Why local businesses need government support to compete – Oshinyemi
In this interview with NIKE POPOOLA, the Chief Executive Officer of a local company with presence in some African countries, Topgy Systems and Management Consultants, Mr. Tokunbo Oshinyemi, speaks on the prospects and challenges of the fixed asset management industry in Nigeria
How? ‘Or’ What developed is the fixed asset management industry in the country?
Today, I can say with confidence that the fixed asset management industry is fully developed, but there is still a long way to go. When we launched the automated method of fixed asset management in Nigeria two decades ago, there were only a small number of consultants doing similar business in Nigeria. They used to manage fixed assets for their clients until our company came up with the new innovation of electronic fixed asset management. But today we have thousands of consultants doing similar business. However, we remain the largest and most important company in Nigeria.
Is the business capital intensive?
The fixed asset management business is not capital intensive, but it is more complex to execute than many consultants realize. A project can take months to complete because there is a lot of validation to do. For example, when performing a verification exercise, you need your client to review your reports and certify that they are correct before you can begin the tagging exercise. Also, a reconciliation exercise can take so many weeks before the reconciliation report can be accepted by the clients, as the asset registers or registers of most organizations constitute the bulk of the assets and it will only take a basic professional to manage them. That’s why we have many failed projects across the country; many consultants abandoned capital projects, leaving them unfinished.
How easy is it for businesses to access capital for expansion in Nigeria?
It is actually difficult for many consulting companies to access capital to grow because we are not manufacturing or telecommunications companies that manufacture or supply goods to end users. We offer services, so it is more difficult for us to access capital, even to execute projects when we obtain it from our clients. Our experience with the financial institution on project financing is not at all encouraging.
The scarcity of Forex has deeply bitten the economy. How has this affected the industry?
This has had a negative impact on our industry as it normally takes months to access forex through the CBN SME window at commercial banks. Meanwhile, when you secure a project, your client expects you to immediately deploy resources to the site; we are therefore handicapped on many occasions.
How has the COVID-19 pandemic affected the fixed asset management industry?
We are among the hardest hit industries as our services require us to work at customer sites and most organizations have been working virtually from home since March 2020. So we have lost a lot of business and have been severely impacted by the pandemic .
How conducive is the business environment in Nigeria, compared to other countries where you have subsidiaries?
Each country has its particularity in terms of the advantages of doing business in each. Undoubtedly, Nigeria is a big market compared to other countries where we operate in Africa. However, the challenges of doing business in Nigeria are enormous. At the top of the list is the cost of energy supply which occupies most of our weekly expenses, double taxes, lack of access to funds to develop the business, among others.
What are the challenges you have encountered in the company since its creation?
The challenges are enormous. First, we must work vigorously to enable Nigerian markets to accept the technology. I remembered that most of the organizations we visited to showcase our services were still in love with our labeling solution (permanent indelible mark), but none were buying until we broke through with one. of the largest FMNG companies in Nigeria, then another top distillery company in Ota, followed by a multinational (one of the world’s leading breweries) based in Ikeja. Another challenge is sustainability, most organizations are ready to buy our fixed asset management solutions, but their fear is where Topgy would be in the coming years to support the solutions offered to them. I remember our experience with a multinational manufacturing company whose head office is based in Ilupeju and the factory in Agbara. The CFO specifically said “what is the assurance that if their organization buys our solution, we will still be there to support them after a few years?”. I told him we would stay in business as long as his business was in business. He was very impressed with my response and confident and he approved of the project. The good news is that we have been supporting the multinational for 17 years. So, the challenges are many but we are able to overcome them through our business strategies, perseverance and focus, sticking to our vision and mission to be the leader in fixed asset management in Africa.
Many companies have succeeded over the years. What made you move forward?
It will interest you to know that we started our business in 2001 from my uncle’s garage in Ojota, then in my house where I converted my living room into an office before we could afford to rent office space in 2005 in Ikeja . I am not an average Nigerian businessman who will start living a flamboyant lifestyle at the expense of business. We are very cautious and we don’t follow the crowd, we consistently pursue our mission and vision to be the leading fixed asset management company in Nigeria and we were able to achieve our goal. The next goal we have set ourselves is to be the leading fixed asset management company in Africa, which we have also managed to achieve. We are present in about 12 African countries to date. Topgy became an international company in 2008 when one of the multinationals we have been working for in Nigeria since 2002 recommended our services to another multinational in Ghana and we moved to Ghana to manage the project which was successfully completed. Then we decided to expand to Ghana and as of today we are the leading fixed asset management company in Ghana. So what has kept us going over the years is that Topgy makes sure that all of our team members (senior and junior staff) are part of the business so that there is a job team and that everyone has a sense of belonging and that the end result is the added value benefits our customers receive year after year.
Many companies are now doing the same as you. How have you managed to maintain a competitive edge in the industry?
At Topgy, we appreciate and cherish all of our clients, whether small or large organizations, we give all our projects the same professionalism and attention they deserve. We are not satisfied until our customers are satisfied and get value for the investment made on the projects entrusted to us. And that’s why many of our customers have been with us for so many years now, some for five years, some for 10 years, and we have customers who have been with us for over 15 years. Our advantage in Topgy is therefore that we have constantly improved our services and solutions. As of now, we are the first to develop locally made fixed asset management software in Nigeria which many reputable companies are using today. We first started with a desktop application in 2009, then two years ago we launched our mobile applications, and in October 2021, we launched our web application in the Nigerian market. Our software complies with IFRS and IPSAS standards. They support amortization, depreciation, valuation, compounding, disposal, financial asset audit, electronic audit, asset check-in/out, asset tracking and tracing barcodes/QRcodes. Beyond that, we have extended our services to spare parts audit, inventory audit, liquid fuel audit, valuation exercise, asset certification, among others.
What is Topgy’s plan after its two decades of existence?
Our plans are to continue to add value to our customers, to develop more solutions that will help them better manage their fixed assets knowing with certainty that the fixed asset issue is a global issue and once the issue is resolved, our customers will be able to focus on their core services. This will make them more efficient and productive which will allow them to grow their business to a much greater height. We also plan to continue to expand our business to other African countries and be a global player in the industry as a leading fixed asset management company.
What can the government do to help Nigerian businesses be more competitive under the African Continental Free Trade Agreement?
They should create an environment conducive to business prosperity, especially manufacturing enterprises, otherwise we will not be able to compete favorably. This will make Nigeria a dumping ground for all kinds of goods.
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