Tracy Kim Horn: Welcome to The Disruptive Voice. I'm Tracy Kim Horn. Mi goreng is a spicy fried noodle dish popular in Indonesia, Malaysia, and Singapore. Available everywhere from street vendors to sit down restaurants, it's a lot like pizza in the US. Indomie Noodles has brought this southeast Asian staple to 80 countries around the world with its instant food product.

To make their version, it takes only as long as it takes you to boil a pot of water and open a packet of seasoning. Noodles, however, are not a traditional part of the Nigerian diet. So when Indomie's product debuted in Nigeria, it took a number of years for the market to adapt and welcome them. With me today is Deepak Singhal, CEO of Tolaram Africa, importer originally, and now manufacturer of Indomie noodles in Nigeria and Efosa Ojomo, senior researcher at the Forum for Growth and Innovation.

Thank you so much for being here with me today.

Efosa Ojomo: Thank you, Tracy. It's good to be here.

Tracy Kim Horn: Deepak, I was hoping you could just start off by telling our listeners who aren't as familiar with the history of Tolaram and the Indonesian noodles in Nigeria, the history of how an instant noodle product, something that's very much a staple of the East Asian cuisine, or even the Southeast Asian cuisine diet. How did that, how did this product end up in a country as far away and as foreign to noodles as Nigeria?

Efosa Ojomo: So the group MD of Africa, Haresh Aswani, he grew up in Indonesia eating Indomie. So he thought that country being demographically similar to a Nigeria being similar to Indonesia, that this product should work in Nigeria too.

And because of other factors like urbanization in Nigeria, a young population... so we thought that we should... that's when we started importing in the mean to Indonesia, into Nigeria from Indonesia. And that's the story began.

Tracy Kim Horn: So you began by importing the noodles, but as I remember the history that wasn't actually producing the numbers that you were, you were hoping it to.

Efosa Ojomo: Yes, it was a very, it was a very difficult task. Initially. People didn't know the product. People -- some of them -- thought that we were feeding them worms instead of food. It was a tough task and until 1996, it crawled very slowly. And in '96 we decided to put up a small factory in Lagos.

Tracy Kim Horn: So you started a factory where you were manufacturing the noodle product then is that right? And did that change things? Was having employed Nigerians -- did that change their perception of the product?

Efosa Ojomo: Not, not in terms of that, but we had a longterm view and the volumes were justifying to put one line, at least. So that's when we started with a small line, in Nigeria, because we always had the view of putting localization. Locally manufacturing the product.

Tracy Kim Horn: We talk here at the Forum for Growth and Innovation, about a theory that we call "good money, bad money" where we talk about how important it is to be patient for growth, but impatient for profit.

Is this something that resonates with you and it was this a philosophy of the Tolaram group? How did you stay patient through this time of growth?

Efosa Ojomo: Well, it wasn't easy. I would say in the hindsight it looks easy, but in 1996/97, we were contemplating whether we should continue with the product or not.

With the continue with the business or not, but the belief of the group MD in Africa, he really thought that this product should do well. So he fought through the Board to keep it alive.

Tracy Kim Horn: And can you tell us how did, how does your history intersect with Tolaram? When did you join the group and how did you get involved with the instant noodle product?

Efosa Ojomo: I joined Tolaram in '99 fresh from India. I was working with Unilever India before I joined Tolaram and I can say that coincidentally, that's the time when the Indomie started taking off in Nigeria too. We started making more than breakeven. So from 2000 -- '99/2000 till 2014, we had a CAG out of 36%.

Tracy Kim Horn: So like you said, in hindsight, it's really easy to be patient and to see how this story was going to work out. But when I try to think to what it might've been like for you, you're put in this company, that's newly profitable, took a long time to get to that point. Were you worried? Did anything scare you that, you know, "Oh, you know, we're growing, but then maybe next year we'll slow."

Efosa Ojomo: Oh no. I think the best part was we were a private company and we were not public. And shareholders had had a lot of patience because they believed in the product. So I guess in other parts of the businesses were doing good. So we didn't have that much pressure.

Tracy Kim Horn: You talk about a belief in the product, but again, that's something that's easy to say in hindsight. What does that mean when you're, when you're on the ground day to day, and you're just looking at numbers that are taking a long time to grow.

Efosa Ojomo: You have to understand that as a philosophy, we look at pioneering products in Africa and also look at that -- we always thought that providing a hot meal to a Nigerian at 18 cents was pretty much the success formula. The affordability and availability, and acceptability. Those are the three parameters that we worked on and we saw as we saw that the affordability was already--we made it affordable because of local production and we made it available because of our network--distribution network we had.

And it started becoming acceptable over a period of time.

Tracy Kim Horn: Let's dig into those three A's a little bit. Um, when you talk about affordability and that you did the local production, can you, can you tell us about, what was that decision like? Because sure it maybe brought down your cost, but that took a long time for, for that type of investment to provide returns.

