Foreign investors eye Nigeria’s middle, upper class


    

Oluwaseyi Bangudu. PREMIUM TIMES. June 23,2013        

More companies are showing interest in the Nigerian market.

Despite the challenging business environment, foreign investors have continued to eye the Nigerian market, recently exhibiting more interest and focus in its middle and upper class.

The investors’ interest range from automobile, to assorted wines and brewery, mobile phones, Jewellery, among others. Despite the obvious challenges the nation suffers, such as lack of sufficient infrastructure, lack of adequate electricity, political instability, insecurity, multiple taxation among others, the investment choice of foreign brands have not been hampered but rather, appears to rise.

Athmane Lakhlifi, Head of Export Sales, Miele, a German based manufacturer of high-end domestic appliances, commercial equipment and fitted kitchens, based in Gütersloh, Germany, said on Saturday that the company has taken its time to study the Nigerian market and concluded that Nigeria is the most suitable nation to invest in and open its mega outlet, the first of the firm’s outlet in West Africa.

“We find customers that can afford our appliances everywhere in the World, and we also find them in Nigeria. However, it is not all about being able to afford the products, but handling the customers as well,” he said, adding that the firm took time out, about a year, to study the Nigerian market, the culture and the people and is convinced that they can handle the seeming challenges and work with the citizens.

The Managing Director, Miele Nigeria, Mustapha Olorunmbe, said the products are already being received with open arms, as about eight of ten prospective customers end up buying the products.

“Our products belong to the upper and middle class of the society and knowing that, we have brought the right products that would give them the value they deserve. If we don’t bring these products to them, they will travel abroad to buy them,” he said.

The organisation said it views the Nigerian market as a big market, despite the fact that it is already operating in over 40 countries globally. It said it understands the Nigerian electricity problems and has sorted out challenges that can erupt from issues such as low voltage and power outage.

Founded in 1899, the firm’s products include freezers, fridge freezers, dishwashers, tumble dryers, washer dryers, washing machines, vacuum cleaners, cooking appliances, rotary irons; built-in convection, steam, and speed ovens; hobs (cooker hoods, cook tops); freestanding and built-in refrigerators, freezers, and wine coolers; and coffee systems.

In 2007, Miele, which has won series of awards over the years, was given an award for being the most successful company in Germany that year, beating the previous year’s winner, Google, which placed second, and Porsche, which came in third.

Miele is, however, not the only company eyeing Nigeria’s high end market.

Earlier in the week, Tecno Telecom Limited, a high-tech company specializing in the production, sale and service of mobile communication products, though acquainted in the Nigerian market and otherwise considered a phone maker for low-end users, announced that is seeking a niche among the big names in the phone manufacturing industry by introducing its first major high-end user smartphone, the Phantom A.

A major supplier of premium brands and premium services, the organisation expressed its desire to play in the high-end phone user market, as this first of its kind product would compete with top brands that produce such products with a very competitive purchasing price.

Chidi Okonkwo, the Deputy General Manager, Tecno Telecom, Nigeria, said “We are taking a giant stride with the launch of Phantom A. The phone was designed with a passion to give everybody access to innovation unlike other brands of similar quality, which are reserved for the high-end customer by reason of their prices alone”.

The Phantom A smartphone is the outcome of a collaborative effort of the firm’s French and Korean design team. It is a 5.0 inch high definition touch screen and dual-SIM hand set with 1GHz dual-core CPU, 1GB internal memory, an 8-mega pixel camera (front), the latest Android 4.1 Jelly Bean Operating System and a flash share which allows users to share information without either WiFi or internet connection. The phone also has a 13-month warranty.

Tecno partnered with Etisalat, a telecommunications company in Nigeria, on this product, and the partnership guarantees that the phone comes with a 12 months free data bundle powered by the firm’s 3.75G, HSPA+ network.

The firm said it is achieving great success with its strategy which resolves translating advanced technology into superior localised products, with fast growth in Africa, especially in Nigeria, where it plans to establish a manufacturing plant.

Finance experts have said foreign investments can make a positive contribution to Nigeria’s economy by providing employment, technology, management resources, and capital that would otherwise not be available and thus boost her economic growth.

Over the years, Nigerians have benefited from both the direct and indirect employment effects of foreign subsidiaries of international organisations located in Nigeria.  Their technology and management resources have helped to stimulate economic development and industrialization, and improve efficiency.

The presence of these firms also increases the number of players in the local market and hence consumer choice. This increases the level of competition, thereby driving down prices. Furthermore, imports from these countries bring in a variety of products previously unavailable because local manufacturing companies were unable to provide them.

A major challenge, however, is that consumers are often quick to buy the imported goods rather than purchase locally-made ones, further contributing to the downfall of local industries.

Nigerian exporters are also not doing badly in their exploits. According to the Central Bank of Nigeria, in quarter 1, 2013, the total non-oil export earnings by Nigerian exporters stood at US$1,136.33 million at the end of the review period. This indicated an increase of 15.1 and 9.3 per cent above the levels in the preceding quarter and the corresponding quarter of 2012, respectively.

According to the regulatory body, the development was attributed, largely, to the 66.9 and 70.3 per cent rise in receipts from the industrial sector and manufactured products, respectively. A breakdown of the proceeds in the review quarter showed that industrial, manufactured, agricultural, minerals and food products earned $634.2 million, $322.6 million, $89.9 million, $67.9 million and $21.7 million, respectively.

The shares of industrial, manufactured, agricultural, and food products as well as mineral and transport in non-oil export proceeds were 55.8, 28.4, 7.9, 6.0 and 1.9 per cent, respectively.

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