National Wire About Nigerians, Nigerian Business and Other Stories
The bakery industry in Nigeria is ever lucrative because people must eat bread on a daily basis. But bakers have expressed worry over the high costof equipment especially floor, which is locally sourced. Gbolahan Olakunle Samuel is a Singaporean trained baker who has diversified from cakes to bread making. In this interview, he told DAYO EMMANUEL the challenges in the baking industry in Nigeria and also emphasised that the quality of bread determines patronage. He is of the opinion that Nigeria should diversify the economy from relying solely on oil before crude oil price comes back up. Excerpts:
You mentioned that backing is very lucrative but there are so many brands of bread, how do you think someone coming fresh into the business can make a headway?
The truth is that the product must be good. There are breads and there are breads, the quality of the products makes it unique. We have a bakery and when we started, there were lots of breads being produced but of course, because of the quality of the products, we were able to penetrate. It is the quality of the bread you have, I am not sure we are able to meet the demand. The truth is, all bread are sold you don’t throw them away. Even the freshness, some people will tell you they don’t want it fresh, they want it hard. When you look at the class of the bricklayers the labourers, they will tell you they want it hard but of course the quality of the bread makes it unique and it makes you penetrate people who can afford to get quality bread. We do a lot of variations, we have sardine bread, coconut bread and what have you, so even the elites who possibly know it, they want to try it, so I think the uniqueness of the bread is key in penetrating the market early.
What is the health benefits of bread? Some say white bread is good, wheat bread is bad, which is really safe?
The truth is that bromate bread is unhealthy from research, it causes cancer and other related diseases. Most of your so called ‘Agege’ bread have bromate, which is not healthy. For floor, you have white floor, you have white floor is actually processed. Recently, from discovery, we also learnt that wheat floor is not too healthy as most of us think so really for me, I will go for my white bread any day. For me I don’t produce wheat bread because I have personal reservation for it but I do white bread because for me it is convenient and I think gives more profit. If you produce 100 loaves, you end up selling all of them before you sell 10 of wheat. As much as Nigerians claim to be health conscious, we also have people who are more concerned about the taste and the pleasure they derive from it, so, for me, it is still my white bread.
Recently I noticed the price of bread went up, what do you think is responsible, they said it is dollar rate, are we buying in dollars?
The price of everything in Nigeria has gone up we need to be very realistic, it took us a while before we had to increase the price of our bread. We increased some weeks ago when we can’t break even anymore. A bag of floor we were getting at N6,000 or N7,000 before, now goes for between N8,000 and N9,000 and it is difficult to make profit without increasing the price of the product. I know floor is produced locally, sincerely, I don’t know, the price went up but they claim it is the dollar.
Sometime ago, Nigerian economy was said to be the best in Africa but today can we really say that? When do you think the economy can pick up again?
I think the most important thing now is to diversify. Like you mentioned we heard the economy was the best in Africa but we didn’t see it. The level of corruption is eating deep into the country and I think the fact that the price of crude oil has fallen did not help things. If we diversify, I think we are going to be able to break even eventually. For us, we diversified into bread from cake and looking into how to invest. Like I told somebody
recently, I don’t even pray the price of crude oil comes up yet. I wish we could channel our energy to something else or boost our economy before the price of crude oil comes up. I pray things get better, it may take a while but I know things will get better.
When do we expect the price of bread to go down to normal?
The moment the price of raw material comes down, the price of bread will come down, it is easier to even sell at N200 than to sell N250 because you get buyer quicker. It even took us a long time to increase because we needed more people to buy. I know the moment you buy our bread you are stuck to it, of course, when we realised we couldn’t break even, we had to
increase. So the moment the price of raw materials come down, the price of bread would come down, so we should be pleading to the likes of Dangote and Honeywell.
Where do you thing to see the business in the next five years?
I was in a bakery sometime ago and I saw people stacking floor bags up to the roof and NAFDAC could classify low scale bread makers as those who produce between 1 to 50 bags. We are still a long way to even producing high scale. By five years’ time, we are hoping to be able to do that, to producing a minimum of 100 bags of floor per day, so we still have a long way.
What can you call the challenges in the baking industry?
Well, one is staffing. Nigerians are not willing to work, and they probably want a place to draw salary and not produce as much. Another thing is capital and equipment for bread is very huge, very challenging in starting. Once you able to invest a capital in it, then every other things get stable. Another thing is that you have a lot of waste coming in once you
have a major hazard. Once you probably don’t get your yeast right, you have problem. The hazard in bread making is high, once you get something wrong that is a big loss. There are several issues.
There are so many brands these days, what about the competition?
There are lots of competition. Once your product is good, you will be able to penetrate the market. Quality has a way of expressing itself like I tell people. The people would even be the ones advertising for your products.
What is your assessment of the Nigerian youths, are they willing to go into
the baking business and other SMEs?
The truth is that the current economic situation is not encouraging. A lot of people are getting into the business and getting empowered. More matured people are going into bakery business and more young people are going into the SMEs.