Efosa Ojomo: Yes, but, you see if you are in the market, I mean -- if you believe in the product and you want to be in the market for a long time, it's always good to localize yourself. And because of that, we have 92% of the ingredients today are manufactured in Nigeria for endo means to noodles.

Tracy Kim Horn: And these ingredients are these ingredients that have historically been available in Nigeria, or did you have to teach the Nigerians how to create, how to grow?

Efosa Ojomo: No industry-- industrially we are there, but like wheat is not grown in Nigeria, but it's imported from US. A lot of it. But there are flour mills in Nigeria, which do, the conversions but, other vegetables, other products like Chilean all are locally grown now.

Efosa Ojomo: Deepak, I have, you know, one or two questions for you. Cause you talk about going in and doing things locally in Nigeria. My research here has actually had me travel back to Nigeria. I'm originally from Nigeria and I've asked a lot of business practitioners, business executives, you know, What are some tough things that, that kind of hold you back and make business difficult.

And they mentioned infrastructure and talent. And so I can understand importing a product into Nigeria and you don't have to deal with a lot of those things per se, but you guys do 92% of your product in the country. How have you managed to do that? And still remain a profitable company?

Efosa Ojomo: Well, of course it's -- unlike other parts of the world you have, if you want to control your destiny in Africa, you have to do your backward integration to control your entire supply chain as much as possible. Infrastructure are challenges.

It's challenging in most of the developing world, I would say. We generate our own electricity in our 13 plants that we run in different locations all over the country and with different types of foods. So you got to learn a lot about it, about generating power, even if you're doing a food company.

That should not hinder people from doing it because it's still profitable to be doing it. In terms of infrastructure, even road networks are not, I mean, I know railways road network is only one which you rely on and we own our own fleet of 31,700 trucks and trailers, different sizes.

To supply our own products next nationally. And of course there are no retail outlets at the big Walmart channel are not there yet. So you do distribution to 600,000 retail points, which are, which can be as small as a tabletop to a to a moment pop store. So we, we have done that infrastructure over a period of time.

And in terms of talent, yes. Most of the good talent they go abroad actually or are hunted by the oil companies and banks. So very few are left for the industries. So you have to--I know also workmanship wise it's not very good. So we have to train people even if you had them from the universities.

So we run our own schools. Small workshops for people to be trained.

Tracy Kim Horn: When you talk about people being trained, are you looking at a younger workforce? Do you target a younger workforce?

Efosa Ojomo: Yes.

Tracy Kim Horn: Who comes there?

Efosa Ojomo: Young fresh graduates from the schools from engineering colleges or from MBA schools and from normal graduates.

Tracy Kim Horn: So you're taking university graduates, local university graduates, and then training them in the Tolaram way to help you with your business. And you're not just talking about line level, either then? We're not talking about factory workers here. You're talking about all levels of the organization.

Efosa Ojomo: Yes. We employ 8,500 Nigerians in different aspects of the business.

Efosa Ojomo: Just a quick one, because this is fascinating to me. You know, we're here right now at the Africa Business Conference here at Harvard. And, I've been to three of these and I hear time and time again: infrastructure, government, talent, corruption, all these issues.

And what I've just heard from you Deepak, is that you are running a business that sells a product that cost 18 cents. You've built multiple factories, provide your own power, struggle with the infrastructure, have a thousand plus, um, trucks and vehicles, and you are still able to make a profit.

Efosa Ojomo: Yes. Uh, that's true. And, uh, yeah, I would say that people who really complain about government corruption and all other people who look for contracts from the businesses, probably government contracts or not. But if you're doing an independent business, which is, which is for the people and not with the government, then you don't have to worry about the government actually. That way government is more facilitating in Nigeria.

Where they don't bother businesses much.

Efosa Ojomo: That's interesting. Cause I mean, that, that is actually news to me in the sense that you were saying, if you're building an industry in Nigeria, because you're providing jobs, creating opportunity and providing a service, the government is actually, helpful and facilitates your progress.

Efosa Ojomo: I would say .... they don't hinder you. They keep away from you and you keep away from them. But also there are-- there are good schemes by the government, like the pioneer status they give for industry, any new industry which comes up, they give five years of tax holidays. Wow. So things like that are there.

Efosa Ojomo: So if you had couple of things to say, to, let's say an investor or a manager of a fast moving consumer goods company who was thinking about Nigeria or Africa and is just like, "no, I can't do it. It's too much". Like what would you tell him?

Efosa Ojomo: I would say that look for a credible partner first. Yes. It's not easy to navigate without a partner, local partner. But there are many. And always look at the market as a long term. Don't look at exporting few containers there and here and there, and then getting away from it, but have a longterm plan and stick to it.

And I guess success will be there. We have proved that. And I would say that there is, I mean, you can't go wrong 180 million people. You can't go wrong.

