In this exclusive interview with Yusuff Moshood, managing director/CEO of Embassy Pharmaceuticals & Chemicals Limited, Pharm. (Sir) Nnamdi Obi, speaks on how the state of the Nigerian economy is affecting the pharmaceutical industry and what the government can do to ameliorate the effect on pharmaceutical manufacturers and importers. He also reveals the benefits of opening up the pharmaceutical industry to non-pharmacists investors and what the sector is missing by not encouraging collaboration with non-pharmacist investors. Excerpts:
The state of the economy at this time is making things tough for all businesses and the pharmaceutical sub-sector of the economy is not left out in this tough time. What palliative measures can government take to help this sector considering its importance in the provision of medicines to Nigeria?
For me, what is happening presently is going to be for a short while. Currently, the political atmosphere is still heavily charged, and this has its own effect on the economy. Yes, dollar rates have gone haywire as a result of the decline in income from oil export. This is because oil is the mainstay of our economy. However, most of us believe this should be a big lesson to us as a nation. We need to grow other sectors of the economy to cushion the effect of a situation like this. We need to open up other sectors like agriculture, manufacturing etc. However, it is my hope that in no distant time, this gloomy picture of the economy will disappear.
For the pharmaceutical industry, the much the government can do is to see how to improve access to foreign exchange to local manufacturers of pharmaceutical products and importers of medicines. Importers of pharmaceutical products and manufacturers do need access to foreign exchange to help ensure they are able to continue making drugs available to Nigerians.
It is really unfortunate that the window through which foreign exchange is accessed was shut, making everybody to access foreign exchange through interbank rates. This is tough for most companies including Embassy. We are forced to go compete for foreign exchange with the big players in the business sector. Imagine us trying to compete for foreign exchange in the same market with the big telecommunication companies. I am not going to mention names but these are companies that are making billions yet provide erratic service to millions of Nigerians. They make huge monies from drop calls and these companies source for foreign exchange with local manufacturers providing essential items. You can’t compete with these companies. Most of these companies are prepared to buy a dollar for 2000 naira. This is because they make enormous money. The government should look at opening the exchange rate window shut by the central Bank of Nigeria (CBN).
Are you saying the CBN is not doing enough?
The CBN for sure is not doing enough to help the pharmaceutical sector. Recently, the CBN classified all pharmaceuticals as finished products. Even raw materials used for pharmaceutical manufacturing were classified as finished products. This was just to ensure that the privilege of accessing favourable foreign exchange by pharmaceutical companies from the second window was shut. This should not be the case. Pharmaceuticals are essential for our daily survival. There is nobody that will not have to access one drug or the other. This starts from the time of conception of a baby in the womb and for the rest of our lives. Drugs are needed for our survival,
What the government did during the era of Babangida was that there were some categories of products classified as “essential” and companies providing them were given the privilege to access foreign exchange through a particular window to ensure they were made available to Nigerians. If that is done in this dispensation, I think it will be beneficial to Nigerians.
You have been a strong advocate of opening up of the pharmaceutical sector to non-pharmacists investors, what are the gains of doing this?
It is for the interest of all pharmacists to open up this industry for those that have the wherewithal to invest in it. And examples abound for this, even in this country of ours. The owners of the telecommunication companies in Nigeria are not telecom engineers. Pfizer Worldwide is not owned by a pharmacist. May & Baker in Nigeria is not owned by a pharmacist. The major pharmaceutical companies are not owned by pharmacists.
There are also some local pharmaceutical companies that are doing well but are owned by pharmacists:Emzor, owned by our dear Dr Stella Okoli, and a few others. But what is the percentage of local pharmaceutical manufacturing companies owned by pharmacists? This is not limited to Nigeria. Worldwide, the trend is that non-pharmacists invest in the pharmaceutical business. Why can’t we do the same?
Imagine a situation whereby the big moneybags in Nigeria decide to invest in the pharmaceutical industry. I mean the men that really have money to invest in business. Most of them are not pharmacists. I think the first 500 or 1000 rich Nigerians, if not more, are non-pharmacists. I may not have the statistics on hand to back this up but I know that people with big money for business investments are not pharmacists. If we can attract these people to this industry, imagine how much we can achieve with their funds to transform and grow this industry. So, we should not allow parochial interest to keep this industry small.
