Isaac Akomolafe, CEO of Everything Plastics
We profile Isaac Akomolafe, CEO of Everything Plastics, a wholesale/retail enterprise for plastic furniture and household items based in Lagos. It is a family business established in 1983 that was rebranded online in 2008 and has a social media presence; it is the leading plastics SME online. It is a leading enterprise in the distribution of plastic wares and has supplied local development councils, churches, and schools. It employs over 10 staff, with a monthly revenue base between ₦500,000 to ₦1 million and has worked with major plastics companies like Dana, Monoplast, Sun Group and others.
Despite being born into a family in the plastics business, Isaac says his passion for the business began when he was around 12 years old when he would visit the factory, and he is happy running it. He notes that doing business as an SME in Nigeria is a bittersweet experience, with challenges in financing, transportation, unfriendly government policies and difficulty procuring raw materials. The raw materials for producing plastics, such as polyethene and masterbatch, are not all available and cannot be manufactured in Nigeria, and some of the locally sourced materials are of lower quality. Importation of raw materials from countries like China, India and Indonesia is affected by fluctuations in foreign exchange and from the recent increase in VAT to 7.5%. It is encouraging however that plastics importation in Nigeria has greatly reduced, with about 90% of plastic furniture and household items used in Nigeria made in the country.
The Covid19 pandemic has certainly affected the plastics business Isaac notes, as the restrictions on travel and imports have increased prices of raw materials, and has provided an avenue for manufacturers to hike prices for materials that they already have in stock. The business has had to improvise with locally sourced materials such as damaged plastic that is shredded and recycled for reuse. He says that the best way to avoid the issues brought on by the pandemic is to industrialise the plastics sector by bringing in companies to boost production and to introduce tax rebates on production of raw materials. He also emphasizes that the Nigerian government can assist the sector by reducing tax and providing subsidies on imported materials to improve access to manufacturers.
On the issue of plastic waste in Lagos State and how the government has been involved in the fight to clean up the city, Isaac commends the government’s efforts to work together with plastics companies to manage the problem by providing facilities for separating types of waste. These allow plastics to be recycled and provide an avenue for wealth creation and promote manufacturing in the country.
Isaac advises intending plastics entrepreneurs to start small, with one or two special, fast-moving items in high demand that will help them break even, such as containers for zobo and tiger nut milk, chemical kegs for holding insecticide, disposable plates and spoons for restaurant businesses (especially with current restrictions that only allow for take-away meals) and handwashing taps and buckets. An investment between ₦500,000 – ₦1 million is sufficient for a small-scale start into the business. The plastics business, Isaac says, is highly lucrative and can give 50% profit within 5-10 years, but an intending entrepreneur must be patient and build a solid customer base or secure a high-volume client such as a government agency or a restaurant chain.
He advises those looking to start a small business not to use all their capital and to keep some in reserve, to keep reinvesting profit into business instead of spending it in the initial years of operation, and to avoid borrowing to start an enterprise but to instead save towards a well-planned business idea. He also advises young entrepreneurs to use social media for not just entertainment but also to find opportunities from banks and the government that give single-digit, long-term loans and grants to boost small businesses, citing initiatives such as Lagos State Empowerment Trust Fund (from which he received a single-digit interest ₦500,000 loan when starting out) and initiatives from Access (Diamond) Bank for women, United Bank of Africa, and First Bank. He encourages government to continue giving such assistance and to make them localised and advertised with jingles to make more people aware of them.
The African SMEs Stories series is brought to you by Support4AfricanSMEs in partnership with BusinessDay Nigeria hosted weekly on Instagram by Linda Ochugba. Interview edited by Oluchi Buchi-Njere.