‘Adequate planning saved us forex crisis’
Mouka Nigeria Limited was recently recognised by London Stock Exchange (LSE) for service excellence. The Chief Executive Officer of the company, Ray Murphy, spoke on the recognition and sundry economic issues. PAUL ADUNWOKE was there.
What does the recognition by LSE mean to you?
For us, it is commendable and as well memorable to be recognised internationally for our performance in Nigeria. London Stock Exchange put this programme together to inspire companies in Africa. We are one of the companies to Inspire Africa with proof of the dynamism and vision. It is also an opportunity for LSE to support Africa’s growth.
This involved more than 300 companies in Africa and 60 companies from Nigeria. It is a boost for Africa to industrialise faster, trade more and create millions of jobs, driving the continent forward to a future of prosperity and helping some of the world’s poorest countries stand on their own two feet.
This is demonstration that our company and others who were recognised are playing huge role in driving African economies, developing skills, creating high quality jobs and delivering growth.
Recession has been biting most manufacturers. What about your company?
Of course, 2016 was a very challenging year and I think that after 20 years of consistent five per cent average Gross Domestic Products (GDP), the country recorded negative consistently over a period, which resulted to recession.
But as the country went into recession, we adopted a new business trend, and started reinvesting. Firstly, we focused on consumers’ needs, as their incomes begin to decrease through out the year. We significantly increased our marketing budget and communicated even more with our loyal and new local partners.
Secondly, we revisited the quality of our products. Because of recession many companies reduced the quality of their products and increased prices. On the contrary, we increased the quality of our products. We consistently improved the quality of our products for over the past 18 months, with no increase in price. Thirdly, we reached out to our local consumer base. Now, we partner with over 250 loyal distributors in Nigeria. We had series of plans and meetings with them, supported and straightened their businesses. We made sure at the beginning of the year we know how many distributors actually started with us and we do that the end of the year. We also succeeded because Mouka people were committed with their job. I would say through out 2016, Mouka people were collective and productive. Because of recession many companies disengaged their workers, but we never lay off any of our employee.
How did you cope with the foreign exchange crisis?
We were affected, but we developed tactics and strategies that helped us to manage the foreign exchange situation. We developed very distinct strategies before dollar was N200, until third week of June 2016 when an adjustment was effected. We had strategy for first half of the year, which we adapted till the second half of the year. Yes, we did face foreign exchange challenges, but as a company, we were very agile to overcome those challenges. For instance, by first half of the year, money was set aside by the management to solve the challenge. So, our financial and treasury departments were agile enough and we were ahead of the challenges. Foreign exchange was an issue, but we were able to mitigate the challenges.
In terms of manufacturing mouka foam mattresses, two key chemicals are involved. I wish I could procure the two chemicals locally. Over 40 per cent of our raw materials are been sourced and procured locally.
Government is about reviving Export Expansion Grant. What is your view on this?
First of all, we do not have any plan to directly export our products at this stage. We all know our product is mattress and it is costly in terms of transportation and this makes it expensive to export. We have aspirations to extend our footprint in West African countries and beyond. But I think that will not come through export, but more like an opportunity to setup another company in those areas or merge with those there already.
What is your geographical spread in manufacturing and distribution?
First of all, we manufacture in Lagos, Benin City and Kaduna, which is three manufacturing plants. From these manufacturing plants we distribute the products. We alternate the manufacturing plants with the one in Aba and Kano. It is our concern to serve our distributors better because we depend on them to distribute the goods. We provide for them free transportation and free subsidy as well, among other benefits to make them feel better. We always come closer to them to inspire them to do more.