Christian Agadibe
Maureen Omeibe is a woman of many parts with a pleasant personality and heart of gold. She is the Lagos State Chapter Coordinator, African Women in Leadership Organisation, and chief executive of Degab Industries Limited. A multi-skilled person, Mrs. Omeibe is passionately committed to women development for leadership roles in enterprise management. An indigene of Enugu, she is the founder of the Network For Women and Public Policy, which focuses on the improvement of women’s economic through research, training, technological innovation, policy education and advocacy. In this interview, she talks about her work in the assembly of motorcycles and other related issues.
When and how did you start your business?
The company, Degab Industries Limited, was actually a child of necessity. It sprang up years ago from an established marketing, haulage and trading company called Degab Commercial Stores. It was established in the 90s by Sir Gabriel Omeibe, the chairman of Degab Group and who is my husband and long standing business mentor. Degab Commercial Stores served as marketing and sales agency to a number of multinational companies. It was engaged in the distribution of motorcycles and tricycles. It was able to achieve large market share and had an enviable track record of volume sales, end users loyalty and robust distribution network. The Company was one of the best performing representatives of the World’s leading manufacturers of motorcycles at that time. Midway the company faced challenges in satisfying demands in some parts of the country owing to absolute dependency on the dictates of manufacturers based overseas. This persisted for years and became a de-stabilizing factor to the smooth operations of the business.
What was the initial challenge of the organization?
There were other associated problems at the time that called for a more futuristic and permanent solution. It became apparent that Degab Commercial Stores needed its own technical structure and an assembly plant to provide the stability needed in its sales network, improve product availability and brand consolidation. In response to this clear need, Degab Industries was established to provide succour to the near distressed market and overcome the difficulties which had reached the peak. After some months of ground works, consultations and raising necessary investible funds, we launched Degab Industries in 2010.
How has the journey been so far?
To be candid when I fully resigned from my previous employment and joined Degab Industries, I started out from the Operations Department. I had no experience at all to dabble into the technical aspect of the Business. At some points I had doubts and though we had an existing name, market presence and had succeeded in setting up a full-fledged assembly plant with a few qualified staff, a supervisor and a plant manager, my poor technical background and inadequate knowledge in entrepreneurship, it was clear that I needed to acquire new skill sets to be able to function effectively. So, I embarked on trainings both at local and international levels to get the grounded knowledge and skills on how to manage a sub-automotive factory profitably. In addition to these trainings, I consulted widely within the industry and sought for mentorship by those ahead of us in the industry. I must confess that these efforts were rewarding but not easy at all. In between there were number of successes and failures but I am glad today that the business is thriving and it has diversified into other ventures.
What challenges have you had in doing business?
Building a business in Nigeria is laced with myriad of problems that pose serious threat to the growth of businesses. However, when you give a logical consideration to your motive or the “WHY “of the Business you will realise that there is no better option than to face the challenges head on. One of the major challenges for those with growing businesses especially in the manufacturing sector is high cost of funding as well as severe difficulty in accessing government-sponsored funds for industrial development. In Degab, for instance it is more empowering to operate with working capital that is secured on a long term funding plan and at a reduced interest rate.
What are the solutions to these challenges?
Here in Nigeria all types of businesses are squeezed into one category and compelled to run to commercial banks to solve their funding problems. This is very wrong. Setting up and running industries require large capital and most people cannot have the impossible collaterals that the commercial banks demand for loans. One could quickly suggest going into partnerships. Going into partnerships or joint ventures just for the purpose of funding alone is usually not the best decision for industry owners. If there is no shared vision, values or interests, coming together to set up a business entity in that magnitude does not usually lead to success. I am speaking from experience.
Timing is another factor. In Degab, it takes us a minimum of 45 to 50 days for our consignments of CKDs (completely knocked down product components) to arrive Nigeria and get cleared to be taken to the factory. If you are on a term loan of 90 Days half of that period is gone and you are expected to pay the high rate interest on daily basis. This impacts the margin and the profitability of the business on the long run. Neither overdraft nor term loan is suitable for financing a growing manufacturing company. The Bank of Industry is well known to be very functional now, but they are overtly focused on agriculture or agro-based concerns.
Have you made mistakes along the line and what lessons can others learn from your experience?
Certainly, I made damaging mistakes in my first few years in the company. I had difficulties aligning with our business model at the foundational stage, because it required a lot of travelling and dealing with end users of the products. I felt that having an existing sub-automobile marketing arm in Degab Commercial Stores, the industry did not have to break its neck in marketing and sales of its products especially outside Lagos.
Our market is segmented and I pitched my personal tent with corporate customers only. That was not compatible with our model. We have products for corporate customers, private as well as commercial customers. All of them constitute our target market. Every business must have a model, which directs all policies, decisions and strategies, especially at the functional areas of the business. I quickly aligned having suffered some harsh consequences.
In the Nigerian business environment success of the business is determined by the capacity of the owners to understand the true needs of the people the business is serving, give what suits that need either in products or services and navigate through the harsh environments to meet short and long term goals. It is not about you, but your customers and their needs. Sometimes techniques fail you and you will have to solely rely on contextual experience to forge ahead. Running a business is not all about one’s personal ideals; it is about what the business and its environment demands. Your personal values rub off on the business but the actual product or service you offer must be of great value to your market. If you don’t sell you are never in business. Also mistakes and failures are all part of the success of we learnt from them.
What does one need to know before starting a business?
If we rely on what we know or our sagacity to start a business especially on the bigger scale, failure will be certain. Tools that one must have to start a business depend on the type of business or the scale. For me the most important foundation is embedded in motive, idea and passion. I always emphasize to aspiring business owners that the best preparation for starting a business is having a hands-on practical internship in the area of your business if you have such privilege, otherwise know your motive, your business idea, have passion and then go to learn in the field. Motive explains why you want to be in business or own a business and what problem you want to solve with your business. The motive must beckon on solving existing or futuristic problems. This is where your vision and mission is conceptualised and clearly developed. Idea queries your knowledge base, your readiness and competence in running the business. Your idea must provide answers to what, how and where of your business.
We heard that in 2018 Degab Motorcycles won an award from the Nigerian Institute of Marketing?
Well that’s true. Degab was nominated and later selected for Most Outstanding Product Award. I was outside the country at the time briefly to attend a product launch and did not realise the date of the Award clashed. Yes, our premium products stands out and this has earned us solid goodwill and awards in the industry.
From the onset, were you thinking of going global?
I will say yes. That desire was well captured in our vision statement and I know that most serious business owners aspire to launch into the international market. However, in our own case, it is procedural. A number of bridges must be crossed before we can launch into the global market.
In terms of quality, we have a product that is already fit to compete in the international market but we are yet to possess the capacity to produce in quantities for global demands assuming we are to go global. Also, Nigeria as at today does not have the transportation apparatus and network that supports commerce and movement of goods and services even within the West African sub-region. This is where our exportation should begin from.