The Chief Executive Officer of Cutix Plc, Ijeoma Odunoye, speaks on the struggles of local manufacturing firms amid high inflation and interest rates, insecurity, and a torrent of substandard imports. She explains how her company is navigating the economic environment and highlights the need for government intervention to sustain businesses in this interview with OLUWAKEMI ABIMBOLA

How is the business environment in the current economic landscape?

If I’m to tell you about business in Nigeria, candidly speaking, it’s been a very turbulent one. When one of the discussants at the NASME event was talking, she said she returned a loan of N1m because of a 12 per cent interest rate, but companies face interest rates as high as 37 per cent now. The average is 35 per cent. The lowest you can get is 33 per cent. You can imagine what it is like to take a loan and pay 33 per cent of that as interest. It’s not palatable for businesses out there.

Another challenge we have is the dearth of foreign exchange. For us, some of our raw materials are imported, and there is the challenge of getting this money from the Central Bank of Nigeria. I wonder why BDC would get forex when CBN can’t give it. It’s a challenge to us, which, if addressed, will help businesses to thrive.

How is your firm dealing with the age-old challenge of substandard products flooding the market?

We need the government to come into it. You go to the market and see substandard products, and you ask, ‘Where are the regulators?’ I tell anyone who cares to listen that the saving grace we have is the erratic power supply. If we have a consistent supply of power in Nigeria, say for two weeks back-to-back, some buildings will go up in flames because of the substandard products coming in through our borders. The uniformed public buy them, not knowing they are risking innocent lives. It’s a big challenge in the industry, and we need government attention to that space to make sure that if you buy, you buy once, and you sleep with two eyes closed. That is what I advocate as the CEO of Cutix Plc
If the local manufacturers go to a common market where they have sanity in their economy, how can they compete? How many local manufacturers can compete in the African market space? The cost of your product before it gets to that market is higher than the price that other manufacturers of the same product are willing to sell. People are coming into the market with the same product at a cheaper price, and with the kind of mentality that people have about foreign products, it will spell doom for local manufacturers.

The government should understand that addressing the issue is not for a particular sector but for the general good of society, because if the companies close shop, the workers will go, and if they cannot get jobs elsewhere, they will commit crimes. It will have a spiral effect on the economy.

What other challenges do you think the local manufacturers are facing?

Another huge challenge that they have is the issue of insecurity in the country. The sit-at-home order in the South-East, which we have had to operate for only four days in a week, but even at that, there are still pockets of insecurity here and there, killings of citizens by unidentified assailants, etcetera.

The government must be alive to its responsibility because even beyond the region, you also have insecurity everywhere across the country. It affects our business because our market is beyond the South-East region.

We also have a logistics problem. The bad road in the South-East is another challenge. If I want to move my products from Anambra State to Enugu State, for example, a journey of two hours now takes five hours at extra cost.

You were recently named ‘The Most Successful Female Entrepreneur/Excellent Performer as a Female Chief Executive’ by the Nigerian Association of Small and Medium Enterprises. How fitting is it for you, and to whom do you owe the honour?

I owe it to the board of directors of Cutix, who have worked hand in hand with the management to reach the milestone we are celebrating. I also appreciate the management team and every staff member of Cutix. I appreciate every contribution because I couldn’t have done it alone, and I believe God will take us to greater heights. I started with the company in 1992 when I finished my education. I grew through the ranks, held different positions, delivered on all of them and rose to the position of Chief Executive Officer. In these years, I have worked with a lot of people, learning one or two things which has helped us thus far. We have about 300 permanent staff, and we have casual staff, like those who come for IT and internships, 100. We have two branches in Abuja, two branches in Lagos, Uyo, Port Harcourt, and Abia State, and the head office is in Nnewi, Anambra State. We also have distributors spread across the states of the federation.

What stands you and your company out for this honour?

