Infrastructure, power major challenges of FMCGs – Adefila
By Ibidunni Banjoko
Dayo Adefila, Head of Digital Strategy, PZ Cussons (Africa region), has named infrastructure and power supply as the major challenges dogging Fast Moving Consumer Goods (FMCG) companies in Nigeria.
Making a presentation at the Spark Podseries, a bi-monthly podseries organised by Olukunle Iyanda who is also the host, on the theme “Brand Development in a Highly Volatile Business Environment”, Adefila mentioned that infrastructure deficit remains a major challenge, particularly logistics.
“Logistics system operationality in developing countries is not yet what it should be. You find out that getting those goods to your distributors, wholesalers and retailers when you are done with the factory has a lot of challenges.
“But with challenges comes opportunities. At least in the last two to three years, we can see the upsurge of companies that have tried to address B2B and B2C logistics challenges, and the demand for it just continues to grow,” he said.
“We also have power supply as a major challenge. Though there has been improvement in some aspects of this, it’s still quite a major factor when you are doing your cost of production,” he added.
Speaking further, Adefila noted that as the COVID-19 pandemic accelerated many challenges, it has also brought on a lot of positives.
“If you look at the end-to-end where you get your raw materials from, at what cost, and the impact of that on your overall operations in terms of pricing and profitability, it’s been very challenging. COVID brought up so many challenges with the supply chain, and you also have scarcity of local content from a raw materials point of view.
“In the FMCG sector for instance, we rely on certain raw materials, but that has been very difficult because for the local guys you either don’t have enough of them in developing markets. And then you have on the external side the importation option that comes with delays and is also a lot more expensive,” he said.
Adefila, however, cited digital transformation as one of the opportunities that has really shown up in the course of the pandemic as organisations are using digital technology to accelerate their businesses.
“One of the aspects of the digital transformation is that I see businesses leveraging and continuing to leverage opportunities under the very popular word Fintech.
“When you hear the word Fintech, a lot comes to mind. For instance, recently, Flutterwave had its series E fundraising of about $2.5 million and the company is now valued at $3 billion.
“I think you find out that many businesses actually will be what you call fintech businesses. To help reduce a lot of costs, it will help them to be more efficient, more transparent and also eventually more profitable,” he concluded.
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