In 2016, the ban on the provision of foreign exchange for milk importation by the Central Bank of Nigeria (CBN) led to the closure of many dairy firms, especially those producing Yoghurt. Many players could not get enough milk which is the major raw material for their products. In spite of this challenge, one man who remained resolute in the business is Adeleye Julius, Chief Executive Officer, Queen’s Kitchen Nigeria, producer of Elite-Kings Yoghurt in Lagos. In this interview in his office, he spoke with Rotimi Asher on his passion for the industry and the need for the government to create milk collection centres to revive the industry.
Rotimi Asher: You seem passionate about this industry, what really inspired you to come into this industry via yoghurt production?
Adeleye Julius: I must say that I am so passionate about the industry because of the solution Yoghurt brings to humans. Yoghurt is a complete food. It has the entire nutrient that the body needs. Remember when we were born, we were asked to be fed by our mother with breast milk for six months, without taking any other food. But it will come a time when you can no longer take that milk again because your system may not break it down effectively. There comes the Yoghurt.
The introduction of Yoghurt is to elongate life because it boosts the immunity of the consumers. So, my biggest joy in the industry is to help through the production of Yoghurt boost the immunity of consumers. I have seen it work over the years. By taking Yoghurt, I have seen my immunity and that of others improve over the years.
I have also seen the way the market accepts it. It is one of the products you sell and you don’t struggle. It is not just food. It’s complete food.
Rotimi Asher: Where does Yoghurt come in since as adult we are not supposed to take too much milk?
Adeleye Julius: Yes, what we do is “digest” the milk outside. That is when it becomes Yoghurt. It is milk digested outside the body. In the process, you are now taking the final nutrient of the product. Everybody needs the nutrient. Milk contained all that the body needs to grow. It gives strength and heals the cells. As you grow up, you won’t need to take the milk directly because your digestive system may not have the capacity to break it down. We now break it down outside the body. That is what we call fermentation. We ferment the milk, add what we call culture to it and turn it into Yoghurt. Then it becomes easy for everyone to digest.
Rotimi Asher: So, Yoghurt is a combination of milk and other ingredients?
Adeleye Julius: Yes. It is called culture. It is the addition of cultures to milk at a particular temperature. It turns out to be Yoghurt after some hours. It heals internal wounds. It has powerful healing effects on the body. It is medicinal. It is a complete energizer and it boosts the immunity of the consumers.
That is why I am so passionate about this industry. When you look at the solution Yoghurt brings to the consumers, you are just motivated daily to continue production in spite of the challenges associated with the sector now.
Rotimi Asher: How have you faired in the business over the years?
Adeleye Julius: Fantastic! Over the years, it has been quite good until 2016 when that disruption by the CBN hit the diary industry. Things became really difficult especially for the small and medium scale Yoghurt manufacturers.
Yoghurt is lucrative because it gives good profit. You don’t struggle to sell. When you get the secret of producing quality Yoghurt and you dish it out, people are ready to buy. You cannot even satisfy the market.
Taking my small company as a case study, this place was built from the proceed of the business. We were in a rented apartment before this place was built. The business is really lucrative I must say.
Rotimi Asher: What essentially happened to your sector in 2016?
Adeleye Julius: The first thing that happened was lack of foreign exchange in dollars. It went from N150 to N500. To import milk, our raw material became very difficult. The input to our product is basically milk because local content cannot give us what we actually need. So, we import. From 2016, it became difficult to import directly. From that time to 2019, it has been very challenging to get raw material. Even when you get it, the price is so high.
Rotimi Asher: Don’t you have an association of Diary producers? You could come together to work on growing local contents for your product. Have you tried that option?
Adeleye Julius: Let me get through with the line I was toeing before your last question. In 2019, the Central bank finally banned the general importation of milk and gave the right of import to only six companies. This affected the small and medium companies producing milk.
Though, we do have an association, but our voice has not been heard by the government. Talking about the local content, we can really do something with what we have in the country. As of today, it is difficult to step up the area of local content. It requires a lot of funds. Even if you gather all the small scale producers and put their resources together, we cannot even have one milk collection centre. The fund needed for the milk collection centre is enormous.
