Foremost food processing and packaging company, Ayoola Foods has come up with new budget food packs.
The initiative is in response to the devaluation of the currency and rising exchange rate of the Dollar.
Speaking in an interview with Oriental News Nigeria, Managing Director and Chief Executive Officer, Ayoola Foods, Segun Olaye also explained that the declining price of crude oil in the international market has also affected government revenue leading to non payment of workers salaries by some state governments.
He said all these factors have impacted on the manufacturing sector whose operating cost has risen significantly.
“Because of the situation in the country we have decided to come up with a smaller size of our product.
The minimum size now is 900gm but we are coming up with 450gm, so that even students will be able to afford it, at least with N200 you can buy a pack.
We want to penetrate the tertiary institutions in Nigeria, they will be our first contact, we believed that with this particular size of 450gm, we will be able to have more people consuming our products,” he explained.
According to Olaye, the new size will be out hopefully before the end of this month.
We want to create awareness through the tertiary institutions which is our primary target.
We looked at the situation in the country and decided to take advantage of it by reducing the size and price of our products making it more affordable to all.
He stated that the devaluation of the Naira has affected the manufacturing sector immensely.
Whether you are importing or manufacturing locally, definitely the high Dollar rate and the devaluation of Naira will affect you, you need packaging materials like carton, nylon etc, and the companies that produce them imports most of the materials, due to high exchange rate, they also have to increase their prices, which also affects our cost of production, nothing is stable, he said.
Speaking further, he noted that “once your currency is devalued, salaries will remain static and will not have the same value again, so workers will not have enough money to purchase goods, N100,000 will not be able to purchase the same quantity of goods that it purchases before, and no manufacturing company will reduce price when cost of production is going up, the purchasing power of an average Nigerian is not increasing , it is going down.
He pointed out that when you have so many states that are not paying salaries workers would not have money to buy products.
“So your cost of production is going up but you can not increase your selling price the same way or percentage your cost is going up, if you do nobody will buy your products, because the buyers purchasing power is going down.
That is the dilemma every manufacturing company and importers are facing now, but we know that at the end of the day, this government will streamline things and we will be able to do business the way it should be done” he said.
He lamented that business is dull at the moment, pointing that June to August is usually the sectors peak period as we use to have almost empty warehouse, but right now, it’s the opposite.
“Most states for one reason or the other cannot pay salaries of workers, and these are the ones that patronize our products, when your customers don’t have money, you are stocked with your goods, your expenses keep going up and your revenue