Why Bayer has staged a comeback to Nigeria’s economy, by Konig
Bayer is a company with 150 years of history in science and innovation that we transform into products to improve the lives of people.
Indeed, our global mission at Bayer stands for better life for people in the areas of healthcare, nutrition and agriculture and throughout the whole history of the company, we have made the mission the hallmark of our operations.
We have sincerely been developing things that meet the needs of the people. Let me start by giving you few examples.
In the healthcare sector, we have pharmaceutical business and we specialise in areas like human cell, cardiovascular diseases and cancer treatment.
Also, we also have over-the-counter consumer care products. In agriculture, we have a strong crop protection business where we produce materials that help farmers to improve their yields, which in turn improve the quality of food of consumers.
We are also into hightech materials and these are formulas that have been used, for example, in furniture application, insulation of refrigerators or pipelines or housing for modern appliances. Those are the businesses which fundamentally rely on science and innovation that we develop into the market.
You divested your interest in Nigeria business some decades ago. What are the factors that have now renewed your interest in the country’s economy?
Well, Bayer has a long history in Africa. We have been active in the continent for almost 120 years of the 150 years of our history and we have in the past been very successful on the African continent, including Nigeria.
If you look back some 15 to 20 years ago, there were a lot of worries and concerns about developing Africa, about political stability, about the future of the continent and at that point in time, we had to reduce our presence not only in Nigeria but in the whole of Africa, which reached a low point in 2007.
But then, we have renewed positive interest particularly in countries like Nigeria.
In 2011, we looked at our strategies to work with Africa again and have decided that now is a good time to step up and increase our presence in the continent, identifying which of the countries we wanted to focus on because we can’t focus on all countries and obviously Nigeria, with the combination of size, potential and development, we started to see it as one of the most important countries for us to focus on.
That informed our decision to establish a legal entity here in Nigeria and other countries. And we believe that Nigeria has a potential to become a very important market.
Besides, when you look at the industry structure in Nigeria, there is a big determination of the part of the government and the population to promote the fortunes of the real sector.
This time around, which products are you offering the Nigerian market?
In Nigeria, we would, according to our strategy, focus on healthcare and crop science. In healthcare, we have already started. We are working on women’s health, family planning, among others.
In respect of agriculture, we know that the country has a comparative advantage and the farmers are now looking at how to increase their yields and improve the quality.
We have technical experts who have experiences from other countries who know how to help farmers in their operations. We are in the business of selling those products that will achieve this objective.
We also engage in partnerships where we try to bring smaller farmers to get over to large supermarket chains. We would also start to develop our consumer care brands that we sell to consumers directly.
We are also working on developing our consumer market where we can sell to consumers directly. We already have a very significant business in material science. That business would be an independent company next year but it will still be a very significant business in Nigeria.
Which facilities are you building in the country now for your operational start-off?
We have created a legal entity which in itself requires infrastructure, key system and so on to build up an organization. We are already building a workforce for the commencement of our operations.
What about production facilities?
We appreciate the importance of local production, but right now, we have no concrete plan for manufacturing plants until after we have properly assessed the local market. This has been the trend of our operations worldwide. That was how we started in places like China, where we now have a big production base.
Specifically, in respect of agriculture, how are you strategizing to assist the farmers in the country to improve on their yields?
We are bringing in the technical expertise about our products, the application and the connection of farmers with the market. We are investing quite a big amount of money into training our employees that we are in the process of hiring and build up the infrastructure to make sure that we can help farmers to improve on their yields. The next step is bringing special seedings into the country that can lead to increase in yields.
How do you plan to go into agro processing business, in line with Federal Government’s blueprint for the real sector?
Processing is not a core area of our business but we do cooperate with the processing sector and help farmers understand what the requirements of the processing industry are.
That is the core challenge confronting small scale farmers. They are not able to approach large agriculture processing companies. Our business is helping farmers with better yields for the market.
Coming back into the Nigeria’s economy, you must have been aware of the challenges within the system. How prepared are you for these challenges?
First of all, I need to stress that Bayer is a company that has been successful in other emerging economies in the past. We have adequate experience in dealing with challenges. Our business in Nigeria is on a long-term basis and coping with the challenges over the years is what we have factored into our operations here. We have the necessary flexibility which is important in a market like Nigeria in other to deal with the challenges.
We are not compromising with regard to integrity, compliance with rules and regulations, anti-corruption activities. We rather expect a long term return than compromise. In summary, we have the experience and we have the patience. Indeed, the more I learn about the challenges in the region, the more I am convinced that through Bayer’s research and innovative products, we can contribute significantly to improving the daily lives of people throughout Africa.
To which extent were you influenced by the Federal Government’s investment drive?
Certainly, if you see a government taking good initiatives in building infrastructure and taking steps to improve investment climate, investors would very much be attracted to such an economy.
While there is no concrete project that I will say attracted us here, we however appreciate the interest of this government towards building infrastructure.
The government is generating policies that look fair and attractive to us and it is also prepared to fight corruption and protect intellectual property.
These are important factors to us. We see that Nigeria is on the positive path and that has influenced us. If we don’t have that confidence in the economy, we would not be here.
What are your plans for other countries within the region? Are you expanding your business too in line with what you are starting in Nigeria?
In 2014, under the region of West-Central Africa, we established two new legal entities here in Lagos, Nigeria and Abidjan, Ivory Coast. In East Africa, we have set up a new legal entity in Tanzania and a representative office in Ethiopia.
Together with the companies in Morocco, Kenya and South Africa as hubs for the Bayer country groups in North, East and Southern Africa, we now have the infrastructure in place to make this increased footprint a reality.
I must point out that Africa’s economies are experiencing robust development, as its GDP growth rate has been over five per cent for many years. And the West Central Africa region is no exception with mid-to-high single digit GDP growth in 2014.
This development is reflected in all of Bayer’s industries. Indeed, in 2015, sales of the country group are expected to show a growth rate well above market. It is our long-term commitment to promote growth in the region and the new legal entities will give our businesses the foundations on which to develop and prosper. The West-Central Africa region is today not only one of the most dynamic in which Bayer operates, but also a very diverse one. It covers 24 countries and is home to more than 400 million people, speaking more than 1,500 languages.
Demographics are characterised by strong population growth, with a large proportion of young people and a growing middle class. To supply these markets better, we need customised products and solution offerings. We are convinced that our mission ‘Science for a Better Life’ and our product portfolio addresses precisely the needs of Africa.
What is your comment about the political development in the country, especially for business?
We are business people and not politicians. It is hard for us to comment on politics but of course, there was smooth change in government and the election was something that gives us a lot of confidence. Political stability gives a stable environment for a long oriented business groups like us. We are very happy with the current development in Nigeria.
Gemini Pharmaceuticals took over your business interest in the country when you divested from the economy. Have there been any direct business relationship between Bayer and this successor company?
How then have you been able to build your wholesale and retail business network?
Germini Pharmaceuticals came after Bayer left the country and took over the production plant.
We are starting afresh and we are taking on new employees for our new operations, according to the strategy we have mapped out.
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