The Managing Director of Ajinomoto Foods Nigeria, Noriyuki Ogushi, speaks to ARINZE NWAFOR about how sellers of unbranded monosodium glutamate, taking advantage of regulatory lapses, compete unfairly with legitimate businesses
There are concerns about the distribution of unbranded monosodium glutamate. Why is this so?
Let me explain some basic differences. We package our product while unbranded MSG is sold or wrapped in a way that the National Agency for Food and Drug Administration and Control does not approve. Also, unbranded MSG is sold by the sack in stores. That’s how they measure over there before being re-wrapped with nylon outside, which is not hygienic. They (unbranded MSG sellers) don’t have NAFDAC registration, so no NAFDAC number, which is illegal. And in terms of production cost, they don’t pack. Unbranded MSG sellers can sell at a lesser price because they do not have packaging material costs, labour costs, or NAFDAC registration costs.
One more cost is the sales and marketing costs from our side. But unbranded MSG sellers don’t have a sales force, nor do they do any advertising. They just want to make it and sell it at a cheaper price. That is why unbranded MSG can be sold without sales and marketing costs. Let me break it down with a football analogy: Say we want to play football and the opponents use hands like Rugby, and they come to our goal, the referee has to stop them. But in Nigeria, the referee, which is NAFDAC, does not stop them. For a foreign investor like Ajinomoto, it is very difficult to invest in this country because there is no fair competition.
If you were to quantify how much you lose against unbranded MSG, would you say it is up to 50 per cent?
If you compare consumer prices, it is obvious. Their price is about one-third or a quarter of our consumer price.
How do you arrive at that calculation?
For example, you get 10 grams of Ajinomoto MSG. If you calculate a parting gram, it is like one-third or quarter, and that is about three or four times our price. That difference is from the registration cost and the packaging cost. Our main challenge is that the unbranded MSG sellers try to sell their products with the Ajinomoto name. We want to tell consumers how to differentiate Ajinomoto from unbranded MSG. Sometimes, unbranded MSG is mixed with salt to increase the volume. However, Ajinomoto is safe and hygienic because it is produced and packaged.
Besides public enlightenment, how are you helping consumers differentiate Ajinomoto from counterfeited products?
We package our MSG to ensure its quality, so that it is hygienic and safe. The unbranded MSG doesn’t have quality assurance, but we guarantee our quality by NAFDAC. Yes, NAFDAC approval is evidence from outside. We also take some measures internally. Ajinomoto product packaging features include the big red bowl mark pot, the Ajinomoto name boldly written, the NAFDAC registration number, and the Mandatory Conformity Assessment Programme seal of quality from the Standards Organisation of Nigeria. We ensure that we conduct a sample and quality test on every batch we sell outside the company. And we don’t distribute it if it doesn’t pass that quality test.
How has your relationship with NAFDAC been?
We are registered with NAFDAC. They come over to inspect everything we do. Our team visits NAFDAC regularly, and of course, we get audits. We also report our problems, such as with unbranded MSG, to NAFDAC.
By how much did Ajinomoto Nigeria grow in 2024?
When compared to 2022 or 2023, we dropped by about one-third or one-quarter in terms of volume. Usually, one company cannot survive with that drop. But we survived because we had some support from our parent company. We would have been bankrupt without that. The parent company helped us through a capital injection.
On sales, from which part of Nigeria do you have the most customers?
We have a big business in the Northern parts of Nigeria. We had big sales in the Northern part, but it has dropped. That’s why this company is facing difficulty. The sales dropped because we have a big challenge with unbranded MSG.
You complained about how unbranded MSG infiltrates the Northern market. What level of support have you got from NAFDAC?
One time, NAFDAC carried out an enforcement by raiding one of the markets. But, only a few days later, Chinese MSG came back to that market. After the initial raid, NAFDAC left them for about three or four months. However, I think this is not a matter of buck-passing that we are talking about here. It is a fact that we want to ask for more support from NAFDAC, the Standards Organisation of Nigeria, the Nigeria Customs Service, and law enforcement agencies. We know that they are trying their best in this circumstance, but we want them to do more. We want to appeal to NAFDAC to strengthen enforcement.
Those who trade in this unwholesome business need to be tracked and sanctioned. The same thing also applies to law enforcement agencies such as the Nigerian Police Force. They need to help us in fighting this growing menace. The NCS needs to step up its game to prevent unbranded MSG from entering through our borders. I understand that these products come in large quantities through our borders. We need to step up enforcement to save the lives of consumers who are at great risk.
How would you advise the government to intervene at this point?
We believe that the government has a crucial role to play in sanitising this category. It must ensure that the right thing is done by maintaining that all the companies and their products get registered by NAFDAC before they can be displayed or sold anywhere. The government should make stringent efforts to ensure all products, goods, and services have the quality seal of SON. For those who are already operating in the market, the government has to remove them from the market to keep fair competition and protect the health of citizens.
On pricing, do you think Ajinomoto is competitive enough?
Yes, I think we are. Our products are pocket-friendly and competitive. Even when most of our products are sourced from abroad, we still ensure that the prices are affordable to the generality of consumers. We have made adjustments to the pricing of our product. If you use the naira devaluation as a yardstick, you will realise that the new pricing is insignificant.
Can you give a conservative figure of your market share presently?
Generally, market share has dropped by 40 per cent. This drop could be attributed to some factors, such as the absence of fair competition. In a country where purchasing power has reduced, it won’t be out of place when you see people going for the least expensive products. Now with the influx of unbranded MSGs, many consumers have resorted to patronising those dealing with these kinds of rewrapped products. This is because it is packaged in large quantities and sold cheaply. Beyond fair competition, the government is not doing enough to protect the interests of consumers.
What other strategies are you deploying to capture the other markets?
We are doing a lot to expand our reach in the Southern part of Nigeria. As you are already aware, the wrong perception or myth around the brand has always been strong in the South. But we are changing that. Currently, we are deploying a series of initiatives, communication, and marketing strategies to gain market share in the South. For the North, we control up to 90 per cent of the market share and remain committed to consolidating our hold. Though we currently enjoy 10 per cent from the South, we are optimistic that by the end of the year, it will have increased to 20 per cent.
How has your company contributed to job creation in Nigeria?
Our company has established its factory and offices across Nigeria. We have more than 450 employees at the factory, and more than 300 in the sales force. Our distribution network spans across Nigeria, creating employment opportunities in transportation, warehousing, and logistics management. We are also cooperating with many distributors, wholesalers, and retailers in our activities. This is how we help create various jobs and grow their businesses
Do you have any long-term goals in contributing to Nigeria’s economic development?
Our goal is to deliver quality products to all Nigerians and make all Nigerian families happy through continuous investment in innovation and market expansion. As a result, we can have a bigger business and more employees, which contribute to Nigeria’s economic development. However, when we achieve the goal, we will pursue a new, further goal.
