Dr. Fidelis Ayebae has left his role as the Managing Director and Chief Executive Officer of Fidson Healthcare Plc after about 30 years at the company.
He has been replaced with Biola Adebayo, who has now been handed the baton to take the company to the next level with strategic leadership and a sense of responsibility.
Fidson Healthcare is set to invest $50 million over the next three years, leveraging equity and debt financing to drive both domestic scale and international expansion in pharmaceuticals.
In this interview with Naijaonpoint, Dr Ayebae says he has been inspired by his friend, Aliko Dangote, as he reveals what’s next for the pharmaceutical company.
Naijaonpoint: Back in 2018, you shared your journey of moving from the banking sector to the health sector. What inspired that career transition, and how did you navigate it?
Dr. Fidelis Ayebae: Thank you very much. Let me, first of all, thank Naijaonpoint for this privilege once again. You know, of all the financial publications in Nigeria, if we were to count between one and three, you are amongst them. And thank you for all that you do for the entire industry. God bless you, and God keep all of you alive.
Now, transiting from civil engineering, banking into what I am about to retire from was, if you ask me, a pure accident of life. If you asked me 30 years or 31 years ago, if I liked the pharmaceutical business, I didn’t even know what the pharmaceutical business was.
But a young man, who was an applicant then, and was looking for a job, brought the idea of pharmaceuticals. And I bought it, and the rest is history. So I think it’s something I enjoyed thoroughly.
The transition was very seamless. When you find something that you enjoy doing, or something that you are called to do, you see, most of these pastors say they are called, right? We know those who are called, and we know those who call themselves. So if you didn’t call yourself, and you were called to do it, the grace will be available. That is my story.
Naijaonpoint: Okay, so when you were called, how was the early stage like? I mean, this is an unfamiliar terrain for you. How was it easy for you to settle in?
Dr. Fidelis Ayebae: The early stage was a little easier, because the early stage was trading.
We were buying from multinationals and distributing their products. And we were also importing our own brands and selling our own brands. That is a little easy.
Trading is a very easy thing. It is what you buy, you sell, so long as there is a buyer. And if you understand the arithmetic, you put the markup that covers all your costs, plus your profit, and remain competitive, so long as there are buyers, it is easy.
But the challenge started when we went into manufacturing in 2002. In fact, from 1999, the challenge started because we were preparing to step into manufacturing, to buy a plant, to build it, to set it up in terms of equipment, and what have you. That was tough.
We just saw ourselves spending money, doing things, and nothing was coming back in return until the plant was completed. So beginning was easy, but manufacturing was the difficult part, and it is still the difficult part. It is the least profitable, but the most fulfilling of all.
Naijaonpoint: What would you consider your greatest achievement so far in this journey of almost three decades?
Naijaonpoint: What would you consider your greatest achievement so far in this journey of almost three decades?
Dr. Fidelis Ayebae: The greatest achievement is coming into an industry at the very bottom, and by the grace of God, becoming the number one in 27 years of being in that business. That is our greatest achievement.
And it is also that we have been able to meet the needs and expectations of Nigerians to cover their medicine needs to the extent that working capital and equity allow us to.
I saw how critical that aspect is during COVID. When the world was shut down, nobody could go anywhere, right? If we were not manufacturing locally, and we were still just an importing company. I think that even though I may not have realized what manufacturing did in that context, with the benefit of hindsight, seeing what we did at that time gives me a lot of fulfillment and joy.
Because before then, we were not manufacturing 24 hours. But as soon as COVID hit, and products were scarce, we had to start manufacturing 24 hours. And every single thing that we bought, we were able to sell. And that propelled us to the top of the industry. So for me, that is the most fulfilling aspect of what we do.
Naijaonpoint: Okay, can you give me a picture of what production and management were like during that COVID-19 period?
Dr. Fidelis Ayebae: You see, one of the greatest things that a company must build is a good governance structure. When you have a good governance structure, it helps you to build all the relevant pillars that you need to sustain the business and to grow the business strongly internally.
Our governance structure ensured that our supply chain was very strong. Because they supported our supply chain, they encouraged them, we funded them to stock raw materials, to stock packaging materials, for three months, four months, five months, even some six months. Because you are not sure when anything can happen in the world. And then there was a lockdown. And the supply chain goes awry because something happened, either because there was a war in the Middle East, or Iran blocked the Strait of Hormuz, and all that.
