Kwara Ethnix Designs currently employs around 80 workers from within the state.
Kwara Ethnix Designs CEO, Frank Cross
An investment by a South African company in a Nigerian furniture factory bears witness to what is possible in Nigeria’s manufacturing sector. Jaco Maritz visits Kwara Ethnix Designs' factory and looks at some of the issues affecting the country's manufacturing industry. From the outside the Kwara Ethnix Designs furniture factory didn't look like much. Even the bumpy dirt roads we had to take to get there made me wonder if this was not going to be a waste of time. I couldn’t have been more wrong. After speaking to the company's CEO and taking a tour of the facility I realised this was a great Nigeria investment success story. When the South African company took over the moribund Kwara Furniture in 2005, the facility was completely run-down. Five years later Kwara Ethnix Designs are manufacturing furniture for the top hotels and businesses in Nigeria and even making
plans to export to Europe and America from its base in the Kwara State capital, Ilorin. Ethnix Designs made its entry into Nigeria when it was approached by the Kwara State Government to invest in a furniture factory. "They knew about our company in South Africa and suggested that we invest in a factory here," explains Kwara Ethnix Designs CEO, Frank Cross. "In late 2003 our people from South Africa came over here and had a look at it. To be honest the factory was pretty run-down but we could see that there was a lot of opportunity here." The two parties came up with a memorandum of understanding which gave Ethnix Designs a 60% shareholding in the new company while the state government retained 40%. In August 2005 Kwara Ethnix Designs Nigeria Limited was registered. Cross says they focus on the upmarket end of Nigeria’s furniture business. "We do a lot of work for hotels and corporate clients throughout the whole of Nigeria. Last year we completed
the Federal Palace Hotel in Lagos, which is owned by Sun International. We have also just completed the Ikoyi Hotel which is managed by Southern Sun," he says. From a core group of 12 staff that flew to South Africa for training in 2005 the company now employs over 80 people. Kwara Ethnix Designs however plans to further expand the business. "There is a lot of opportunity in Nigeria and the economy is growing. Ilorin has grown tremendously from the time I first started coming here. At one time I was one of the very few expatriates in Ilorin and now they seem to be everywhere," says Cross. Dealing with Power Issues Like many other state-owned Nigerian manufacturing industries, the old Kwara Furniture became moribund after oil was discovered. These days it is not so much a fixation on oil as the problems relating to Nigeria’s poor power supply that is holding manufacturers back.
House of Representatives Chairman of the Rules and Business Committee, Ita Enang, is right when saying "the manufacturing sector will not pick-up unless you correct the power sector. [The reason] why most of the textile companies and other companies are folding-up is lack of public power." Although all manufacturing industries in Nigeria have generators, these are expensive to run and in turn make products uncompetitive. "You cannot compete with imported material that is coming from China, the United States, Britain and Germany. What we [as legislators] are doing to help manufacturing is to rescue the power sector," Enang adds. Kwara Ethnix Designs are lucky in this regard as Kwara State, one of the more progressive states in Nigeria, has done a lot to address the issue of power supply. A new sub-station at Ganmo was recently completed and Ilorin currently enjoys very close to 24 hours of uninterrupted power supply from the national grid.
Although the company still keeps a generator for back-up, it is hardly ever used. Exporting from Nigeria Talking about his plans for the future Cross explains that the company is looking at using Kwara State as a base for exporting. "We have clients based in New York, London and Europe who deal with our South African company. It has always been our aim to do a lot of the work for our London-based customers from Kwara State. We can do the same quality products so it makes sense to be exporting to the UK from here.
A soon to be completed cargo terminal at the Ilorin International Airport will also make exporting and importing goods much easier. "We’ve got a new cargo terminal at the airport which we expect to use to bring air freight in. We try to buy as much raw material as we can in Nigeria but there are certain products that we need to purchase overseas. "There are advantages of bringing cargo
into Ilorin as opposed to Lagos. One of the hiccups unfortunately in Nigeria is sea freight which can be unpredictable on timing. We are now looking at bringing in a 747 using the cargo handling facilities here," says Cross. With an abundance of raw materials and a massive population Nigeria has the potential to be a gold mine for manufacturers. With the right political leadership in reviving the power sector many companies similar to Kwara Ethnix Designs might soon be establishing themselves all across the country.
