. Some people react to soya; as a result of allergy. So it is always shown in the label so that those who are allergic to soya will not eat it. But if you go to Asia, you will see that they don’t die on time. They rely on soya, and that’s the strength of soya. When some people see that soya is having upper hand, they will start to publish negative news about soya. The press in the western world is stronger than the one in Asia. It is what we see that we can read. Theirs is in English and the other nation in another language so we seem to believe that what they do is the best. Now is the time for us to rise and see that soya can provide all the needs of our people because you can eat it in any form. You can turn it into meat. We may be able to do without meat. For example, the US has a product called, “Beyond meat.” It is made from soya and that’s what they use in making Burgers. What we think is meat inside sausage is actually soya. It’s just soya and technology. Technology is not waiting for anybody. With the technology, we can change its form. At a time, we used the products here to produce some few samples which we used in making pepper soup. People were taking it and didn’t know it wasn’t meat until I told them. These are the areas we are moving to because, in the food industry, if one understands the basic principles of food processing, one will not have problem. It is just like Wole Soyinka when he said, “I love my country I no go lie, na inside am, I go live am die. If e turn me so, I turn am so. E push me, I push am. I no go go.” In the same vein, this is my profession. I am not leaving. If it turns me so, I go turn am so. If one raw material finishes, I look for another raw material. I still use the same machine. That’s what we do.
How did the journey start?
That one is God’s integration. It started because I went to school. When I got in, I wanted to study Industrial Chemistry, but I came to Food Science and Technology. From there, you can imagine.
How about those who studied the same course but are not in the industry?
They don’t have to be there because we were not born to do the same thing. So it’s like when I worked in the Federal Ministry of Health, Food and Drug Administration (FDA) now NAFDAC. I was posted to the port inspection department. I went to my boss and told him I didn’t like the job. He questioned why I didn’t like it when other people were begging him to post them there. After sometime, I was posted to factory inspection department instead of asking the same question every day- “wetin dey inside container.” I didn’t intend to work for a long time in any establishment. I tried and worked for four years and left because I was transferred out of Lagos after just settling down in marriage, but I said I would rather resign than go on transfer. I have been outside since 1982. I started with plantain chips and the period spanned 1982 to the 90s. In 1985, I started a plantain farm. On the farm, I planted soya and did not know what to do with the soya, so I started experimenting what I could do with soya. It was in 2018 that I saw the full light of where I should begin the soya journey. I am confident that it was a successful journey. You can now see that when you make a mistake and step into the SME sector, you will get white hair and it will take time before you get results. But if you labour and your labour is a planned one, definitely the result will come. Someone said if you are doing anything and up to 60 years you don’t have a clear vision, you will not get clear vision till you die. It is like that in the SME space. You have to try this and that, but before you get to 60, you should have arrived and see where you are going. Those who have friends and families should be comfortable at 50. But if you start from the beginning, it takes some time. If you have N1 million to start a business and I have N10,000 to start the same business. In ten years’ time, the one of one million will be moving faster than the one of N10,000 if you know what to do. If not the business will come down while the other will be going up because he has the knowledge. They say you are what you are in ten years’ time unless you are influenced by the book you read and the people you interview.
