SUSTAINABLE DEVELOPMENT NETWORK LIMITED

Sawdust To The Rescue
BY GODWIN IJEDIOGOR

The Guardian November 6, 2004

Honour came calling recently for Godson Echegile when he won a merit award for outstanding contribution to the development and utilisation of Nigeria's raw materials. In addition to being export material, his briquettes, which are made from sawdust, supply an option for industrial and domestic heating locally.

WHEN Godson Echegile set up Celina Industries in Ota, Ogun State, it was to package flour. But having being in the wood industries earlier and from his experience during a trip to Taiwan, he soon discovered that the factory could as well convert saw dust, which is readily available in every saw mill waste, into briquettes for domestic and industrial heating purposes, and especially for export. An interesting fallout is that briquettes would contain deforestation and aid the campaign against desert encroachment, especially in the northern part of the country, by providing an alternative source of energy to the poor who will no longer fell trees for cooking because they cannot afford kerosene.

ECHEGILE can hardly contain his enthusiasm. He says, "briquette is a readily available replacement for firewood for home cooking, especially in the northern part of the country where there is serious desert encroachment problem as a result of deforestation. It is used in the southern part of the country also, including Lagos, but especially by the bakers for the heating of their ovens. It is much cheaper than firewood or gas and in terms of heat value, it is also higher than even the hardest of firewood you can find around in the country. It is also cheaper to manage than other sources of heating energy."
Until recently, briquettes were more lucrative for export. But the suspension of the Export Grant Programme by the Federal Government as a result of alleged abuse and misuse affected the Echegile's export activities. Ever resourceful and innovative, he looked inwards and there has been no looking back.

"We were exporting the product previously but since the suspension of the 40 per cent Export Grant, we have reduced the quantity we now export and are trying to see if we can develop the local market. That 40 per cent grant was quite substantial in our cash flow. So if you remove it, we cannot break even in the export trade," he says.

At the moment, Echegile's is the only such industry in the country. Over 99 per cent of its products were formerly exported to Europe, particularly Netherlands. "We were competing with such products from South Africa, Ghana and some parts of Asia.

"It could still be lucrative if the company could push up the price internationally, but that is quite difficult, because we contribute less than one per cent of the total international market of the product. Indeed, any attempt at that would mean pricing ourselves out of a market, over which we do not have control and where there are other suppliers."
Of the ill-fated Export Grant Programme, Echegile says "We have met at the Manufacturers' Association Level to discuss this and the export group has also done quite a lot in reaching out to the ministries of Industries and Finance on this issue. So we are hoping that the Federal Government will, maybe in the new year, lift the four-month-old suspension. Our warehouse is now saturated as we have up to five months production in stock."
Sourcing the main raw-material- sawdust has not been a problem, but like everything in life, the conversion of sawdust to briquettes has it's own lows. The company has to contend with the rainy season, since wet saw dust cannot be converted to briquettes. Again, the rising cost of transportation, occasioned by the recent hike in the prices of petroleum products, has meant higher cost of the raw material and production.

Says Echegile, "Before now, we were buying dry saw dust at N2.20 per kilogramme. But because of increase in the prices of petroleum products, and the attendant rise in the cost of transportation, it has gone up to N3.50 per kilogramme today. But the raw material is readily available and we have no problem with supplies."
"Indeed, there are times when the company has more supplies than it can handle at a particular in time. We have more than enough raw material, and even if you put five briquette plants in the Lagos area, you still will have more than enough raw material to service them."
Echegile's briquettes range high on the quality scale. "From the reports we got from our customers in Europe, ours was way ahead of the others because of the quality of wood that we have and use here in Nigeria. Secondly, the heat value of the kind of wood we have in Nigeria is much higher than what you have in other places, where they have mainly softwoods. The type of wood, even in the sawdust, determines the heat value of the briquette, so hardwood is better than softwood."
Surprisingly, Echegile veered into the production of briquettes by chance. He says, "Actually, we have been in the wood and related products for quite some time. We started with a wood factory in Okada, Edo State, where we exported wood flooring items to China and Taiwan.

