Firm seeks local alternatives to improve earnings amid forex scarcity
To improve its earnings in the 2017 fiscal year, Chemstar Paints Industries Nigeria Limited has unveiled a backward integration plan that will see it replacing many of its imported raw materials with local alternatives.
Indeed, the firm noted that its turnover grew by two digits, despite the harsh business environment, due to the strategic management decisions and support from customers and distributors.
The Group Managing Director and Chief Executive Officer of the company, Emmanuel Awode, explained that the business community is still grappling with issues such as the scarcity of forex to import raw materials and myriads of bottlenecks hindering investments in the nation.
Awode during the firm’s yearly customers’ forum, said: “We have begun to look inwards to seek for alternatives that we can use to replace some of the imported raw materials. This has helped us greatly and coupled with the fact that we have very loyal customers that stood by us throughout the year.
“Despite the $1 billion foreign exchange from the Central Bank of Nigeria (CBN) to manufacturers, we have not been able to access the fund, because the demand for forex is more than what the CBN disbursed, there was no way it could go round and we still have to source for our forex from the black market,” he said.
He said the paint industry has also had its fair share of the economic downturn, saying that about 60 per cent of its raw materials for production still depend largely on imports.
He said going forward in 2017, its customers and distributors should expect more from the company in terms of improvement and quality of its products, pointing out that investment in research and development would be deployed to meet the ever changing needs of its numerous consumers in the country.
“We are here to have our Chemstar customer forum and it has become a tradition. We have been doing this for the past 21 years. It is to celebrate and appreciate our customers for their loyalty and patronage of our products for the last economic year. About 95 per cent of our businesses are through our distributors and since they are doing about 90 per cent of our business, we do not have any option not to celebrate them,” he added.
He also allayed the fear of consumers over a possible increment in price of its products, noting that the company is mindful of the drastic reduction of disposable income of consumers in the nation.
The company however rewarded 185 distributors with cash rewards and household items worth over N80 million, urging them to be financially prudent and disciplined to achieve business sustainability and profitability.
“We are mindful of the reduction of disposable income of the populace. It is a very tough and challenging period, but we believe that only tough people last. We will look at some of these costs that we can bear with the hope that the situation will improve very soon,” he assured.
Earlier, the General Manager, Sales and Marketing, Chemstar Paints Industries Nigeria Limited, Fola Laguda, lauded distributors for their support to the company, advising that the fate of their businesses lies in their hands.
He said despite the challenging year for businesses in 2016, the company achieved a profitable year declaring a 2 digit growth performance during the economic year.
He assured its customers and distributors of an even more rewarding year, saying that all hands are on deck to identify areas where the company can help to boost their businesses to achieve profitability and sustainability.