Honourable Idowu Osuolale Obasa is the Chairman of Biomedical Limited, the first company in Nigeria to produce intravenous fluids. In this interview with newsmnen, he speaks on the coming 40th Anniversary of the company, the launch of 22 syrup variants produced by the company, challenges and prospects of the company.
What informed your decision to go into a pharmaceutical business sir, given the fact that you are a trained accountant?
By training, I am an Economist and an Accountant, however, by occupation I am an Entrepreneur. What that means is that I can go into any business. In fact, I am both an entrepreneur and an investor.
An entrepreneur is also an investor but an investor may not necessarily be an entrepreneur.
As an entrepreneur and an investor, you are actualizing investment directly by putting together all types of resources to achieve optimum result for the growth and development of the company.
When you invest by buying shares in a company without being involved in the daily operations of the company, you just get your dividends at the appointed time, you are an investor and not necessarily an entrepreneur.
So, I am not just an investor, I am an entrepreneur. It is not what you study that prepares you for entrepreneurial work, it’s your passion.
Because entrepreneurial involvement is a very risky endeavour, all entrepreneurs are risk takers. I am a risk taker. I do not fear to fail. I do not fear failure. So, I can be found in any business.
So, it’s not strange that one is involved in pharmaceutical production. Don’t forget that I have been involved in pharmaceutical work before I got involved with Biomedical.
I was involved with Bradford Pharmaceuticals, which is now defunct. When we were running Bradford, producing syrups and other drugs, we were producing by contracting out production to other companies and it was clearly not viable for us because almost all the profits were being eaten up by the production companies. That was our experience.
So we moved into Biomedical in order to become direct producer of our products.
Looking at Biomedical in the past 40 years of its existence, can you tell us what the company has been able to achieve, especially since you took over the operations of the company?
It is difficult for me to say in detail what the company has been able to achieve in the past 40 years.
This is because I only got involved with Biomedical in 2015. It was founded by Dr. Farouk Abdulazeez, a medical doctor and industrialist. It was founded as the very first Nigerian company to produce intravenous fluids and Dr. Abdulazeez had operated the company until we bought it over in 2015, hence I cannot say much about the company prior to the time we bought it over.
I can only talk about the company with more intimate knowledge right from the time I became chairman. But if your question were to be adjusted to accommodate that knowledge, I will say when we took over the company, it was facing some problems, which by the grace of God we have been able to overcome.
Its major problem when we took over could be attributed to the fact that the company had concentrated its marketing programme on government as customers. Much of what they were producing and supplying went to Ministries, Departments and Agencies (MDAs) of government especially at the Federal and State levels.
If you look at it from one angle, it’s okay, at least if you get a state government to buy your products. Government institutions tend to pay more and they tend to buy in bulk, since they will redistribute. So it looks good from that point of view. But the unpalatable part of it is that your money is tied down for a long period of time because governments don’t pay on time.
As I speak to you now, several government bodies still owe Biomedical from supplies made before we bought it over. So, the first thing we did was to redirect marketing strategies and change our mindset. We supply to government now, but we don’t rely entirely on them.
You are able to sell to a number of government institutions at a higher price, but the higher price will become meaningless if you don’t get your money on time or not at all. Change of government is another important factor. The new government may not be favourably disposed towards paying you and they will be playing games with you. In business, it doesn’t always work like that. So you must do your marketing strategy well and focus on what will favour your company. That was the major problem.
There are other operational problems but they are predicated on the first one because if you are not getting your money regularly, other problems will fall in.
As the founder was advancing in age, he decided to retire, it was just an opportunity for us to step in. So, the newness and freshness of our own intervention made us to first arrest the problems and redirect the company.
It’s like a new coach taking over a club. You will find that one or two players who are not in favour at that time would probably be his own star players. Some who are favourites of the previous manager might have to go to the reserve bench.
There was reorganization and there was a lot of enthusiasm on the part of everybody involved. We retained a good number of the staff we met on ground; we brought in other people. We brought in for example the Managing Director, who had worked with Dana Pharmaceutical, as Chief Operating Officer; Director Technical had experience from May and Baker, and SKG Pharma; Factory Manager is also an experienced professional. These were the key positions that we needed to fill from our side. We expanded the administration. It worked for us, I can’t deny that.
You spoke about government agencies still owing Biomedical, how have you been able to recover the debt?
Truth is that we haven’t been able to recover the debt and we are not looking forward to that. We have written them off because efforts to recover the debts have proved to be too much. At the time we took over, Dr. Abdulazeez tried a lot to get debtors pay but his efforts proved abortive. We have already moved on.
How are you coping with the socio-economic and political challenges in the country?
The political situation of the country does not have a direct impact on operations of the company, this is because any patient admitted for treatment in hospitals who need drips or other health services, gets them irrespective of his or her political affiliation.
So, political affiliations and political issues take back stage when it comes to hospital issue.
