You need to do more to survive — Nsiah-Poku

Our Editor, Theophilus Yartey (GB), interviewed Ernst&Young (EY) 2015 Emerging Entrepreneur of the Year for West Africa,  Kofi Nsiah-Poku, a man of many parts , consultant pharmacist , manufacturer of pharmaceuticals and food products, a fellow of both the Pharmaceutical Society of Ghana and the West African College of Pharmacists, an educational philanthropist and a self-taught numbers man, on the EY EOY Awards, starting out, surviving and thriving in the harsh terrain of manufacturing in Ghana. Below are excerpts.

GB: Congratulations. Recently you made Ghana proud, how was the feeling like?

KNP: It was great because it was something I never expected, after coming out successfully through such a drill, you feel very happy because it is not one of those competitions where people sit and decide for you; this is one you have to go and defend  and get it yourself. 

GB: Did you see it coming?

KNP: On the  first day, I didn’t. I felt some of the competitors were ahead then I decided to reorganise myself to make sure that  I did a better job the following day. The first day was for presentations, videos on projects and the like. These involved a lot of third party input. So you could have slick presentations after which you were asked questions by other competitors and an in-house panel. The second day was dedicated to an interview and a proper grilling and cross-examination of your achievements, claims and financials by senior business executives, past EY EOY alumni and academia. You would be on your own then. I thought at that point I did better. Because it involved Nigerian entrepreneurs who typically post much bigger turnovers because of the size of their market so we didn’t really think we were going to win anything.

GB: You find yourself in a very tight sector, which is manufacturing, it is one area that every businessman runs away from, and it looks like you have been doing very well and it became obvious when you won the awards. What has been your motivation?

KNP: When I started business I was also doing retail and later moved on to wholesaling and distribution. Then at a point I realised  if the manufacturer decided to cut supply to you, your business was finished. So it was important one put himself into the manufacturing bit.

Some years before getting into it, I had decided to build my own brands and I gave brand names to manufacturers to make for me. When we started manufacturing we used the same brands which were well known at the time. 

I had no choice than to take this approach, because if you wanted Malafan for instance, we were selling it, but someone was previously producing for us. If a customer or patient needed it, we were the ones making it and it couldn't be sourced from any other than us. So that gave us an advantage because we had come to own an accepted brand before we started manufacturing ourselves.

The brand had become a trademark to us and could not be made anywhere in the world, so if you didn’t want the made-in-Ghana one, then it meant you didn’t want to buy that brand. It was a big challenge but we did a lot of marketing and it started working.

We also looked at what the customers needed because we needed to satisfy the consumers. For example, we have a product called Kwik Action, when we started nearly all cold preparations made you drowsy, that means when you took it you were not supposed to drive, go to the farm or do any serious work.

So we realised this really common ailment needed a much better solution that would be more conducive to us in the developing world. Out here many cannot afford not to go to work because of a common cold, so we decided to remove the ingredients that caused the drowsiness and put in a new ingredient that would have the same effect without affecting output.

We did not copy what others were doing, but tried to remove the bottlenecks in the original version, substituted with something else that would be good for the less-endowed people in society, and even for everybody. Though people have cold, they need to work, because they don’t want to be out of work. 

Fortunately, Kwik Action has been accepted and now demand is high, and we produce millions of tablets every month. If you are able to satisfy consumers and they are happy, then you will remain in business. 

GB: Does it mean you have a strong Research & Development (R&D) Unit?

KNP: R&D is different, first you must be innovative. You need to understand what you are producing for the market for people to accept it. Once you have that, then you can go to the lab to see how you can do it. If you are not innovative, you may have strong R&D but will have nothing to develop.

What product are you developing, how will the consumers take it? These questions must be answered as was the case when we were making Gluconade, which is an exact copy of a famous global brand.

We looked at it and we realised that it contained 100 per cent glucose but I thought that with the 100 per cent glucose, you put people at risk of diabetes, so I decided to break it down into 50 per cent sugar, 50 per cent glucose, where the glucose will be absorbed immediately and the sugar will then convert into glucose and fructose, and the glucose will be absorbed later so that there is no high potential of loading the consumer.

So you always have to know the exact product to give for the consumer to benefit. The consumer needs the energy but there are various ways of giving him that energy.

Another example is a product called APC. APC had existed for decades before us and one of the ingredients had been banned so it had been removed from the market.

We looked at it and said no, this is a strong brand, we can look at the ingredients, change them and still make APC beneficial and acceptable. So we decided to remove the banned item, replace it with something else which still made it as efficacious as the erstwhile brand and it became acceptable to all.

GB: Is every one of your over 100 brands doing well?

KNP: No, about 20 per cent give us about 80 per cent of the turnover. We need all of them to drive the market because they are also needed. Most of the time, when we develop about 10, at least about two excel, and they take care of the rest.

It is not everything that we bring to the market that also sells well. People do not have interest in everything so we create a wide bouquet because we cannot be successful in everything we innovate.

Some just add up to the volumes by need. For example, we do a copy of Viagra and we put it on the market. By the nature of its use, it is not everybody who needs it, but for such products there is a very good profit margin. Even if you sell less you still make some money because of its need.

We try to combine and take every bit of the market that exists. We don’t say because we are not going to get high value, we don’t go into that part of the market.

GB: You are strong on the technical aspect of the business, as well as the entrepreneurial. Normally as an entrepreneur you don’t find both qualities in one person. How did you rarely develop these two qualities?

KNP: I will say the technical one was given because that is what I have been doing from my educational background. I used to teach students and I developed myself. I read more management books than scientific books. I had to learn accounting because I didn’t know the ABC of it.

It has taken a lot of effort to learn the other part of the business and I had to learn on my own. You need to learn and understand so you don’t just take anything people say.

I had to read a lot and learn on my own to be able to acquaint myself with all these. If you have the technical knowledge but lack the commercial capability, it will be difficult to make it. You always must be able to balance the two.

GB: Every businessman talks about high interest rates, very high electricity and water tariffs. How do you manage to run a vibrant business?

KNP: I must say the cost of doing business is extremely  high. With regard to interest rates, we took a loan to support our own equity when we started Healthilife. At that time the interest rate was 16 per cent, and we thought it was going to come down at some point, but today it is about 30 per cent.

Regarding electricity supply to the factory, we were paying GH¢130, 000 per month only about four months ago. In February it had gone up to GH¢279,000.

This has come from an average monthly bill of GH¢40,000 only 12 months ago.  So you can see that slowly things are getting out of hand, and we are competing with companies from other parts of the world, and that makes it really difficult.

When others come in with cheaper cost and they come to compete with us, it becomes difficult. Unfortunately in our environment the only thing a manufacturer cannot increase often is the final consumer price because of low purchasing power. So manufacturers are truly disadvantaged here,taking into consideration the fact that we provide jobs to people as well.

 What one has to do is to be very innovative. We will keep innovating to make sure that we survive and are always ahead. People are always following so we are able to make some margins to aid us survive.