SMEs and Ventures

How We Changed Nigeria’s Soft Drinks Market with Big Cola

Country Manager of AJE Group, manufacturers and distributors of Big Cola and other brands, Mr. Theo Williams, tells Crusoe Osagie about the model company deployed to snatch the number three position in Nigeria’s competitive soft drinks market, in about one year

Tell us about how u came to Nigeria and your working experience?
Ihave lived in Nigeria for 16 years. But, not been all those years with the AJE Group. I have work with different companies in the Fast Moving Consumer Good (FMCG) world.
AJE Group was formed some 26 years ago in the northern part of Peru, South America. It is a family-owned business. Due to the war situation in that country, the bigger ‘soft’ drink suppliers could not travel to those areas, so the Ananos family decided that people needed to have some soft drinks, so they started a very small factory there, family-run and the business model caught on very quickly, so when the war actually stopped, they spread throughout South America at an unbelievable speed and 26 years later, they now have owned operations in 28 countries and franchise operations in three countries. The one thing that they always do when selecting where to enter is there must be a large population and there must be a strong middle class. They are not interested in the age or income bracket because their philosophy is that they will always give you more for less and secondly, is that we democratise soft drinks meaning that to take a soft drink, it is not only when you have a party or a christening or a wedding. It is a daily drink; you drink it whenever you are tasty. We came to Nigeria in 2013. We started selecting land for factories and also started the first factory in Agbara and during the year 2014, we built the plant and later stages of 2015 in September, we launched the company and in one year, I am of the opinion we changed the face of the ‘soft’ drinks industry in Nigeria.

How do you produce this drink?
It is a quality drink of international flavours and the only way we can summarise it is that our business model is one that allows us to produce a quality product at a price less expensive than what the competitions offer.

What is the composition of the drink?
Just like every other company’s drinks, there is sugar, citrus, flavours and preservatives. It is a normal drink. Our cola is cola and our orange is orange, lime is lime. Nobody can get rid of the basic components of the product.

What is responsible for the success of the business?
We entered the market with a 65cl bottle and we were also selling at a lesser price than anybody else is selling a 50cl bottle. The taste was good, the price was good and also the volume and the Nigerian markets were ready for a viable alternative. They tasted it and accepted it. The team that we employed flew with the drink and we expect that to have employees, we need to have the partners out in the market and we selected people that were new, the type we call the beginners who are not scared to put some money down and see if this thing works. We did not select people who are followers, but selected leaders, champions of something new and in a quick space of time, our business partners and the staff knew that we had a winning combination and many people have said that it is unbelievable, that we should not have done what we did. But that shows you the power of people and distribution.

What is your share of the market?
I would answer it this way, rather than telling you what market share we have got, I would say that officially we are now number three in the market.

Why did you come to Nigeria at a time the economy was faced with uncertainties?
We are an owned company and we started this business in the middle of a war in South America, therefore, we cannot be afraid of coming into uncertainty. We entered because we saw a viable result.

How are you coping with the current economic situation in the country?
We cannot say Nigeria, since its independence has had a calm existence. It has had its ups and downs and it has proven that it is a nation that can recover and grow. We know right now we are facing a challenge. The dollar-naira exchange rate is hurting everybody, but during this period, it is the time when the men are separated from the boys. Produce a model that will keep you afloat without affecting quality, efficiency and at the end of that we will be in the right position to ride the next wave with the rest of Nigerians.

How many states are you in?
We are pan-Nigeria.

Where are you from as an individual and how have you been coping in Nigeria since you arrived?
I came into Nigeria when the telecommunication companies came into the country. I was one of the founding members of the telecommunications industry and then I was to join the ‘soft’ drink industry. A superb company called classic beverages recruited me as its General Manger, Sales and Marketing and while there, in a short space of time, the company grew about seven folds and I enjoyed what I saw here and decided that this is where I am going to make it happen and I then joined a public liability company (PLC) and I was made the Managing Director of UAC Dairies. I was recruited from there to start up another bottling company which I suggested it to be established in Kano and today it is mainly a water company doing quite well in the North and the reason it has not expanded further South is because of the cost of transportation and for water, it is not profitable. Whilst I was there, the AJE Group told me they wanted to start something here and asked if I mind joining them and after an eight-month interviewing process, I was offered the position and the rest is history.

Can you advise the Nigerian government on how to boost manufacturing and the economy?
For me to advise the leaders of Nigeria will be most naive. I have only been here for 16 years and not 60. However, my advice would be creating environment for investment, create an environment where people who invest in the country, get the right tax breaks. If they are putting some kind of equity in, they should be assured that they will get long-term loans at low rates, allow them to move with speed and overcome some of the bureaucracy that hinders people from coming to Nigeria. It is not easy if you do not know the ropes, things get difficult and so many different issues come into play. If you are not an African and you do not understand Nigeria, you will run. One of the funny issues that happened to me when we started this operation, was that suddenly, we were refused permission to build a security wall and we realised that there was a problem concerning the original land owners and we had legitimately purchased the land. I called the board to say that we cannot continue with the business because we are fighting against “juju” over the land and I think a lot of Nigerians have forgotten that this is the gateway to Africa. This land has got what you need. It has got agriculture, minerals, crude oil, gas and it has literally, more areas where you can grow more types of vegetables, fruits than in South Africa. I am a Zimbabwean and Zimbabwe was known as the maize basket of Africa, but I will say that the man who quoted that phrase did not see what lies here. The opportunity here is immense. Start making things like commercial farming instead of subsistent farming. Make things work for government to own taxes, introduce a trickle down economy and not a trickle up economy that to me is progress and the taxes that you are generating should be used in building infrastructure, you should fix the gas stations and instead of flaring, power with gas and we know in the past the economy was depended on oil, move that dependence to gas because gas prices have been very constant and we know that oil would eventually recover but cannot go back to the old prices and I think as long as big oil producers are fighting each other, not one of them is willing to reduce output, everybody else is going to suffer, but when that difference stops and they start thinking economically to survive, we will find oil prices will start coming up again.

What other things do you like in Nigeria?
I think the Nigerian people generally are a great bunch of people. They are friendly and supportive. In all the time I have been here, I have never ever heard a racist comment. I have been in night clubs, bars, hotels and all around the country and I have never experienced any thing to be scared of. I have tasted a number of dishes of Nigerian cuisine and some of them I quite enjoy while some of them I do not enjoy, but like everybody, if you take a Nigerian outside a Nigerian environment and you give him some food from that country he does not enjoy all of them either, he spends the next two days finding a Nigerian restaurant so we are all the same.

Any projections for your business in the next five years?
My company is already reinvesting so as to triple our current capacity. Our dream is to establish another two factories one in the North and the other in the East and with that, we can reduce our cost of distribution and also give us the flexibility one requires as a manufacturing company

What has your company brought with it?
We have invested about $60 million so far and in a short time, we will invest between 60 and 80 million euros

How does your business model boost employment generation?
Our business model basically creates direct and indirect jobs. We currently employ over 200 people of which only eight are expatriates. We have indirect employment to a range of about 400 to 600 and with our expansion in short term, that number should double. We also have a social responsible programmes and because we are a ‘soft’ drink company, we will therefore, like to start building boreholes in areas where we operate to help the people. Similarly, we are attempting to clean the streets, meaning adopt a road in Victoria Island, Ikeja or Ikoyi or anywhere to put up dustbins. We will also come up with a plan to remove the millions of plastic bottles on the streets.

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