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 Nairametrics, Dr Ayebae says he has been inspired by his friend, Aliko Dangote, as he reveals what’s next for the pharmaceutical company.
Nairametrics: 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 Nairametrics 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.
Nairametrics: 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.
Nairametrics: 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.
Nairametrics: 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.
Nairametrics: 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.
Nairametrics: 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.
Nairametrics: 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.
Nairametrics: What initiative did you implement to drive innovation and product development at Fidson Healthcare?
Dr. Fidelis Ayebae: We have a full-fledged department dedicated to business development, product development, and innovations. That is a department that has over 20 people dedicated to doing one thing or the other on a daily basis in terms of R&D (Research and Development).
So you have some at the head office who work from the back room, and you have some at the factory who are the ones working on all the new products that we manufacture every day. On an annual basis, we introduce between 30 and 50 products to this market, and this is all driven by these young guys who are passionate about innovation, R&D, and what have you.
Nairametrics: Let’s talk about regulations in Nigeria. How do you navigate the regulatory environment during your tenure?
Dr. Fidelis Ayebae: Well, the first thing that anybody who is coming into this industry must understand is that it is a heavily regulated industry, and heavy regulation is necessary because of the kind of commodities that we manufacture, which are lifesaving in nature.
These are things that are either ingested or infused into the bloodstream, and the slightest mistake can cause someone to die. So your products are supposed to save lives. How shameful it would be if the product were the one that ends up taking lives?
And there have been examples of such. You know, many years ago, when the ‘My Pikin’ incident happened, the children’s paracetamol manufactured by a Nigerian company, where over 80 children died because they used the wrong excipient in manufacturing that product.
So for us, it is that what we do must be according to a regulation. That regulation is important. Now, like I say to my colleagues all the time, everybody doesn’t have to be in the pharmaceutical business. If you do not want to do it right, then leave it, leave the industry. I mean, you can go and do biscuits, you can go and do bread. You will make more money doing biscuits and bread than staying in the pharmaceutical industry.
The regulator is the one ultimately that is responsible for the organized growth and progress of the industry. Yes, sometimes they say something that rat rules everybody, but we have come to discover that once we fall in line, you make quick progress, you make organized progress, and you make honest progress.
So regulation has been instrumental to every single great stride that the industry has succeeded in taking over the last few years. Thumbs up to NAFDAC, thumbs up to the Pharmaceutical Council of Nigeria. Yes, I mean, they are not without any challenges. I have misgivings about some of the things that they do, but like I said, they mean well.
But sometimes what they are saying may just not be convenient, but if you manage to do it, you will find out that you are better off for it.
Nairametrics: How much has Fidson grown globally, and what strategies have you implemented to stay competitive on the global stage?
Dr. Fidelis Ayebae: Today in Nigeria, we are the largest pharmaceutical company by any measure, and we came to that position serving only Nigerians. Now, we have decided to go out into a larger world.
We are registered in Kenya, we are registered in Niger, Mali, we are registered, as I speak, in the Republic of Benin, in Senegal. And our business development unit is also looking at the Caribbean. So we are looking at these places with lower entry barriers than the West for now, so that we can spread our tentacles.
So we are already exporting to Niger Republic, to Mali, to the Republic of Benin, and we are making great strides in those areas.
So our global footprint is important for the future of Fidson. And that is why we are also investing the $50 million that I talked about over the next three years. It is actually to address capacity and the needs of the global community.
Nairametrics: So the person coming to wear these big shoes that you are taking off, if you want to give him a word or two, what would that be?
Dr. Fidelis Ayebae: Well, it is that history is very important.
It is the greatest lesson for anybody who wants to build the future. Anybody who does not understand history will be building in a vacuum.
It is, remember who we are, remember what we stand for, keep faith with it, and you will go further. And then, like we always say, innovation, automation, all of these things will help and simplify life.
Nairametrics: What legacy do you think you are leaving behind?
Dr. Fidelis Ayebae: Oh, difficult to say. I think I would allow Nigerians to judge me on that, but what I know is that I am leaving a sound and strong company that I managed on behalf of shareholders, over 11,000 shareholders that represent the Fidson community.
I represented it as best as I possibly can. I grew wealth for them. When we listed in 2008, we listed at N3.95. For a long time, we were under N10, but I’m leaving at a time when our shares are selling for the top that we have reached, which is N45.
So I’ve left the company, I’ve built wealth for investors, built wealth for staff, and built wealth for distributors. And of course, I will not leave myself out. I’ve also grown my own wealth.
Nairametric: So what’s next for you?
Dr. Fidelis Ayebae: Oh no, it’s still a lot of things around the Fidson family. I cannot abandon them. When I was a managing director, I had these guys, Mr. Biola Adebayo, who is now taking over from me, doing one thing or the other.
If I just leave, and he now has to do what he was doing before, or part of what he was doing before is handed to somebody, and he’s doing everything that I was doing all alone, things will slow down. So I am taking special projects, which is our development over the next three years, where I should still see from the outside what they are doing on the inside, but take some of those developmental projects and help them to do all of that so that they are not distracted from the day-to-day running of the business.
So that is what I see myself doing in the next three years, and also things that are complementary to the pharmaceutical industry, backward integration. We are going into the manufacture of hard gelatine capsules. We’re going into APIs (Active Pharmaceutical Ingredients). Those are the things that are on my fleet. So I am retired from my executive role, but next three years, five years, I’m in for the foreseeable future.
I see myself still doing things that are complementary in the company’s growth because I still hold the investing public, the investing community, a debt of gratitude for what they did for us, and so I cannot leave them and drive just like that to go and play golf. Yes, I will play golf, I will rest my ass, no doubt, but I’m still going to be very busy.
From outside, I’m not going to be part of the business at all. I’ve moved out of my office, handed it over to the new MD. I won’t even go there, I’m not interested to the extent that I don’t want to interfere because I know I have good guys, I left good guys behind.
Niarametrics: Do you think Nigerians are living healthily?
Dr. Fidelis Ayebae: Nigerians are lucky because we’re very resilient people. Imagine that we are not resilient people, this myriad of challenges and problems and wahala, whether it’s economic, whether it is political, self-inflicted, and machination, all the games that they are playing all the time to ensure that we don’t develop.
The resilience of Nigerians has kept us going. So, we are lucky people. And a happy man is a healthy man. So, Nigerians are healthy in that context. Drugs are still cheap in Nigeria. If you go to West African countries, all these French-speaking countries, my brother, you’ll be sorry for them. Drugs are very, very cheap in Nigeria. I’m telling you firsthand because I go there, and I also see how unhappy some of those guys are. So, when you see us at parties, weekends, during the week or beer parlour, because I go to those beer parlours once in a while.
I go to clubs, Country club, Ikoyi club, and all the other great clubs, the Metropolitan and so on and so forth. And you see all the happy people around there, or end of the month, community associations, Nnewi community association. Agenebode community association. And you see, these are the things that are keeping us going. So, we are healthy people. If we are not healthy, there’s no way we can engage in those things, you know, which have elongated our lives.
I don’t know how we count this so-called life expectancy age. Me, I think we are over 60 years, not the 50-something years that they are saying. So, Nigerians are healthy people and they are diehard.
Never say die. If we didn’t die under Abacha, we would not die under Tinubu.