Perhaps you are referring to the economic situation of the country, which has had very huge negative impacts on the company’s fortunes. As you probably know, almost all raw materials we use are imported, so the first thing is that the foreign exchange situation has really impacted negatively on us because we are a company which depends heavily on imports.
Then of course the second thing is the growing poverty level of the people, many are getting poorer daily which has drastically reduced their purchasing power. One will expect that it should not affect health. But that is not so.
Let me tell you, not everybody who dies from an ailment actually dies because that ailment cannot be cured. A large majority of those who die of different ailments give up the ghost because they can’t afford what is required to cure them.
Poverty itself is a very serious ailment. If somebody has a serious ailment and the person does not have the financial resources to access the needed health care, that ailment will subdue the person and the person may die. Hence, for those who produce medicine, however good the medicines are, and however you try to make them affordable, there are still a lot of people who won’t be able to afford even the cheapest medicine. Government should be able to subsidize enough in order to bring medications nearer to the people. My own thinking is that, there is no way you can have proper healthcare delivery without heavy government subsidy for the masses.
That’s why NGOs spend a lot of money buying drugs in order to give to people. Even government also does the same thing. It’s because drugs are actually not so cheap to come by and drug manufacturing companies are not going to manufacture and distribute for free and they have to keep manufacturing. Manufacturers benefit during times of prosperity and they equally suffer during time of recession and depression. So that’s the economic part of it. I think for a country that is so heavily dependent on imports like Nigeria, manufacturers are usually in trouble.
What don’t we import in Nigeria? For example, the pouches that we use for infusions were initially being produced here within the factory as part of our production process. But we suddenly discovered that it was cheaper to bring them in from China than to produce them here. So, we had to pack up the machines and start bringing them from China.
You stated that Biomedical Pharmaceutical has delved into other areas of health service such as production of syrup, can you explain more on this?
In the area of syrup, we have a factory fully in place for its production and we have developed formulations for thirty syrup variants. We are already producing and we are in the market.
Twenty two out of the thirty syrup variants have been produced and we will officially present them to the public during our anniversary celebrations. We got money from the Bank of Industry for the production of the syrups.
It will be interesting to mention how we got money from the Bank of Industry because sometimes when good things happen we should put them on record. Officials of the Bank walked into our factory and said that they were looking to assist the industrial sector in Ilorin.
Do you need money? was the question BOI asked.
An entrepreneur is always excited to hear that. We will always need money because the ideas and abilities are always there. And don’t forget that the Bank of Industry loan is a little bit more attractive in terms of interest rate than those of the normal commercial banks. So, we took it on and did all the necessary documentations and got the loan.
I am pleased to say that we have been able to pay back more than half of the loan. We just entered the syrup business. This means our marketing approach to revive and revamp the infusion manufacturing sector is yielding fruitful results.
Bank of Industry has even recently approached us to jerk up our loan which is a confirmation that we are servicing our loan to their satisfaction.
I mentioned this because it is important that Nigerians know that the Bank of Industry did that and they did that well because we tend to think that everything about Nigeria is bad.
However, we will always complain about the interest rates in the country. The interest rate in Nigeria is horrible. We are saying that the Bank of Industry rate is better than the commercial banks but that does not mean it’s not horrible too.
We are pushing on to start producing tablets and others, so that we can become a full manufacturing outfit of drugs and pharmaceutical products, and cosmetics products will not be left out.
Can that be the vision of the company in the next 5 years?
Of course, that dream is achievable in the next five years. We are determined. We always plough our profit back into the business. We can do it. It is that vision that drives us. Definitely, in the space of five years, we have turned around the fortunes of the company. Most importantly, Biomedical has established itself for quality. I am told that at some time in the history of the company, they may have had some challenges, but that is no longer the story of Biomedical.
We have zero tolerance for any kind of sub-standard product. We don’t compromise at all on quality and standard. When you say you want to be the quality reference, it’s a very great challenge to yourself and we tend to continue to meet that challenge. Biomedical is very touchy about the issue of quality. We don’t compromise on standard. It has worked for us and it will continue to work for us by God’s grace.
We don’t cut corners in terms of our products. Our quality control is superb. I would say for instance that the most powerful person in the company is the head of quality control. The head of quality control can stop anything from going out. Don’t forget that NAFDAC does not joke with ethical drugs especially and we do not want to be caught on the wrong end of it.
If you do something in five to ten years as a company and it’s working for you and you are moving on, why do you want to change your winning formula?
We want to establish a certain kind of company and I thank God that we are very well on the way to doing that. It’s still a very small company at the moment, not comparable to the giants that we know, but we are on the way.
How have you guarded against adulteration?
To start with, as far as the infusions are concerned, our products are very unique. We are the only one that uses a special type of pouch in the country. And for you to adulterate it, you need to spend lots of money. Infusion production is not cheap you know. Why is it that in the country today there are just about seven producers? It’s very costly.
