Entrepreneurs Need Grants, Not Loans – Okpala | Independent Newspapers Limited
Newsletter subscribe


Entrepreneurs Need Grants, Not Loans – Okpala

Tony Okpala
Posted: Jun 14, 2016 at 6:36 pm   /   by   /   comments (0)

Tony Okpala is the chief executive officer of The Carlsbury Winery, a company that is into the manufacturing eof wines. He says Nigerian entrepreneurs need grants to survive the harsh economic environment, adding that there is no need for Nigerians to import wines because of the high quality of the product that can be manufactured locally. He spoke with Ikechi Nzeako and Nkasiobi Oluikpe. Excerpts:



Why did you set up this company?

I have passion for drinks. I also saw a lot of fruits like pawpaw, pineapples and others that were wasting which we can convert into wealth.


What do you produce?

We are into food and beverages; we manufacture alcoholic and non-alcoholic wines. Our brand is Cartier, packaged in champagne bottles. One thing that fascinates me about the plastic red wine is that Nigerians so much like red wines from overseas, red wines have their own species of fruits which is grapes, but back here we have richer species of fruits that you can use to achieve better quality wine as most of them are medicinal.

If you look at pawpaw for instance, it is medicinal. So, when I saw what we have here, I said, okay, we can use our local fruits and achieve better quality, better wines than what is imported into the country.


For how long have you been in this business?

I have been in business since 2006.


What is your background?

I studied food technology in Austin, Texas, USA and I have a master’s degree in business administration.


In terms of quality, how would you rate the wines you manufacture and the ones that are imported?

One thing we don’t understand is that we have very good research institutes in Nigeria like Yaba College of Technology, University of Lagos and Federal Institute of Industrial Research, Oshodi (FIIRO). We make use of the results of these bodies. What people fail to understand is that you may develop a product, but the only good thing about it will be your ability to improve on that product.


Are you saying that you use the result of the research done in Nigeria to manufacture your products?

Yes, because they are results that can be praticalised.


Do you import any part of your raw materials?

Yes, we are having challenges. We have to import the foil and the cork. Some persons ask why we don’t use plastic cork; it is because of fear of adulteration. Because when you open a wooden cork that we use, you cannot put it back. So, assuming you can cork it back, it would have been easy to adulterate and when consumers buy, they will assume it is your product. Besides, the wooden cork also makes for better preservation, to keep the content same. It cannot be manufactured in Nigeria.


How about the content inside?

Every other thing is 100 per cent local content; the raw materials are readily available in Nigeria in high quality and quantity.


So, how has the business of wine making been with you in the last few years?

The issue is that we are having the challenge of so many foreign wines coming into the country without NAFDAC approval. When they flood the market, it becomes always difficult for us to sell ours. The problem now is the cost of dollars and exchange rate, the thing is affecting local production.


How about the local environment, I mean in terms of infrastructure?

Our environment has been very unfriendly. The issue of electricity supply is still a problem, and on top of it, the price of fuel has increased. Nigerians are still in a financial shock, but I believe things will turn around for the better. But at the moment, the purchasing power of Nigerians is low as everybody is very cautious about how they spend money.

Again, the foil we used to buy at N10 and N11, we now buy for N25. So, when you combine all these things, you will discover that the cost of production has gone drastically up.


What do you think government can do for entrepreneurs like you?

It should give them grants, not loans. They don’t need loans. If you give them loans, you are creating more problems for them. They should partner with entrepreneurs; we have various organisations they can belong to. Even if they are given loans at a very low interest rate like one digit, it should be the type that can sustain them. It is not the type of loans you give while there is no working capital. After buying your equipment, how do you get your raw materials? These are the things we are supposed to put into consideration when giving out facilities.

Financial institutions want ongoing businesses, but then we have viable businesses that need finance to take off. But the financial institutions are not ready for start ups, even the ones that are already ongoing are still struggling to survive. There are new ones that people can use to create jobs, they do not want to give them facilities. They won’t even listen to them.


If government can look inward and find ways of giving small scale businesses grants that will be monitored, it will go a long way. There are some of them that are in established organisations like Technology Incubation Centre (TIC), the TIC knows the entrepreneurs that are there and are serious. They can channel the grants through the TICs. The people can easily manage the funds and make sure they utilise them for the purpose they are meant for.


But the Bank of Industry has loan schemes that are one digit?

If you talk about BoI, it is just on paper, because they decide to come into relationship with entrepreneurs by channeling them to the microfinance. BoI has microfinance under it which gives out loans at two digits interest rate to entrepreneur. Meanwhile, the amount they are giving out to entrepreneurs is not enough. The maximum some of them give is N2million. The only good thing is that there is room for raw materials with the N2million. But if you look at it, you will discover that the infrastructure on ground right now is not helping matters. The cost of things is going up. By the time you give an entrepreneur N2million and he goes to the market with it and comes back empty, what will he do.


What do you say to Nigerians who prefer to buy foreign goods to made-in-Nigeria products?

The issue is that government is encouraging them to buy the foreign products because they are not encouraging the local producers. Most of the foreign products they buy are not approved by the appropriate authorities, some of them are smuggled in. What I expect government to do is to encourage local production via giving of loans.



People are saying government should provide an industrial park where entrepreneurs can stay where they can provide them with all the needed infrastructure; how do you look at it?

Government has done that but they are not living up to it, even the TIC has a big generator and water system, there is lack of maintenance. The electricity bill there is something else, meanwhile, you call them incubators, people you are trying to bring up and what they are paying is equivalent to what is being paid outside. How then are you helping them?