Honourable Idowu Osuolale Obasa, a chartered accountant and renowned entrepreneur, is the chairman, Biomedical, a pharmaceutical company that is 40 years old and getting stronger by the day. Obasa, who also served as chairman, Onigbongbo Local Council Development Area (LCDA), in Lagos State, shares the story of his life and passion, with BOLA BADMUS.
Sir, can you tell us about yourself; especially about your growing up?
My name is Idowu Obasa. I am a Nigerian; born in Zaria, but raised in Lagos. I attended then University of Ife, now Obafemi Awolowo University, to study Economics. I also attended University of Lagos for my MSc in Accounting and later became a chartered accountant.
In terms of work experience, first, I worked at PZ Industry. I also worked at Lagos State Polytechnic and Yaba College of Technology. And then I worked at KPMG/ Peat Marwick, Ani Ogunde and Co.
I was one of the founding members of Independent Communications Network Limited, publishers of The News magazine, Tempo, PM News and from there I became Chairman of Onigbongbo LCDA. I left the place and became a private businessman.
That means you went into politics. For how long were you in politics and what made you to quit?
I am sure you are talking of party related politics, because everybody is a political animal. If you like I would say I have been involved in politics since I was at the University of Ife, now Obafemi Awolowo University. So now you understand. But in terms of party membership and politicking, contesting for office and all that, I think I started that activity around 2001.
Which party did you join then?
At that time it was AD (Alliance for Democracy). I got elected into office in 2003 as chairman of Onigbongbo LCDA. I was at Onigbongbo between 2003 and 2011, which was a period of eight years. And soon after, I decided I don’t want to hold any public office any longer. I am still a member of APC, but I am a businessman basically.
Did you encounter any nasty experience that made you to decide against holding any public office?
No, no, no. You can’t combine politics with business. It’s because I’m doing a lot of things now.
Precisely what led you into going into pharmaceutical business?
Let me say if you will recall what I said earlier that I was formally trained as an accountant, and that I read Economics. The skills that have been taught to you prepared you for doing well in any business. That’s the first thing. Secondly, I am an entrepreneur and as an entrepreneur, I can do any business.
Though my skills as an accountant make it easier for me to be an entrepreneur, it is my passion that makes me an entrepreneur first and foremost. And because I am an entrepreneur, if you tell me that there is a legitimate business, and I weigh the options and the viability of the projections, and all that, I might decide to invest in it, okay. I could decide to be an investor and not participate in the running of the organisation. But when I do participate in the running of the organisation, then I am a full-scale entrepreneur. So I don’t see anything that stops anyone from being in any business, provided he knows what to do. But I think I am also better equipped to work in any business environment because I am an accountant. Honestly, this is because, at the end of the day, business is about the bottom line. Isn’t it? And if you have the kind of skills that you need as an accountant, you ought to know whether the choice makes sense. Don’t forget that an entrepreneur gathers resources together in order to achieve the goals of the organisation. So even if it is a carpentry or a furniture factory, you already know how to gather the human resources and non- human resources together, okay. Even if it is a hospital, you understand, at the end of the day, that most hospitals are businesses or is that not so? So you don’t want them to fail financially. You, as an entrepreneur backing that organisation, know that you need to get doctors to take care of the technical aspect of the business, nurses and other support staff. Your own entrepreneurship skills are being put to test at that point. Your accounting skills will also be put to test.
So it is quite possible, I think, for somebody like me, who has not just the training as an accountant and economist but also the passion, to venture into risky business. An entrepreneur never fears failure. He already knows that there are chances of failure. You don’t fear failure; but you rather prepare against it. I don’t really know why people would ask me ‘what are you, an accountant, doing with this business thing? The nature of the training makes it easy for us [accountants] to actually flow into any kind of business.
We have different business ventures in pharmaceutical industry. Why exactly did you go into this particular line?
You are referring to the manufacturing company called Biomedical of which I am the chairman and what we do is to manufacture medicines. Biomedical was founded 40 years ago as a very first indigenous company to produce infusion fluids; what you call drips.
Before then, drip infusions were being imported into Nigeria until Dr. Farouk Abdulazeez, a medical doctor, founded Biomedical and started producing drips. You know when somebody goes into the hospital, in most cases when they are administering drugs, the first set of things they put is the drip. It’s a very sensitive kind of product because the drip goes direct into your bloodstream. So, even the slightest contamination must be avoided. It is, therefore, heavily regulated.