They checked our record and found out that consistently, the turnover of the company has increased over the year. We have consistently paid our dividend at an increasing rate, and we have consistently, not minding what is happening in the economy, paid all our bills, especially the workforce. Above all, where we hold out staff welfare is top-notch. Like the NSITF, Cutix has that, and in addition to that, we have another insurance coverage for members of staff. So when you work for Cutix, we make sure you’re happy. So, you see people spending 30 years with us. Like I have done for 32 years, and the question is, why didn’t I go? Those were the tenets I met and moved to a higher level. I call it a balanced scorecard; you’re looking at the interest of the owners of the business, and you’re looking at the interest of the staff and the quality the buyers get. Another thing that has kept us going is our consistency in the payment of dividends. We do a bonus issue every three years. I became CEO seven years ago, and I’ve done bonus issues two times. So, if you have 500 units of Cutix, after three years, we will give you another 500, and you won’t bring one dime.

What does the future hold for Cutix against the backdrop of some of the highlighted challenges?

The future, I will always say, is very promising. Cutix plc is looking forward to becoming one of the top three providers of electrical energy products and services in the world.

It is possible, going by the quality of our product offering and the dedicated management and staff of the company, of course, our shareholders, who are quite supportive, and our loyal customers.

Given your over three decades in the manufacturing industry, what advice do you have for other small and medium-scale enterprises that are into manufacturing in particular?

My advice has always been, for everything you want to do, let quality speak for you. For every business you want to go into, try to find out the rudiments and standards guiding it and work according to them. That has kept Cutix going. People will come to the market and say Cutix is expensive but buy Cutix and sleep with your two eyes closed. Even the electricians will tell you if you don’t want to spend on repairs and maintenance, use Cutix. It is expensive because we don’t cut corners. I’m telling people, as a member of NASME, who I call my family, that quality will speak for you.

To what extent has the volatility of the naira impacted your business operations?

It had its toll on the business because what we experienced was that we could not plan effectively. After all, it was difficult to project accurately what the naira would be exchanged for at a particular time. At some point, it rose to unprecedented heights, and it impacted businesses, especially for dollar-denominated transactions, where maybe at the time the transaction was initiated, you had a view of how much it would cost in naira, but by the time you got the product, and you completed your payment, you’d spent more than double. It wasn’t funny, but we navigated that, but it affected business negatively.

The latest Purchasing Managers’ Index from Stanbic and S&P showed that Nigeria’s private sector business activity maintained its positive momentum despite the inflationary trend. What does that say about the business climate in the country?

It shows that the business climate in the country is responsive to development in the economy. By this, I mean you don’t just pack up because of inflation, but you step up your game and make sure you remain in business. As costs go high, people adjust accordingly to make sure they not only cover their costs but also remain in business by making a profit. Given our culture here in Nigeria, buyers also adjust. One can wonder if you see buyers ready to pay double or three times for regular items. I must add that basically, people had to drop some expenses, especially those that are not essential. So, for businesses in those industries, their volume of business would be affected. They may have the naira by way of revenue, but in terms of volume, there will be a reduction at the end of the day because the same naira could not buy the same quantity of products or materials it used to before inflation.

Do you think this trend will continue this year?

Whether the trend will continue is neither here nor there. Buyers’ response to what’s happening in the market depends on several things. And one of them is how essential the item is. People naturally want to get what they must get. They can reduce the quantity at a point in time, but for things they can do without, people won’t bother because they don’t have much cash to spare.

The trend may continue if people have no better alternative. Just drop the ones you mustn’t get and continue with the ones you need. Like the people in the food industry, you just have to eat. People in the health sector, when one is sick, you have no option, even if it means borrowing.

Briefly recount your experience leading Cutix over the years.

By the year, you see costs increase. I mean a continued increase in operational costs, and this leads to an increase in the prices of these materials. The end is that with the same amount today, you are not able to buy the same quantity of products you bought five years ago. It’s worsening by the year, and I know it’s not peculiar to Cutix because it’s the result of the inflation that is facing the nation. Another thing that became very clear is that I see people are hungry for quality products. We have a set of people who want to buy quality products no matter the price. People want to buy once and buy right. They are happy buying them, not minding the price. I also see another set of people who are looking at their scarce resources and buying the quality they can afford. So, for such people, by the time such products go bad, they would have been able to raise more money to replace them. So buyers react differently to quality and pricing. But for me, I would say it’s better to buy once by buying right, and it’s not just about the cable industry; it’s about everything we spend money on. For instance, if you look at a collapsing building, you see it’s a colossal loss, and the reason is a compromise in terms of quantity and quality of materials. Let quality be the benchmark for every industry. When quality is compromised, it might even lead to loss of life.


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