You don’t just start an infusion factory like that. The machines and all the equipment are expensive. Water has to be purified, sterilized; the processes involved so many steps, because any infusion goes directly to the blood stream. So, there are so many steps.
There are more chances of adulteration with syrups than in infusion, but we have a number of steps in place, which we are not at liberty to discuss, but we are mindful of that possibility.
Because when something is doing well, that is when you find people trying to adulterate it. That is what is peculiar to Nigeria.
As an entrepreneur, can we say you are now achieving your aim of taking over the company and diversifying it?
First, I will say that as an entrepreneur, I have a number of things that interest me which I involve myself in. Though I have so many business options, pharmaceutical production has always been one of them. Just like agricultural involvement has also been one of them. I am very happy that I went into pharmaceutical production (Biomedical) because there were skeptical opinions when we first visited Biomedical. With what we have on ground now, God has been faithful, because we are no longer talking about problems. we are talking about prospect, so why won’t one be grateful.
The reward for hard work is more work, we have to move the company to another level. We have a very strong R and D sector.
Our Research and Development committee is headed by a medical doctor, who is assisted by a pharmacist and a pharmaceutical chemist. These are all in-house, and then we have a network of professors, who do the research for us.
Hence today we are the first company to produce CAPD in Nigeria which allows you to do your own dialysis for those who have kidney problems. It is not even a highly profitable drug. It’s more like a social service but it’s very important in a country where dialysis facilities are so inadequate and people are so poor.
Nephrologists have been using this for years, but they have to depend on imported ones. Now we are producing them. It’s not giving us more profit like the regular infusion and we are using the same facilities. But we allocate a particular portion of our time to producing CAPD because in that profit related activities, we must also look at the service to humanity.
Is this CAPD product a kind of CSR from your company?
The kidney problems are there. They are real and they are significant. I won’t call it CSR, because we going to sell it for profit. I will say that we feel satisfied that we are able to achieve it. The idea was brought to us by one of the nephorosits who are involved with research, and we backed it.
We pursued it, we have done a lot of work on it in the past four years. We started the research about six months after we took over the company. Proudly, I am influenced by the fact that I am very much interested in kidney transplant programme personally.
Sir, in Nigeria, we know transportation system is one of our problems, are you looking at setting up other satellite factories?
Certainly, water is very difficult to move around, because it is heavy. I am a believer in decentralization. I have always known that when we over-centralize everything it’s a problem. Setting up satellite factories is certainly in the plans. We are looking at that but that is something that you do after you have already satisfied certain conditions. I think it is something we can achieve in the near future. I know that one or two of our competitors operates from more than one centre. They produce from more than one place.
Is the company, in its vision, planning on the exportation of these products?
That’s another very good question, If with the foreign exchange situation in Nigeria today and the fact that government seems not to be able to handle the forex issue properly, every company will think about exporting, because you can then earn foreign exchange. However, exporting the kind of products we are producing now could be more difficult than you think; it may no longer make economic sense to export water, though they export some infusion.
We cannot close the door to export, but we haven’t even satisfied the local market. It’s really an economic thing. If there is a market in Benin Republic or Ghana and the market is worth it, there is no philosophy that prevents us from doing so, we are a capitalist organization or a profit making organization.
However, I am not sure that is going to be wise to be talking about export at the moment. On what you mentioned, my answer to it is that there is something peculiar. I will tell you from experience, my belief and as a biased commentator, I believe that our cough medicine is the best in the country. I tell you that people who have used it before have deliberately packed some of it to London. From the days of Bradford Pharmaceuticals, our cough medicine is the best in the country.
This is a kind of exports. If we have a way of doing it, we will do it to make some foreign exchange. You just gave me an idea to a business line, which I will look at. If the market accepts you, why not earn foreign exchange.
Nigeria can also make drugs that can be exported. Yes, the issue is simple that if you want to make analgesics in Nigeria and send it to the UK, the question is, is it not going to be cheaper to produce in UK than in Nigeria.
People export Aboniki to Israel and other countries in large quantity. If you are going to Israel, they will allow one or two bottles. That is how huge the demand is over there.
So it’s possible, but you first have to size up the market. This is because when you get there, you will be expected to work within their own rules and regulations, and a lot of times we don’t want to do that. And because we don’t want to do that, we just have to stay with smuggling things in all the time even along the West African coast. There are a lot of things that we can export, but again the rules there must be complied with.
So why are you marking Biomedical’s and 40th Anniversary and how exactly, do you want to celebrate it?
A: Why are we celebrating? Nigerian owned companies usually face so many problems in this harsh economic environment that turning forty is worth celebrating.
And for Biomedical, which has faced problems in the past, turning forty and still counting is worth celebrating.
How? We want to deworm 400,000 school children in various parts of Nigeria as a CSR project to mark this milestone