Dr Abdulazeez ran the company, until we bought it from him in 2015, when he was retiring. And why did we buy it? We bought it because we are businessmen, and we were sure it has prospects. And we had been involved in another pharmaceutical venture prior to that time, which, however, did not have production facilities. It was dependent on other companies producing for it, which really touched into the profits we could have made. So seeing a company that has production facilities, it was easy for us to decide to buy it. All this while, it was producing intravenous fluid at that time. But we had a vision and we wanted to buy it and we bought it because we thought we could develop it into a much bigger pharmaceutical company and we are on the way to doing so because since we bought it, they have developed a syrup factory within the compound in Ilorin. We are on the way to developing a tablet factory. So we are extending it which was part of our plan. Our vision is to have a pharmaceutical company that is able to produce as many medicines as possible. So we are not limiting ourselves to just intravenous fluids; we are going into other things.
So basically we bought the factory because we are in business and I have always been very much interested in pharmaceutical production and pharmaceutical business generally. So this was an opportunity which I seized and it’s proven to be okay.
How has the journey been for Biomedical for the past 40 years, given the fact on ground that many of the manufacturing companies in Nigeria have shut down, even here in Ikeja, which was home to many in the past?
Okay, let me start from where you said many of the companies were gone. You are quite right that the economic environment is very hostile. Government is not living up to its responsibilities in terms of supporting the manufacturing sector. We must realise that most manufacturing organisations in Nigeria depend on imports. Most of them import the equipment they use; they import the raw materials they will use and sometimes, alas, they import the expertise. So it is an economy that is so heavily dependent on import and government is unable to even assist the importation in a manner that will make it easy to deliver at affordable rate. Government has not been very supportive in this regard and this is actually at the risk of business failure that you refer to.
Going by all this, by the time you are through with your product, people would not be able to afford the price, because there is no money in the economy. So people cannot even afford to buy what you have produced. Worst still, you find out that some imported finished products come in cheaper than the ones you have produced. It is so horrible that when you import finished products from abroad, by the time you compute the total cost of importation, it is actually lower than the cost of producing the product here.
We had that experience. Previously, we were actually producing from start to finish from our premises in Ilorin- the pouches, the water, the sterilization- but we discovered that if we import the pouches, it is cheaper for us than to produce them here, so we started importing. The government has totally lost the idea of how to manage the foreign exchange situation. They’ve lost it totally and every manufacturer would suffer for that. Every day we find all sorts of announcements, new rules and regulations coming up and somersaulting again. It is so chaotic and we are expected to operate in that environment. So you are quite correct to say that companies are dying every day as a result of the very unhealthy economic situation we’ve found ourselves in.
But with our own experience, how have we been able to cope with the whole situation? Before we took over the company, there were a few experiences the company ran into, mostly of financial nature because they always need a lot of money and all that. But since we took over, at least, first we introduced a number of measures and a number of people. We have been able to weather the storm to the point where, as I told you, we just finished our syrup factory, and we are turning out syrups now. We have 22 syrups in the market produced by us. We are already thinking of the tablet factory to expand our portfolio. That is progress.
And I think another indication that we’ve been able to stabilise in spite of all the odds is that a few years after we took over, we took over in 2015, and this is 2021, which is six years ago, Bank of Industry, about two years ago, walked into our premises by themselves. They said the bank wanted to help the manufacturing sector and we are one of the players in the sector. And they walked in and asked if we wanted money. Since we had dreams, of course, we wanted money, and they said we should put up a proposal. We did and they gave us N498million as loan. We built our syrup factory; we imported the equipment and everything and today we are producing syrups. We’ve paid back more than half of the loan.
As I was coming into this place, I saw a different name tag, Lotto or so. Are you into other businesses apart from Biomedical?
Biomedical was bought over by a group of companies, among which is the Lotto company. We are involved in other businesses. We are involved in Lotto; we are involved in sports betting; we are involved in massive construction and we do construction.
This entrepreneurship skill you talked about, is it inborn, or is it that you started nursing the dream when you were growing up?
To be an entrepreneur? I don’t know if I can answer that question correctly. I don’t believe people are born with the thing like that. I studied Economics; I became an accountant. I have worked in private companies before and I have passion for doing business, putting resources together. Those are things you garner at your own exposure, and at your training also as I said before. Those are combination of training in business, and others; those are the things they prepare you for.