"On one of our visits to Taiwan in 1997, we found out that sawdust could be converted to an alternative energy source, called briquette, which they were exporting. And since we had a technical relationship with them, we pleaded and they gave us the necessary technology for briquette production. Since then, we have been in the business of converting sawdust into briquettes for export and domestic and industrial heating.

He insists that briquettes are much cheaper and easier to use them kerosene or even cooking gas. "A pack of 10kg briquettes which sells for a token of N300 can be used by a family of four for one month."
The initial export drive had not made it necessary to either look inward by exploring the local market or at least bringing the product to majority of those that could use it in the country. But now without the local export grant the potentials of the local market are being explored.

Echegile has only one regret; that genuine exporters like him are now suffering as a result of the alleged sharp practices in the allocation of the grant. He says, "The frequent policy changes is not good for planning. For instance, last year we ordered for bigger machines, hoping to increase our export market and went ahead to enter into some contracts along that line.

"But today, we cannot export. The machines arrived not quite long ago and have been lying idle in our premises. We refused to install them because we cannot export any longer. So if policies are made, I think there should be a fixed time for the policy to mature and take root, rather than terminating or suspending such policies midway, after genuine investors must have borrowed money to expand, with the hope that the policies would be allowed to mature."
Apart from lack of continuity in policies, another major problem the company has had to cope with is erratic and irregular power supply from the national grid. "We suffer irregular power supply in Ota and have had to run our generators, which were installed as standby or backup power source, almost 24 hours, on daily basis sometimes for up to one month or more. And considering the cost of petrol and diesel, this is not economical at all, but we have no choice, unless we want to stop production, Echegile moans.

But there is hope. "The moment we solve the problem of power supply, because these new machines are from Europe and much more rugged, unlike the former one from China which was prone to occasional break downs, we will be able to upgrade our production capacity, now that we know that the market is there."
To safeguard its operations, the company is looking at local fabrication of some spare parts.

The company participated in the 7th RMRDC Techno-Expo 2004 held in Abuja between October 12 and 15 and organised by the Raw Materials Research and Development Council (RMRDC) of the Federal Ministry of Science and Technology, at the end of which it won a merit award for outstanding contribution to the development and utilisation of Nigeria's raw materials.

Briquettes are suitable for domestic/household cooking, combustion of boilers, bakeries, iron and steel pot making. It is made from sawdust without additives, does not spark-when burning and burns with very low smoke emission.

It lights quickly with minimum ash content and leaves no dirt like charcoal. Briquette, unlike charcoal and dry wood, has between 4,500 and 6,000 calorie per gram (col/g), with moisture content of six per cent.

Celina Industries, according to Echegile, produces two grades of briquette - carbonised and uncarbonised. The former is lighter and has almost reduced impurities like ash, with increased carbon content. Briquette, since made from hardwood, is also known to repel mosquitoes.

The factory presently produces between 400 and 500 metric tonnes of briquettes per month. Ota is a vantage site for the industry because the town hosts the three biggest wood factories in the country.

It is packaged in a 10kg pack, and while the uncarbonised goes for N300, the carbonised cost N10, 000. At the moment, it has three major distributors in the country. The products go as far as Maiduguri, Kano and Aba, with some of the finding their way into Chad Republic.

To set up such an industry, Echegile says all your need is the necessary capital, which he puts at "between $800,000 and $1 million today for the part and equipment and the bank support at a very good interest rate, rent or buy a warehouse and source the raw material.

Certainly, you cannot run such a factory on 30 or 35 per cent interest rate loan.

While not condemning the ritual of tree planting every year, Echegile says "you can plant trees but if people do not have alternatives to firewood, especially where they cannot afford kerosene, all will be waste, because the rural poor must cook for their families."
Some bakers have turned to the company every Friday to buy its off-cuts for their ovens and have found it more convenient and cheaper.

"Ten packs of briquette, which is 70kg will back up to 10 bags of flour. So they now have a standard energy requirement and do not need to be at the bakery everyday.

"All such a baker needs to do is to issue 10 packs of briquettes for 10 bags of flour and leaves."
The carbonised, he says, "comes out black like charcoal, is without smoke and is very suitable for barbecues. It can also be used for home heating during cold weather, but most people we export it to in Europe use it for barbecue.

