By Moses Akaigwe
On Thursday, April 20, 2023, Innoson Vehicle Manufacturing Company Ltd (IVM), Nnewi, Anambra State, took a giant step in the efforts to deepen auto gas utilisation in Nigeria when it rolled out city buses, heavy-duty truck heads and a mini car that all run on CNG (compressed natural gas) and LNG (liquefied natural gas).
In an interview after the ceremony, the founder and chairman of the Innoson Group, Chief Innocent Chukwuma, spoke on a range of issues in the auto industry, including the new IVM auto gas vehicles and the recent importation and inauguration of 10 fire trucks by the Minister of Aviation, Senator Hadi Sirika, at the cost of N1.2 billion each. He disclosed that, based on the users’ requirements, his company manufactures and delivers fire trucks that are cheaper and of international standard. Chukwuma described the resort to importation by the Aviation Ministry as a waste of scarce foreign exchange, when the fire vehicles could be produced in Nigeria, and at much lower prices.
Recently, the aviation minister imported 10 fire-fighting trucks for some airports at N1.2 billion each. Was Innoson contacted to produce the vehicles?
Nobody contacted us, and we were not aware of the transaction. But we are in a position to produce what they imported and we can produce according to their demand and specification.
We understand that the fire trucks Innoson produces have 8,000-litre water capacity as against the ones with 14,000 litres imported by the minister…
We produce based on demand. The one you saw at the factory (in Nnewi) today has only 500 litres, and that was produced according to the customer’s demand. If you want a fire truck with 50,000 or 100,000 litres, we will produce it for you. It is what you need that we give you. The number of litres is not important. What is important is what one needs and how well the fire truck is built to satisfy the requirement.
If you were contacted to produce that specification, 14,000 litres, how much would you have charged the government?
If they had approached me to produce fire trucks with 14,000 litres, I would have done it at a much cheaper price. There is no need comparing the prices, but mine would have been much cheaper. First of all, the sea freight for that finished product they imported is very high. It must have cost about $20,000 (excluding their value) to bring each of those fire vehicles to Nigeria.
So, they know what they are doing. All I know is that, if they want it, I will produce it at a cheaper price and when I finish, I will deliver to them vehicles that are much better than what they imported. Moreover, the country will save a lot of foreign exchange, if I produce for them.
They said they imported each fire vehicle at N1.2 billion. Convert it to the dollar and see what they are doing to our foreign exchange. The foreign exchange is too much for the fire vehicles. But I will save the country a lot of forex if they buy it from me.
While in office, President Goodluck Jonathan had directed that government agencies should buy vehicles from Innoson and other local automakers. How has that been in the Buhari administration?
Some of the organisations are doing it, but some always find a way to disregard the need to patronise made-in-Nigeria. However, some are doing the right thing.
What are some of the challenges that you have?
The major challenge we have now is for people to recognise the fact that ours are made-in-Nigeria vehicles that should be patronised so that we employ more people to work. We have many youths doing nothing. I feel it is because manufacturers are not being encouraged to grow that many youths are idle. I also feel that, if people are buying locally made products, we will be able to employ more people and it will help to stop the insecurity problem in the country. When the youths are busy, there will be less trouble. Let us keep our youths busy by patronising made-in-Nigeria products. If I have more buyers demanding my IVM vehicles, I will definitely employ more people to make sure I produce enough for the market.
You said some government agencies buy your vehicles, but let’s focus on aviation. Does that sector really patronise you?
Yes. If you go to the airport, particularly, Abuja airport, you will see that my vehicles are there. They are the ones who are using it. I believe the other airports are not aware yet. But, I believe that when they see the vehicles, they too will buy. Maybe they are not aware that I manufacture fire-fighting trucks. I believe if they are aware, they will come because the other vehicles that they bought from us are serving them very well and they are happy with them.
How many direct and indirect jobs have you created?
All my factories in Nigeria combined have a total of 7,400 workers.