When the government gave the six companies the right to import, what they looked at then were those ones that had the capacity for backward integration in the industry. Those companies have the capacity to build their milk collection centre. This way, small scale firms can get milk from them for use. Till now, that has not solved the problem. They have not done anything to help the industry.
Rotimi Asher: Is it not possible for small scale companies to put their resources together and build a milk collection centre?
Adeleye Julius: Speaking on behalf of the association may not be my role now, however, we have made an attempt before which do not work basically because of finances. In this country, what we do is: create a class and when we do that we have a problem. If you are saying somebody who wants to import should have N200 million and they can only gather about N5 million, there is nothing they can do.
It also depends on the synergy that the association has. So many people came into the industry because it is lucrative. They don’t have any passion for the business. They don’t have the vision of what they intend to do in the next five years.
The same applies to the association. Its success depends on the kind of leadership they have if he can see the vision and is able to drive few members. He must ensure that the voice of the association is heard. That is why I said we can’t speak for the association.
As for us here, we have made series of attempts on how we can get our own input locally. Though it has not worked the way we wanted, we are making little progress.
Rotimi Asher: Has this business really made your life better?
Adeleye Julius: Yes. If you go into a particular business with a vision and passion for solving problem, it is easy for you to survive and even succeed. And my own is to solve problem. The one I see is how to increase the immunity of the consumer. Since I have seen a product that can do that and the product also serve as food. That is my motivation. Aside from challenges, it has given us some comfort.
My greatest joy is the ability to provide job for many. That is our goal; to engage people productively and take them out of poverty. This is what has given us joy. If there is anything painful to me, it is the people we have sent out of job because of this disruption. I am wondering how they are going to meet their daily obligation. We still believe that solution will come someday and these people will regain their jobs.
Rotimi Asher: Apart from the challenge of getting raw material for your business, what other problems are you grappling with?
Adeleye Julius: Infrastructure which is virtually common with many manufacturers in Nigeria: electricity, road infrastructure and others. The roads are so bad. If you have a truck today, in the next three month it would have turned to scrap. We don’t have smooth roads to convey our products to another state.
Rotimi Asher: What area do you want the government to come in to solve some of these problems?
Adeleye Julius: I was actually excited when the government came in with the policy of backward integration. It is one of the things that will sustain the business for the generation to come. The only challenge I have with that policy is that we have not localized it or taken it to the grassroots. The system only looks at the large organization and neglects the small and medium companies. Any country that wants to grow must pay attention to small and medium enterprises because they are the engine of economic growth.
The small scale enterprises of dairy companies have closed down because of this policy. Why? It is because backward integration requires capital. My plea to the government is for them to build or create milk collection centres for the diary industry all around where we have these cows instead of this nomadic way of moving cows about. Milk collection centres should be built everywhere even if it is in a modular way. This will create jobs. That is the way it is in other countries.
If the government builds milk collection centres, doing so, we wouldn’t need to import milk. So, all the small scale dairy enterprises that have closed down can come back to life again. This will lead to them calling back the staff they laid off and even market women selling Yoghurt will resume their sales. Then we will have this chain of employment intact in the industry. This is the major thing I think the government should do to revive the industry. The government needs to do something urgent about constant electricity.
Rotimi Asher: That is amazing! So, where do you intend to be in the next five years?
Adeleye Julius: For the next five years, I intend to make Yoghurt part of the Nigerian daily food. It is a big campaign I have in mind. That vision is keeping us in the business. It is a motivating factor. We want to keep producing quality Yoghurt that boosts immunity.
Rotimi Asher: What advice do you have for young people who want to invest in dairy industry?
Adeleye Julius: I will encourage young people to venture into the business because it is a business with a bright future. But they must submit themselves to tutelage. They must learn the business probably a company that can train them in the business. This is because if do not know the business very well and you go into it, you can make the money and also lose it.
Categories: Critical Conversations