Tracy Kim Horn: Deepak, you have achieved so much success in Nigeria with this noodle product. What's next? How does Tolaram grow from here in Nigeria or in Africa?

Efosa Ojomo: So, our aim is to be the most respected FMCG player in Africa over the next five years.

Tracy Kim Horn: And FMCG, for our listeners who aren't familiar with the industry?

Efosa Ojomo: Fast moving consumer goods company. So we, for that, we have plans to expand all across Africa, but we are choosing our countries with all the data.

And we want to be as I said number one in Africa. We have added a lot of products to our portfolio after Indomie in Nigeria. Like vegetable oil, pasta, flour, and also, actually bleach product called Hypo, which we made successful in three years and own 95% of the market share now. And also we have now moved to Ghana.

We've also offices in Ivory Coast. Been in DRC and we are looking at other countries.

Tracy Kim Horn: So I'm not completely up to date on the exact rankings of those countries on the ease of doing business index. But I imagine those are not very high on the list, probably similar to where Nigeria either sits today or sat when you first entered the market.

You talk about being private and being able to do more because of that, but even still, is that not a scary thing?

Efosa Ojomo: Not really, as I said, it's, if it's easy, then you don't make much money. Right? So it has to be tough. That's when you can pioneer and then others can take advantage of it.

So we are learning our ropes through that those markets. And we guessed as long as there are mouths to feed, we'll be there.

Tracy Kim Horn: So when you're not even on the continent, it makes sense when you talk about backwards integration to building your own factories there, and that's the strategy of localization, is this one that you think will continue to be important as you moved in other countries on the continent?

Or do you think now that you have Nigeria as your base, it's possible to achieve success by using Nigeria as your, as your home base?

Efosa Ojomo: Africa is very huge continent with 50 plus countries and you can't reach everywhere from Nigeria, but there are clusters of business units, which have been formed in terms of countries coming together called ECOWAS, COMESA, SADC all these regions where the free flow of goods is allowed.

So, we would attack, we would, we would choose, based on these structures, where to put up our factories.

Tracy Kim Horn: Deepak in the research that Efosa has done he shared with me a quote that you said that Tolaram's values are to only introduce products that will make a difference.

Is that something that's still important to the company today?

Efosa Ojomo: Yes, it's very important to us. And that's why as whatever products I told you, we've introduced again, have been products which have made a significant impact in the life of people. For example, vegetable oil, uh, it is sold in the, in the open market in nylon bags, which can be easily adulterated.

We started selling first in pouches, first time in Africa, so that people can have a factory sealed product in there, which is approved by NAFDAC. We also started bleach, as I told you, which is the penetration in house penetration of bleach in Nigeria was around three to 4%. And we started four years ago now, and now the penetration is around 28 to 29% because we made it affordable at a 10 naira to start with.

Efosa Ojomo: I think it's fascinating as a 5 cents -- that's about 5 cents. Right. And with the way the naira is going, that might be 3 cents soon! The naira is Nigeria's currency. Now, now it's fascinating as I hear you talk Deepak because a lot of what my research is focused on is, other countries who have attained prosperity and what you're explaining is no different than what they've done. Um, for instance, I, I I've studied a little bit about Taiwan and, and how after World War II, they lost a Japan, which is their huge trading partner. And entrepreneurs and investors and innovators in the country really just focused on this local demand.

Now they didn't have Nigeria's population. There were only about 8 million people. But they focused on local demand and started making flour, cement, bicycles and did agriculture. And all of a sudden they were able to gain enough money and start exporting and get foreign currency to really build a lot of other, industries.

And to your point, and about you guys setting up your own school, you know, a way or you're training that's what a lot of the companies did because they didn't have this talent. And so it's fascinating as I hear you talk about how your company, really represents what. Most companies, who are operating in Nigeria and other parts of Africa should be doing not just to be profitable, but for the prosperity of the country.

Which is a really interesting tale of, you know, what, what I've seen happen in the past and what is really happening today.

Efosa Ojomo: Yeah I mean you, and if you don't have any, you have to do it for your own sake too, because you need the talent to grow your business. Even if you're not looking at the prosperity of the country, but I'm saying it's good thing to do.

We do other CSR activities for the country where we give free limbs. We do, uh, the science labs for the children in the schools. We do free maternity wards for the women, childbearing mothers. So all those things we do as CSR for the society, but yes the talent, growth is important for the business sustainability in the longterm.

Tracy Kim Horn: Deepak. Thank you so much for being here today. I hope you enjoy your stay in Boston and your visit with the, Africa Business Conference. We apologize that the weather is not perhaps as hospitable as it might otherwise be, but, we hope you have a wonderful stay.

Efosa Ojomo: Thank you. Thank you very much.

Tracy Kim Horn: The Disruptive Voice is a production of the Forum for Growth and Innovation, a research project at the Harvard Business School guided by Professor Clay Christensen, the Kim B. Clark Professor of Business Administration.