Apart from price advantage, what is the quality of the fire-fighting trucks you produce here in Nnewi, compared to the ones the government imported recently?
They are all the same thing, because I buy the best quality components from wherever they are available, in order to produce my fire trucks. A very important component in a fire truck is the water pump. It is what determines how far the water can go to quench a big fire, especially when the fire is in a high-rise building or far away from where the vehicle is stationed. We source our pumps from the best manufacturers in the world. So, the quality standards of Innoson fire-fighting trucks are as high as any other good one, anywhere.
What inspired you to produce the LNG (liquefied natural gas) and CNG (compressed natural gas)-powered vehicles Innoson unveiled today?
After the LNG and CNG-powered vehicles, another one is coming, and that is the electric vehicle.
But, let’s talk about LNG and CNG first. As the prices of petrol and diesel continue to increase, the only solution for our vehicles to continue moving at affordable costs is for us to migrate to LNG and CNG-powered vehicles.
Using gas to drive vehicles is about 60 per cent cheaper than other forms of fuel. So, that was why I made the options available for people to choose for themselves. A huge number of vehicles in Benin, Edo State, are LNG and CNG-powered. This is because they have seen the different gains. Only few people are still talking about petrol or diesel in Benin. They have tested auto gas and understood the difference.
How soon do we expect your electric vehicles (EVs)?
My electric vehicles will soon come out, because I want to produce the major things in Nigeria. I want to surprise other countries. I want to produce the battery in Nigeria before this year ends. After the LNG and CNG have penetrated the market, the next phase is electric vehicles. I am doing it one by one so that Nigerians can make a choice on the one they want to use.
Beyond patronage, in what other areas do you want the government to assist you?
Patronage is the main thing. I am not talking only about government this time. I am talking about Nigerians in general. Let Nigerians give patronage to all locally made products, not only my vehicles, but let them improve their attitude to made-in-Nigeria products in order to move our country forward.
How far have you gone with your case with GTBank?
GTB is acting as if they are bigger than the court. They have proven to Nigerians that they are bigger than the court. I have done my best. I am doing everything I should do, but the bank seems to be bigger than the court of the land.
Does it mean you have accepted defeat?
No. When you indulge in a delay tactic, the money continues to accrue interests. But I believe that when they are ready to pay, maybe I will take over the bank. They have changed their brand name to GTCO. However, it is the court that will decide. I am in the court already for them to reverse the name.
What is the state of your vehicles’ loan scheme whereby you give out vehicles to people to operate while they pay in installments?
It is still on and people are responding. I started with the first batch three years ago, and it will end this December 2023. After this set is done with, I will make another batch available. About 90 per cent of the beneficiaries are re-paying well, but a few are not paying. We are doing it in such a way that anybody that stops paying, we replace him with another person.
What is the update on your matter with the Imo State governor that took delivery of about 200 units of your cars and allegedly refused to pay?
We are in the court. He doesn’t want to pay the money. He just wants to shut down the Innoson factory. But I don’t believe God will allow him. He doesn’t want the court to proceed with the matter. Every day, the case is delayed over one issue or the other. The court case is not going on.
With all these cases, are you not discouraged with the Nigerian business environment?
I believe such things do happen because I am a businessman. I know how much I used to start the business and grew it to this point. Why should I be angry or discouraged at this point? I cannot be angry. I am not perturbed because I know that something like that will always happen. We are in Africa.
How have these court cases impacted on your business?
Since the Imo State governor refused to pay, it has been affecting everything in this company. This is because if we were employing 1,000 persons every year, we cannot employ more again because he has seized the major capital we are using to employ. It is when he pays that we can start again to produce to full capacity.
We are due to employ people now, but due to the debt we cannot employ them until we get our monies back. It is really affecting our company and even his brothers who are looking for jobs in our company. They cannot get the job because of it. Innoson is for everybody because we employ anybody who wants to work, irrespective of where they come from.
