Aruwa portfolio company Wemy Industries interviewed by International Finance Corporation

Paul Adedoyin Odunaiya, born and educated in Nigeria, spent most of his professional life working in the United Kingdom. Though he was trained as an accountant, he managed businesses in diverse fields, including IT, energy, and marketing. Then he returned to his home in Nigeria to take over the family business, Wemy Industries, which was started in 1979 by his father, an accountant, and his mother, a gynecologist. Wemy produces feminine care, baby care, and adult care products, under the brands Dr. Brown’s and Nightingale.

A few months after the COVID-19 pandemic began, Odunaiya expanded Wemy Industries to make face masks and other personal protective equipment (PPEs). But for the business model to work, Wemy Industries also needed to produce nonwoven materials–the raw product needed to make PPEs. In this interview with IFC Insights, he describes how COVID-19 spurred him to accelerate an ambitious business strategy that had been in the planning stage prior to the pandemic.

Q: Could you describe your thinking process behind changing Wemy Industries’ manufacturing to produce PPE products?

A: We had been thinking of going into PPEs and had been researching it. Obviously because of the health direction of our business, things like that are quite attractive to us. In this part of the world, costs [of raw materials] are everything and most things are imported. To enable us to reduce the costs of our production and get our goods to the population at a lower price, [we needed to produce materials ourselves] and that meant further investment. That is why developing a non-woven production line was very attractive to us.

When we had the opportunity to speak with the World Bank and IFC to get some technical advice and support, funded by UK Aid, we got very excited. And from what we have discovered from COVID-19 and the health crisis and the suffering in the world today, having local production of health-related devices is strategic for national security. You need to have these things locally because once a global health crisis affects supply chains, you can’t get enough of what you need. In a world where you are competing with countries with bigger pockets, you suffer. So it has become essential that countries and businesses invest strategically such that they can secure their health-care solutions. The same thing is happening with the vaccines:–the countries that have the plants and the resources get it first, and the countries that don’t [have plants and resources] seem to be getting it last.

Q: How does surgical face-mask production fit into your long-term corporate strategy?

A: Personal protective equipment including surgical face masks go with our business because our business is about manufacturing medical supplies. A diaper is a form of medical supply, an underlay [bed] pad used in hospitals is a form of medical supply, face masks are medical supplies, disposable gowns to protect you from blood that spills is a medical supply. What is common among all these medical supplies is that [they require] nonwoven material–the raw material that goes into making all these supplies. So, it made sense for us to start investing in a nonwoven [material] plant now that there is a large demand for PPE locally and globally. This is a natural progression of our business.

Nonwoven products are a critical raw material to make PPE. About 70 percent of a face mask is nonwoven material. A PPE gown used in hospitals is 100 percent nonwoven. Even bandages are nonwoven. It is a perfect fit for us because 40 percent of all our raw material currently is nonwoven, like baby diapers, adult diapers, wipes, face masks, sanitary pads–a lot of our medical supplies have a nonwoven component.

Nigeria is a petrochemical-producing country and that means we have the basic raw materials to make nonwoven materials. This part of the world is crying out for industrialization, which is critical for further development. So if you want to have an impact, you have to reduce your imports, make products locally, and export them. This is important, too, for Wemy’s development–to help us move from being consumers of raw material to producers of raw material and eventually exporters of it. The model is not new. There are companies in Bangladesh, China, India, and Poland that do the same thing.

Q: What’s your forecast on whether the PPE business will be a sustainable one for Wemy?

A: We already have a face-mask machine that produces about 800 pieces a minute. Diversification and [producing nonwoven material] were good strategies to help us strengthen our business. Investing in nonwoven production provides a lot of protection–a hedge against long lead times and foreign exchange risks. And PPEs are essential now to protect front line workers.

Q: But post-pandemic, or as more people globally are vaccinated, what will be the market for PPEs?

A: The culture of face masks looks like it is here to stay. We don’t know how long COVID-19 is going to be here for, perhaps another year or two. The fear that people had investing in this line of business was that if you invested in the machinery, when the crisis is over, the machine might be obsolete. But what helps us is that we are already in the same line of business so even when COVID-19 goes, we still have the market. Hospitals, manufacturers, and even airliners will continue to use PPE long after the pandemic is over.

Q: And how has the market been for Wemy?

A: We had existing distributors for face masks, but since there was a shortage of face masks throughout the country we had all sorts of people coming to us, people who usually imported from China or Europe. We had too many customers, to be honest. When COVID-19 was at its peak is when our sales were at their peak. We couldn’t stop working.

The facemask business is not an easy business. The problem is that there is a low barrier of entry, so you have to be strategic. That’s why we focus on B2B [business-to-business] rather than retail sales. The other challenge is supply of raw materials. You might not get your materials in time. Because of the supply gap of nonwoven material during COVID-19 and because we consume a lot of nonwoven materials, we felt that it was high time we go into the production of nonwoven. By doing this, we saved a massive amount of money and time.