So that encouragement helped our supply chain to develop the muscle that was needed to sustain every aspect of the over 1,000 SKU of materials that they import daily. And so when COVID hit, we had sufficient goods in terms of raw and packaging materials for three or four months, or five months, and that itself was the leap that we needed. So throughout that period, the supply chain remained the backbone of what we were able to achieve.
The second thing was also the collaboration between manufacturers. That was when I also knew that you could compete, and at the same time collaborate. And so what we didn’t have, we borrowed from other people. What they didn’t have, they borrowed from us. And for some strange reason, even though we all needed those things we were giving away, we were happy to give them away because what those guys produce, we don’t produce. And what we produce, they don’t produce.
So we complemented each other, and we were able to, as a manufacturing community, carry Nigeria through the almost one year of COVID lockdown.
Naijaonpoint: In your journey so far, what are the biggest challenges you faced, and what have you learned from them?
Dr. Fidelis Ayebae: Two big challenges I’ve experienced in this business. One, people. Just when you think that you have hired good men, you are training them, or you have trained them, right? Because of their personal aspirations and needs to fulfill those, they leave.
And when they leave, it leaves a vacuum. There’s one thing you can say: every human being has a role to play. And when they leave, that role becomes a void that you need to fill again. So it is how to manage those human beings, keep them inspired, keep them motivated, keep them going, so that they can keep giving their all, in spite of whatever small salary they are getting.
The second one was the vagaries of the Nigerian economy. Nigeria is the most dynamic country in the world. You enter all kinds of potholes and human holes, whether it’s the monetary sector, whether it’s the fiscal sector, there is always one challenge going on. If it is not the devaluation of the Naira, it is the removal of a subsidy. If it is not the removal of subsidy, it is you supplying to the government, and the government is not paying for years. So if you are able to manage those and ensure that you keep afloat, then you will remain strong.
And an example of that was when (President Bola) Tinugu just came. Naira was devalued, or Naira devalued itself, if you like. And then the subsidy was removed. That was a double whammy, right? And so working capital became short. And the dollar was not there.
At the same time, we had grown so much that we needed a lot of working capital to survive. And the banks were charging some 27%, 30%, and 35% interest rates. How do you survive in the midst of all that? And then in the midst of all that, there was a lot of exchange loss at the back of that Naira devaluation.
But when you have a good governance system, where all the committees are doing what they ought to do, and they can see the tomorrow that no one can see except themselves, and management, cooperates in ensuring that what they see is taken care of within the operations of the company, then everything will just fall in place, naturally.
Naijaonpoint: How do you see the future of the pharmaceutical industry in Nigeria, and what role do you think Fidson Healthcare can play in reaching this future?
Dr. Fidelis Ayebae: The future of the pharmaceutical industry in Nigeria is great. The special adviser to the president on health, Dr Salma Anas-Kolo said something when she gave her first interview after her appointment, that she wanted manufacturers in Nigeria to meet up to 70% of the needs of our internal consumption.
In other words, whatever we are consuming internally, she wanted manufacturers within Nigeria to contribute to that. And local manufacturers took up the challenge, now we not only take up the challenge, but the government also has been very supportive in the presidential order that they gave, which removed duty on raw and packaging materials over the period of two years, which was also very helpful.
And so we now see an industry where, before she came in, we were at about 30%, 40% against 50% or 60% today. Each of us is expanding our operations, I can tell you in my fingertips, a minimum of 10 companies that are doing something new that will increase their capacity, Fidson is investing $50 million in the next three years on expansion program, which I am now retiring to ensure that we can raise the necessary funds through equity and debt, to fund that and make it happen, because we have faith in the economy.
Government is also doing their own thing. The reason I also see that the future is very bright is that today, we are at the top of the chain, Fidson is at the top of the chain, whether by the number of products that we produce, the number of the size of our factory, the number of lines that that factory produces, which is about 10, 11 lines, the expansion that we are trying to do right now, which adds new lines to it, whether it’s the number of employees, whether it’s revenue or even income, Fidson has been at the top of the chain over three years ago, and we will remain at the top of that chain, given the kind of investment that we are making.
Naijaonpoint: Who is your greatest inspiration?
Dr. Fidelis Ayebae: Who is my greatest inspiration for this? It is Aliko Dangote, my brother, who is a die-hard believer in the Nigerian project, and just by doing what he is doing in a small way, we can also see the impact that it has made for us.