"The dry saw dust is processed through the hopper to the fast drier, down to the machine where the extrusion takes place.

If it is wet, the heat cannot extract the wax; instead it will extract water, which is not a binding agent."
43-year-old Echegile is from Owa-Alero, in Delta State. His academic and practical background is in Actuarial Science and Finance/Management.

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'Entrepreneurship Is Like Giving Birth To A Baby, Nurturing It...'

The Guardian (Online version) 04-09-2004

EVEN though she thought of making a soap that would be tender on young people's hands due to her unpleasant experience with soda soap as a youth, Mrs. Maria Eka had always wanted to be a corporate person. Setting up a small-scale industry was not on the cards.

But having worked in the Federal Civil Service between 1971 and 1985 where she rose to the position of Assistant Director, and later the banking industry from where she quit paid employment in 1995, Mrs. Eka finally settled for her one-time dream by chance. An advertisement in the newspaper was all that was needed to take her back to it.

And today, the Managing Director of Mainspring Ventures, a Lagos-based outfit that produces Spring soap, after undergoing a training at the Federal Institute of Industrial Research, Oshodi (FIIRO), Lagos is awaiting the approval/certification of the National Agency for Food and Drug Administration and Control (NAFDAC) to enable her go full throttle after a period of successful test-run and market-sampling.She spoke with GODWIN IJEDIOGOR.

"I DID not originally think I wanted to start a business. I attended Queen's College, Lagos and the kind of training they gave us was not commercial-oriented, but to become refined and educated women generally. When I finished from the Ahmadu Bello University, Zaria where I studied Sociology, my dream was to join the Foreign Service.

"But my uncle refused because he felt that I may not get married early if I did. He wanted me to get married after working for a while. That was the thinking in those days. So I took up a job in the Federal Civil Service. I always wanted to be a corporate person, not to start a business.

"When I left the civil service, I joined a bank - Centre Point Merchant Bank, now defunct, but on leaving the bank in 1995, I suddenly one day saw an advertisement in a newspaper that FIIRO was training people to make soap and other things. I thought it might be a good idea to do something for people to clean with. I remember when I was a little girl that we used to wash with a local soap called soda in my house. It used to bruise my hands and so my father exempted me from washing with it.

"I always thought of making a better soap that will be gentle on the hands of little girls one day. So when I read the advertisement, I felt that it was an opportunity to learn soap-making and to realise this my dream."

So she went for the training at FIIRO and on finishing, wanted to try her hands on the business almost immediately, no matter at what scale. She later set up a small factory which has now grown to a point of seeking NAFDAC's registration.She was initially afraid of putting all her money into the business even though it was dear to her and she wanted it to succeed.

And although what she had was not enough to see her dream realised, she didn't want to borrow for her to expand the business.

"So what I did was to start very small. First in my guard's room because at that time we were not having a mai-guard. I just moved a few equipment into the place and started. Later, I took over our boys quarters when the guard's room became small for the business."

At another point in the transition and growth of the business, that too became choked up. So she once again moved the office/factory into the second flat (behind the bigger house) in their Ogudu, Lagos residence.She soon overgrew that too and now that she is in the process of getting registered by NAFDAC, she had to relocate once more to the government -owned Technology Business Incubation Centre (TBIC) in Agege area of Lagos. The alternative was to change some things in the house, including design, to suit that purpose. But she chose it for convenience, especially as the neighbours had started grumbling. Moreso, her husband, being an environmentalist, advised that she relocate to the estate.

"At the beginning, I was doing the whole thing by myself," she said, churning out one or two cartons per day. And the patronage was weaved around her friends and some neighbours who commended her efforts and product. "A few of my relations even use it to bath," she enthused.

Right now, Spring soap can be found in some local government areas in Lagos State, pending when she obtains certification/approval from NAFDAC. Thereafter, Mrs. Eka hopes to spread to other parts of the state and the country, and even into the West African sub-region. For according to her, "a few people from outside the country have seen and used it and they like it."

