Government policies are helping to cripple the manufacturing sector, the food, beverages and wines sectoral group inclusive. In this sector is one of the foremost wine producing firms – Jacobs Wines
Limited. Royson Jacobs, the managing director and chief executive officer (MD/CEO), Jacobs Wines Limited, in an interview with Saby Onyenwe advises federal government as well as Imo State government to make policies which will usher in healthy manufacturing environments in the country especially as it concerns the food, beverages and wines sectoral group.
Good morning Mr Royston, could you please march or walk us through
Jacobs Wines limited?
Thank you very much; first of all, I am Mr Royston Jacobs the managing director and chief executive officer (MD/CEO) Jacobs Wines Limited.
The company is located here in Mgbidi, Oru West local government area, Imo state, we are into wines and table water production, and we produce wines, spirits, juice and portable water.
Here in the South East, several manufacturers of your type complain that the Nigerian economy from the recent past years till now has been very challenging and tough on their businesses, have you the same story to tell us or your own is quite different story?
Well, the policies of the current federal government have actually affected our business so much, more especially some of us who are into food, beverages, production of wines, etc. The policies have also affected us much especially in the sourcing of raw materials in the
sense that as at 2015 sugar, we used to buy a bag of it at N2, 500 but currently even as we speak now, a bag of sugar is about N20, 000 and at that highly increased price in raw materials, there is no way we can match foreign products or imported wines. These foreign wines which come into Nigeria are cheaper than our products, so we cannot sell and there is no wise person who can see a foreign product that is cheaper and goes a head to buy our own or local products of a good quality which is higher in price, and of course, you are aware of our Nigerian mentality. So the current economic policies have affected our business.
That is a very big challenge, but could you let us know the size of your wine market now and from where do most of your demands came from?
Before the economic recession in the country, Nigeria as a whole was our market size, we were selling in the East, West, North and South and in all the six geopolitical zones of the country but now, in fact the market has shrunk so much that we are managing to sell around the East. The reason is that a lot of our customers have gone out of
business; I tell you a lot of them have closed shops and some veered into other businesses.
The new business that is spring up and thriving to penetrate into that is cumbersome and you cannot join unless you have to belong, like a kind of political class or a cartel. So there is a lot of challenges for those who are local manufacturers of quality wines in the country.
Apart from the challenges of high cost of raw materials which have affected production, sales and that the market is thinning, are there some enabling environments created for wine manufacturers to thrive especially in the South East?
You can see by your self, we are in this State which is Imo, it is not conducive for any manufacturer and consumer of manufactured or industrial products and it is also not healthy for anybody in this State. If the workers are not paid and the pensioners do not get their pensions as at when do then who will buy our products? If the middle
class is thriving and the money is there, that will be when manufacturers of our type will sell. They are the people who usually patronize our products but it has been difficult for them, you will see the environment is bad, the market is no more there.
It is only the political elite class that has the money, the rest of the people are just managing to survive, it is when the middle class has the money that the economy booms as at now nothing better is happening.
The manufacturers in the State here, especially those at the Owerri- Onitsha Road Industrial Layout experience challenges of road network as well as power, do you have such challenges in the area of your location?
It is worrisome to say. Look at it, since the year 2014 we have been using generators for production, there has never been power, that electricity since 2014. The power you see here we are using, is the one we generate, so the whole money we make here goes into purchasing of diesel and it by the grace of God that this company has not closed its door for its costumers since 2014 till today.
Can we know a rough estimate of how much you spend on buying diesel monthly and from which area do you manage to keep the company afloat?
The monthly expenditure on buying of diesel can go as high as N300,000 to N400,000 depending on the volume of production and the number of hours we spend daily on production. But the main area that is sustaining this company is the table water section. We also thank God that the table water section is sustaining this company otherwise we would have had some issues or more challenges.
We have had cause to visit some shops in the State and we could not see most of the brands of Jacobs wines, could this be traced to the challenges you have enumerated?
Yes exactly, some of the networks we used to have had issues with the prevailing economic polices in the country and a lot of them just as I have earlier said are out of business and this has affected us too.
Look in the market today in Nigeria, there are various brands of imported wines of which the masses could not easily afford unlike before. The average poor cannot use N2000 to buy a bottle of good foreign wine just for relaxation sake, instead they can afford beer
and locally made gin. Before 2015 things were better for the middle class but it is not so now, we can only pray for things to get better in this country, an improvement on economy, an economy where the masses can afford what even they need.
In Nigeria now we have two major classes, the very rich and the very poor, now they very rich can afford the expensive and imported wines but the rest of go on water, ‘Ogogoro’ (illicit gin) and beer.
This company has diversified into the production of table water which has been sustaining it, could you please, tell us more about it including the production capacity?
The table water we produce is Amanda Water which is one of the purest and safest drinking table water in the market today. it is healthy for the body, we produce the bottled water and the sachet water and we always work to meet up with the demand of our customers.
Do you have advice to the incoming government in Imo State on better condition for manufacturing?
I will suggest to the government to give us steady power supply, the Enugu Electricity Distribution Company (EEDC) to enable the industrial sector to boom in the South East, it will make manufacturing easy, stem the cost of production and services and then the supply costs and of course the final consumers will readily afford the products.
The government will revamp dilapidated roads infrastructure to easy distribution of manufactured goods. The government would as much as reduce multiple taxations which have been torn on manufacturers in Imo State. There are too many agencies demanding taxes , when you pay this another one will come and they will continue to come like that, multiple taxations frustrate the business, government should do something to ease the manufacturing environments and very body should keep praying for Nigeria.