Mr. Ayodeji Oseni, who serves as the Managing Director and Chief Executive Officer of Industrial & Medical Gases (IMG) Nigeria Plc, possesses a wealth of experience in business development, marketing, and management. In a candid discussion with InfoStride News, he shares valuable insights on the policies that the Federal Government of Nigeria could enact to stimulate growth within the industrial and manufacturing gases industry in the country.
InfoStride News: How do the government’s inconsistent policies impact companies in the industrial gases and allied products sector?
Ayodeji Oseni: The issue of government policies and their inconsistency is becoming increasingly repetitive. It is evident that the unstable policies of the government are designed in a manner that hampers manufacturing in Nigeria, particularly within the industrial gases and allied products sector. For instance, let’s delve into the foreign exchange situation, particularly concerning its availability and accessibility.
How do we manage our forex obligations to foreign suppliers for essential requirements like plant spares and raw materials? Or should we discuss the exorbitant operational costs and energy supply issues? As it stands, the current government policies are far from favorable for manufacturing entities.
InfoStride News: Are there specific policy measures that the Federal Government could implement to enhance the operations of companies in your industry?
Ayodeji Oseni: Absolutely, there are. Our industry is heavily reliant on the importation of plant spares, equipment acquisitions, and global logistics concerning exports and imports. Furthermore, we depend on cost-effective energy to power our plants and machinery for production.
We have consistently urged the federal government to consider adopting policies that can alleviate some of the significant challenges we face in our operations, most of which are man-made bottlenecks.
Packaged gases, which we primarily deal with, are typically stored in high-pressure cylinders. The integrity of these cylinders plays a vital role in the transaction process between manufacturers in our industry and the end users of our products.
Hence, it is the government’s prerogative to enforce stringent requirements on these cylinders. This includes ensuring that every cylinder used for storing packaged gases is made of the right material, tested, bears clear test or expiration dates, features a visible identification number, and displays ownership markings. This information should then be uploaded to a database accessible to the government.
In the event of any incidents such as crimes, explosions, unfair business practices, or the continued use of cylinders past their expiration dates, this database can be instrumental in tracing the origin of such cylinders and investigating and preventing such incidents.
Another long-overdue policy is for the government to thoroughly reassess the entry-level requirements within the industrial and medical gas manufacturing sectors. This should extend to distribution, handling, compression, transportation, haulage, and sales of such gases without the necessary government authorization, certifications, licenses, and other regulatory approvals.
Beyond the advantages of such a policy, it places an added emphasis on the safety of lives and properties, a responsibility that only the government can effectively oversee. In today’s Nigeria, it is startling that individuals without the requisite permissions can engage in the compression, transportation, sale, and resale of industrial or medical gases without accountability or government oversight.
InfoStride News: How can counterfeit products be curtailed in the market?
Ayodeji Oseni: Counterfeit products represent a critical area that necessitates urgent attention, and this is a facet of policy formulation that we are earnestly advocating for. Over the years, we’ve observed the rise of subpar businesses that exploit the lack of government regulations and enforcement in our sector. Some of our products fall under the classification of drugs according to the World Health Organization, and their quality and safety are of paramount importance.
Within the industrial and medical gas industries, counterfeit products manifest as underfilled cylinders without certification for quantity or quality, lacking cylinder test dates, corporate identification markings, and being offered at unrealistically low prices. Customers who are discerning about these criteria are steering in the right direction.
Additionally, strict adherence to plant setup standards, good manufacturing practices, and industry-specific safety standards by accredited industry players will complement the efforts of government and regulatory bodies in ensuring the availability of safe and high-quality industrial and medical gases in the market.
InfoStride News: Beyond the existing challenges in the operating environment, Nigeria is grappling with rising inflation, concerns regarding the removal of fuel subsidies, debates over the implementation of a unified exchange rate, and prohibitive interest rates. What strategies is your company employing to sustain profitability and create value for shareholders?
Ayodeji Oseni: As a company, we continually leverage our unwavering commitment to excellence to remain at the forefront of an industry that operates within an ever-evolving and challenging environment.
Our core strategies include an unrelenting focus on safety, adherence to best global practices, efficient internal processes, and the maximization of strategic business opportunities. We believe these tactics are crucial to mitigating the adverse effects of the dynamic marketplace as dictated by the Nigerian economy.
InfoStride News: How does the scarcity and high cost of foreign exchange impact companies in the industrial gases and allied products sector when sourcing raw materials?
Ayodeji Oseni: The scarcity of foreign exchange has brought about significant financial losses and challenges for our business. It has resulted in lost revenue due to our inability to import essential raw materials for production on time.
This, in turn, led to the loss of potential profits, which could have been shared with our shareholders and reinvested in our business. The scarcity of forex also resulted in missed business opportunities, damage to our goodwill, and most critically, plant downtimes due to our inability to access forex for the purchase of plant spares or make timely payments for them.
InfoStride News: Is there a plan to establish a subsidiary for backward integration?
Ayodeji Oseni: Indeed, this is a path we are seriously considering. Our board and management are continuously exploring opportunities with the goal of achieving backward integration. This strategic move aligns with the current business landscape, and we are committed to taking the necessary steps to make it a reality. It’s important to note that we’ve successfully repaid the N1.2 billion raised through a debt instrument, which was the first significant step toward this objective.
InfoStride News: With the increasing importance of Environmental, Social, and Corporate Governance (ESG), how does your company align with the expectations of shareholders and stakeholders in your industry?
Ayodeji Oseni: ESG holds significant importance for IMG. The very nature of our business inherently positions us as champions of the ESG initiative, and we wholeheartedly embrace ESG as a fundamental aspect of our operations and corporate culture.
We actively participate in numerous initiatives designed to meet our ESG objectives, and our management collaborates closely with our board to enhance our performance in this regard.
InfoStride News: Could you provide insights into why your company recently raised N1.2 billion through a debt instrument and how this will translate into shareholder value?
Ayodeji Oseni: Absolutely, this capital raise was a resounding success, and it will undoubtedly benefit our shareholders. It enables us to enhance the value of their investments. As part of our strategic realignment and future expansion, we are taking substantial steps to grow our asset base and expand our business and product offerings over the next three years.
The debt instrument served as our initial major move in this strategic direction. It’s worth noting that we have already fully repaid the N1.2 billion to the investing public.
InfoStride News: How will IMG continue to uphold its prominent brand status in the challenging operating environment?
Ayodeji Oseni: IMG’s
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