I remember when I was invited by NAIP to present a paper during one of their events. I made reference to this issue of opening up this industry and I advocated for a strong collaboration with non-pharmacists to grow this industry. I like making references to countries that are identical to us. For instance, the best Cardiac Centre in India is not owned by a doctor. It is owned by the Tata Group. They also own one of the biggest pharma manufacturing companies. 98 percent of big pharmaceutical companies in India are not owned by pharmacists, and that is probably one of the reasons the pharmaceutical sector in India is one of the most vibrant in the world right now. They are exporting to all the countries in the world.
If we open up the industry to investors, it is not only the pharmacists that will benefit, millions of Nigerians will benefit. More people will be employed and it is the Nigerian nation, present and future generations, that will benefit more.
Dr Mike Adenuga who owns Globacom has helped employed many Nigerians. Is he a telecoms engineer? We need to open up this industry to serious investors that can invest heavily because we don’t have the wherewithal. So we need partnership and collaboration, not discriminating against non-pharmacists in our industry.
What is the philosophy behind the building of the Embassy brand?
Embassy is still a very small company because we are still building the brand. However, I will tell you that our philosophy from day one has always been consistency and honesty. There is nobody or company that has related with us that has ever regretted relating or doing business with us. That is why those we started doing business with at inception years ago are still with us. What all of us should imbibe either in business or in our private dealings is that our words should be our bond. So many people are in a hurry to make money, but when you make money and lose integrity, you will get to nowhere.
My brother and I can hold our heads high that all the people that we have related with since we started the company are still with us. Our words are our bond. We always meet up with whatever obligations we have with our clients and associates. We have never cheated anybody and we don’t ever intend to do that.
One of the greatest assets bequeathed to us by our parents is integrity and we do not compromise on that. Our products are sold with very little profit margin. We don’t worry ourselves that some people are selling competing products with very high profit margin and making more money. At Embassy, we are satisfied with our business model and we are contented with the little profit margin on our products. I have always said that I am the richest man in terms of contentment. God, in his infinite mercy, has brought me to this level just by his grace; it is not because I am better than the average truck pusher or that I expend more energy than them to work. Whatever good position people find themselves, they should know that it is a privilege and not a right. When they realise that, they will know that it is good to be contented.
The Association of Pharmaceutical Importers of Nigeria (APIN) has for some time now been undertaking some laudable corporate social responsibility projects.What prompted this decision, and how much can we as a nation achieve if more organisations subscribe to CSR?
Let me first say that APIN is not just an association of pharmaceutical importers. There is a considerable number of our members who are into local manufacturing though they still import. Let me say that all of us in this business will not be where we are without the support and patronage of millions of Nigerians out there and we owe so much to the society for what the society has given us. So we need to give back to the society that has given us so much.
Like I did say when we went to donate drugs to the Nigerian Armed Forces, we couldn’t have been where we are without the Nigerian people. That means we owe it to the people to put something back into the society as companies and as an association.
Embassy, for instance, makes available over 3000 eye glasses and bring in doctors, pharmacists, optometrists etc, every year to treat a lot of people for various ailments under the foundation we establish in memory of our parents, the Chief Ezenwa Obi and Regina Obi Foundation. The programme is for three days. We treat people free of charge and give out free drugs. We do this because like I said, whatever good position you find yourself is just a privilege and not a right.
So, at the APIN level, we encourage the same thing. APIN has donated drugs to the Lagos State government, the Benue State government and the Chinese government because of the earthquake that occurred in the country last year. And,as you already know, we recently donated drugs to the Nigerian Armed Forces. We did not do this alone. Some friends of ours who are also local companies supported us by donating food items. APIN also donated food items in addition to the drugs. The chief of Army Staff told me that our action has encouraged other organisations in other African countries battling insurgency to start donating to their armed forces.
I can assure you that we shall, as an association, continue CSR. I also urge other organisations and individuals to take CSR seriously because it is the right thing to do.