Michael Aguzie, CEO of Nigerian chips and snack food company Harbin’s Foods, is looking to penetrate the flavoured potato chip market in Nigeria, which mostly consists of imports. Despite the fact that the company’s locally produced chips are almost half the price of the international brands on the market, getting Nigerians to trust local brands is a challenge.
“We as Nigerians always believe that foreign brands are better than locally made brands… which poses a challenge to us,” Aguzie told How we made it in Africa.
With the cost of importing international products increasing their prices, locally produced products are more affordable to Africans, said Aguzie.
“I am trying to encourage Nigerians to be able to snack on something locally made, that has almost an international kind of taste,” explained Aguzie.
He added that the company sees developing the trust of Nigerians as a long-term goal, and believes that in order to conquer the market, Harbin’s Foods first has to win over Lagos.
“If you can conquer Lagos with your brand or with your product, I’m 100% sure that you can then conquer the whole of Nigeria.”
Harbin’s Food is still new to the Nigerian market, having only imported its chip-making machine from China in 2012. Aguzie believes he has not yet captured even 10% of the Lagos market. However, with his chip-making machine capable of producing 25kgs of chips per hour, Aguzie believes his company is positioned to grow as more and more Nigerians start to trust in his brand.
The company has also found a partner to launch a burger restaurant, where the same machine can be used to make French fries.
Conflict in the north a potential challenge
According to Aguzie, the best potatoes in Nigeria come from the north of the country. However, the conflict in the region, catalysed by a number of bombings and attacks by Islamic militant group Boko Haram, poses a potential threat to the company’s supply of produce.
“We don’t know what is going to happen in the future, but for now we still get our produce anytime we want [from the north].”
Although Aguzie said his business has not been affected by the violence (and highlights that it is still possible to do business in the area), he is preparing a back-up plan just in case: he has been talking to farmers in the southwest about producing potatoes.
“From my understanding, the soil in the north is the best for potatoes… [but] I want our farmers in the southwest to be able to produce the same potato.”
Advice to entrepreneurs
“Not everyone should be an entrepreneur,” said Aguzie, adding that there is a perception in Nigeria (especially among the youth) that being an entrepreneur is about getting rich and making a quick buck. However, he believes that being an entrepreneur is about innovation, having a dream and working hard.
“The fact is that I still strive hard every day, hoping and believing, because I believe so much in what I do. But the so-called entrepreneurs want to get rich immediately. They want to start a business, and get rich within three months.”
He advises aspiring entrepreneurs to focus on building sustainable businesses, and to invest in their own business when they do start making a profit, rather than spend the money on buying a flashy new car, for example. He added that true entrepreneurs have perseverance.
“Apart from a dream you have to have something like perseverance – for when the money is not coming in, so you don’t give up and still stick to your dream… because that is something that most entrepreneurs don’t have.”