Something must have led you to choose Accounting as a profession…
No. At the time we were entering the university, I just said I was interested in studying Economics. Look, if you want to know, I wanted to be a geologist, even when I was in secondary school, but I was not good in science subjects. So I got F9 in Physics. So it was clear I was never cut out to be a geologist because I got F9 in Physics. I didn’t even know what they were talking about, but I was able to pass Economics quite easily.
So I went to the university, into the Department of Economics. And the Department of Economics had a number of options that you could choose from. You could choose Money and Finance; you could choose Econometrics or Accounting courses and others like that. And I chose Accounting courses in addition to my Economics courses. Some people had Economics with Maths. So I did Economics with Accounting option. And it seems logical after graduation that I would pursue a career in Accounting. I even took an MSc in Accounting at the University of Lagos and became a chartered accountant.
All these things were already shaping my thinking; they were shaping the direction I could take. Now I could have worked as an accountant and I could have still been at Peat Marwick and all that and whatever, but I was a little bit too restless or whatever. But I am a kind of person that believes that there is always something that you can do, that you can always be in a position where you can try to do something. There is nothing special about that. You don’t have to be born with that. Maybe it is due to your training and your experiences in life and all that. It’s nothing special at all.
Your growing up, how was it like? Did you have someone who really influenced you?
There was nothing spectacular about my growing up. But you know people talked about their parents in very strong terms and in that regard I would say I was heavily influenced by my mother. My mother, Felicia Obasa, heavily influenced me. She was a trader and I learnt a lot from her; let me just put it that way. I learnt quite a lot from her about business, about risk taking. She was the one that first got me interested in real estate and I think my involvement in real estate today is because of what she taught me. And my involvement, from the business point of view, is a bit substantial. Let’s put it that way.
Now where are you taking Biomedical to? Are you taking it beyond the shores of Nigeria?
Good, for the very reason that Nigeria has a very large market, it’s easier for us to think about first to try to satisfy that market, because it costs some money to think about exporting the products. There is nothing peculiar about exporting, but we haven’t even satisfied the Nigerian market. People make payment in advance to buy our infusion. That is the reality now. Talking about exportation, water is heavy and it’s not easy to carry it long distances.
How has the competition in the business been, considering some other big players in the industry?
We have just about seven producers of infusions in Nigeria, okay. And because of the relative scarcity of the product, everybody just produces. We are not worried about the competition. Our focus is on quality. Our own infusions are uniquely designed in such a way that contamination is impossible because of the double edges that they have. So our pouches are very unique. It is not just that our quality assurance process is the most important thing in our organisation; we have zero- tolerance for deviation from quality. This is because the medicine itself goes directly into the bloodstream. So we are very careful [about the quality of our products]. So we just feel let everybody bring the best in whatever they are doing. We are going to continue to maintain that level of quality, that standard. We are not a very big factory, but there is still the need for improvement. If we have more money, we will expand our factory and produce more. But for now, we are not a very big factory, but the little that we are doing, we are trying to make sure that there is no complaint of any kind about that. We are quite comfortable with that.
Do you have problem with people who might want to copy or fake your product?
Very difficult. In infusion, very difficult. This is because to set up an infusion factory is not a child’s play. By the time you have an infusion factory, why do you want to counterfeit somebody’s product? Produce your own. By the time you set up infusion factory, there is demand; there is no need to counterfeit anybody’s product. There is no need.
COVID-19 is ravaging the world right now and Nigeria is not spared. The Lagos State governor, Babajide Sanwo-Olu disclosed only yesterday that the country just received a batch of Moderna vaccines. All these things are coming from abroad. Does your company or any other in Nigeria look forward to producing them here?
That question has been asked us because it is believed that we have a very strong research and development section. Vaccine production has a lot of requirements. I doubt if there is a Nigerian company that can meet them at this moment.
Why is that?
Number one, the laboratory requirements are so much that it is difficult to just say you want to start producing. You know for different kinds of medicines, there are different grades of environmental requirements and equipment and things like that. So there are still things that cannot be produced in Nigeria, either because the equipment you need to put together are too costly or some other things.
China doesn’t even produce vaccines now and countries that are even more developed than Nigeria are not producing vaccines, because they are yet to meet the standards. So for us to claim that we want to produce vaccines at this time, even when we do not have the capability, we need to be realistic.
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