Her initial challenges may not be different from those of other entrepreneurs. "We had problems of good workers. Some would come today and go away suddenly and you had to start looking for new hands.The initial equipment that were locally fabricated for us, some didn't work and we went through some troubles. The machine was not cutting properly and sometimes, over 30 per cent came out as off- cuts. So we had the problem of trying to fabricate new ones or repair the defective ones.

"There was lack of necessary infrastructure too. Power supply was so erratic and unreliable at the time we started that we couldn't put some of the big equipment to use. We had to do some things manually. It was like you put soap in a mixer and suddenly power goes and you put on the stand-by generator and a problem occurs. By the time you fix this in a couple of minutes, the whole thing would have caked and you lose so much money.

"Another recurring problem was constant police harassment on the road for no good reason. Sometimes, out distribution vehicles also get stopped by local government revenue officials and the drivers harassed. You go into one local government and you pay. The moment you go into another, they expect you to also pay, and you keep paying depending on the number of local governments that you traverse," she bemoaned.

Overcoming these challenges, she explained, has been by the grace of God. She has also held on to her dream. "I have been very determined. It's like doing something that I had always wanted to do. It's like giving birth to a baby, nurturing it, no matter the odds. I initially tried to get on with my own finance, but after some time I got some support from my husband. Right now, I am also using a loan facility from my bank."

Sourcing the equipment and raw materials, she said,did not pose any headache. She got introduced to a local machine fabricator while undergoing training at FIIRO and bought from others outside. The main input, palm kernel oil, is also sourced locally from two or three companies around for some years now. "Palm kernel oil is seasonal and unsteady. It gets scarce and expensive during the dry season. At the beginning of last year it sold for about N100, 000 per ton, but rose to about N160, 000 per ton later in the year. But the prices are a bit stable this year and it has not been as difficult sourcing for the materials as last year."

She believes this is because more people appear to be growing palm trees in Nigeria now than before.

Mrs. Eka started with about N250, 000 in 1995, which she considers small compared to the over N2.5m it will require to start on the same scale today.

Her pre-occupation now is geared toward obtaining NAFDAC certification and registration. Her vision from thence would be "that the company will grow to become a multinational, producing soap and other things. A company run efficiently; profitable and employing so many Nigerians."

As a mother of five adults, the last of whom is an undergraduate, Mrs. Eka has not found it difficult running the home and office together. Indeed, she has only the 'big baby,' her husband, to care for on full-time basis. But she admitted that it could be very hectic at times, especially as she does all her cooking herself. She counselled: "I believe that a woman should give a great amount of her time to her home; put as much as she is putting in her business into running her home.When everything is right in the home, then you will be able to do your business without any problems."

Even at that, she acknowledged that it would have been more hectic for her had the children been younger. She recalled: "When the children were younger and I was working in the banking sector and the civil service, it was obviously more hectic and tedious." She was, however lucky to have had her mother-in-law around to relieve her of some of the home duties and caring for the children.Again, she admitted that sometimes, the 'big baby' complains. To her, "it's expected and I try to explain and go round it by being extra nice to him."

For those entrepreneurs whose children are much younger, she advised: "Get a lot of help in running the home and try to spend whatever extra time you have with the children. And if you can, work near home when you are younger."

As for mentors or role models, none readily came to her mind although there are a lot of successful women that she admires. "I try to see how they have coped. I read motivational books a lot, to see how the great entrepreneurs and millionaires made it." She cannot place her hand on one person in particular with regards to her area of business.

Given another opportunity, would she take to manufacturing (entrepreneurship) against paid employment

After a short meditation and flashback, she answered: "Hmm, when I was younger, I thought the corporate world was better. In fact, I loved the corporate world so much and before I started manufacturing, I thought it was better. But now, I think I prefer the manufacturing world. The challenges are more and it's like you nurturing something to fruition. It's a thing of joy."
In her own field, being a woman could be an advantage when negotiating and marketing her products, especially in the open market. The traders, who are mostly women, see her as one of their own. It makes sales smoother as she is given fairer hearing. But it could be disadvantageous when bargaining with artisans for repairs and other things, as her experience has shown. Otherwise, it makes no difference.

And so, in Denmark, the farmers have organized themselves in various ways to solve the problems, which many farmers have in common. . "The farmers have economic interests in the market and have established cooperatives".