How many factories do you have all over Nigeria?
I have Innoson Technical, Innoson Mill, in Enugu; I have Innoson Wood Processing, also in Enugu. I have Innoson Vehicles in Nnewi, I have Innoson Tyre Manufacturing. The tyre manufacturing company was shut down in Enugu by the National Environmental Standards and Regulations Enforcement Agency (NESREA). They said we cannot produce tyre without their approval. They shut the factory. When they shut it down, I paid all the expatriate staff off and they left. Later, the agency wrote us a letter to start again after one year. But by then, the expatriates had gone home and it didn’t make any meaning any longer. The Bank of Industry (BOI) actually sponsored the investment with about N4.5 billion.
Innoson Technical is the largest plastics company in West Africa.
How much exactly is GTBank owing you?
You know the money is attracting 22 per cent interest every month. So before I tell you how much it is today, I will have to calculate it. The last time I did the calculation, it was over N40 billion. That was the one I calculated two years ago.
Is this the first time the heavy duty trucks are making a public appearance?
Yes. This is the first time. After producing the first batch, I decided to do the commissioning. I looked towards that direction because when we wanted to send goods from Lagos to this place (Nnewi), the transporter charged us between N800,000 and N1 million. They said it was because of the cost of diesel. I now asked them if they would be interested if I make vehicles that use natural gas that will be 60 per cent cheaper. They said they would be interested. That made me to go into the production of gas-powered buses and trucks. The aim is to ensure that the prices of things are cheaper across Nigeria because, with gas, the cost of transportation will reduce. With the new vehicles that run on gas, the transporters can charge N200,000 or N300,000 now for the goods they are presently charging N800,000 and N1m.
Can long-distance transporters also use the intra-city buses you unveiled today?
We are working on all that. We have such plans. Before December, you will see that gas vehicles will be what the transporters will be using, if they are ready. Anyway, the transporters are already used to second-hand vehicles and they are not interested in new ones anymore. But, with this, they will come back to new ones.
What arrangement is being made to have filling stations where vehicles running on LNG and CNG can refuel?
Nobody will build a filling station without being sure it will be sustainable. For example, in Benin, the whole filling stations have it. As they have started, it will spread to other areas. The people in charge of it have asked me to build one in Awka and another in Onitsha. I will also tell them to do one in Nnewi here because of us.
In your assessment, to what extent do you think the Auto Policy has impacted your business and the industry in general? Will you describe it as a success story?
Yes, it is a success story, only that they don’t give priority to people that are doing real manufacturing as against those that are doing SKD (semi-knocked down) production. Nothing differentiates us that are doing manufacturing from the people that are doing mere SKD. The policy has given the SKD assemblers equal opportunity, which is unfair to some of us that have invested heavily in manufacturing. They have to encourage the people that are doing true manufacturing so that investors will be encouraged to go into manufacturing.
If the policy does not give encouragement to people doing manufacturing, all of them will be forced to concentrate on the much simpler SKD assembly, in which case there will be no need to build factories to do serious auto production anymore. I don’t do SKD, I do manufacturing. SKD should be removed from the policy.
Do you have plans to diversify into other areas in future?
No. Before I go out of any business I am doing to go into another one, I have to be sure that it has stabilised. When it has stabilised, I will then think of another thing. Motor industry is a different sector. You can see that I started from pick-up, then buses, cars, SUVs, and now trucks and trailers, as well as luxurious buses. I didn’t start all of them in one day. And we are still building new auto factories here in Nnewi.
What has your company done in terms of corporate social responsibility?
We have many of them. For instance, in education, we have what we call Innoson Kiara Academy. It is a technical and vocational institution established by an international consulting firm in partnership with IVM Motors that helps the young ones acquire vocational skills.
What are your succession plans?
My target is to make sure that my company is quoted on the stock exchange. When my company goes public and is quoted, I will know that I have achieved my goal. Then I will be happier and be looking at it growing.
