From selling spare parts to manufacturing an indigenous automobile brand: Know more about Innocent Chukwuma
Already dominating the spare parts and automobile space, Innocent could have rested on his oars but not so.
At the height of the “backward integration” campaign and calls for manufacturers to source their materials locally, Innocent Chukwuma of Innoson Vehicles stands out as the only manufacturer in the automobile space who has localised the production of vehicles.
From a small start of assembling the automobiles in Nigeria, Innocent Chukwuma has expanded to start producing and sourcing over 80% of his production materials locally, thereby creating employment at the local level.
This week on founders profile, we will be looking at the zero to hero story of this dauntless entrepreneur, the man behind Africa’s first indigenous motor brand, Innocent Chukwuma.
A rough start
A year after independence, Innocent Chukwuma was born on 1st October, 1961 in Uru-Umdim, Nnewi (now in Anambra State). As you may well know, Nnewi is also known as the Japan of Africa, for being a hub for automobile spare part dealers.
His was a very humble family, with Chukwuma Mojekwu (Innocent’s father) working as a junior civil servant and the mother/wife, Martina Chukwuma being a stay-at-home mum. Innocent was the last of six children, comprised of four boys and two girls.
As a child, Innocent lost his dad and was left to be raised by his mum. Though this was a traumatising and shocking experience for him at the time, he would later remark that the love from his elder brothers filled the gap, helping him to pull through the tough time.
He had his education in his hometown, up till the secondary level. All the while, he nursed dreams of becoming an Engineer. However, by the time he completed his secondary school education in 1978, he applied to the university, but failed to attain the cutoff mark and so was denied entry.
Making the most of fate
While awaiting another chance to apply, he started assisting one of his elder brothers who had a medicine store. This brief stint as a teenage sales boy showed Innocent that he had a natural talent for trading.
Combining his interest in engineering with his love for trading, Innocent moved on to commence a one-year apprenticeship with Chief Romanus Eze Onwuka who was the biggest motorcycle spare parts dealer at the time. Onwuka later founded the first private stadium in Nigeria, Rojenny Stadium in Oba near Onitsha.
Within the year, Innocent mastered the act of buying and selling of motorcycle parts, a trade which many others take as much as five years to master. He later returned to his brother, Gabriel to put his knowledge into use.
Gabriel had already registered a business name – Gabros International – to trade in motorcycle parts. So, when Innocent returned, he gave him N3,000 to get the new venture off the ground. With this sum, Innocent purchased the first goods and rented a shop and within another year, proved to his family that he was worth his salt.
When they took stock of the business after 12 months, the brothers found out that the motorcycle part business under Innocent, was generating about 10 times more income than the medicine store. This realisation formed the basis for closing the medicine store to concentrate on the spare-parts business.
Gabriel Chukwuma later invested in sports, real estate and hospitality, becoming chairman of Gabros International Football Club, a club which he later sold to Ifeanyi Ubah.
The birth of Innoson
In 1981, Gabriel gave Innocent some money to start up his own business. Adding this to his savings, Innocent started trading in Honda motorcycle spare parts under the name Innoson Nigeria Limited. This was not to last very long because Innocent’s dexterity soon provided him with sufficient capital to start importing motorcycles, not just the spare parts.
The birth or expansion of any business is tied to identifying a problem and proffering a solution. Innocent observed that the costs of motorcycles were a bit outrageous because they were imported in their already assembled form. Importing motorcycles like this made it impossible for a container to carry more than 40 units. As a result, the retail price was relatively higher.
Innocent then reasoned that if he could import the parts and assemble them in Nigeria, he could sell at a lesser price.
At this rate, the same 40ft container that could only take about 36 units of whole motorcycles, could take enough parts to assemble 200 units. After getting them assembled, Innocent had an advantage – he could sell his for N60,000, while competitors who were importing it whole could not afford to sell it less than N150,000 without running at a loss.
He was also able to vary his brands to get the best products at better prices, and very soon his competitors started buying from him. With this, purchase of second-hand motorcycles dropped because people were now able to get new motorcycles at very cheap prices.
With time, competitors like Leventis and Yamako figured out the strategy and also started importing parts to assemble locally.
Innoson takes to sail
Already dominating the spare parts and automobile space, Innocent could have rested on his oars but not so. He later says in an interview that it was always his concern to beat cost and be ahead of the game.
“…I looked at a motorcycle and realised that there is a lot of plastic on the body. So I set up a plastic factory. I decided to produce all the plastic components in my factories so that more units of the spare parts can go into a container.”
The plastic manufacturing firm is now one of the largest manufacturers of plastic products in Nigeria, and also one of the largest manufacturers of crash helmets in West Africa, with his erstwhile competitors now buying plastics from him.
With this done, it was only a matter of time before he dared to produce the first fully Nigerian vehicle under the aegis of the Innoson Vehicle Manufacturing Company. According to Innocent, he decided to go into vehicle manufacturing when he saw that the motorcycle business was becoming crowded out with Nigerians and Indians.
The Innoson Group has several subsidiaries now. Innoson Nigeria Limited (located in Nnewi) was incorporated in July 1987 and is now specialised in the manufacturing of motorcycles, tricycles, spare parts and accessories. It is Anambra State.
Innoson Technical & Industrial Co. Ltd is located in Emene, Enugu state and started operations in 2002, producing household and industrial plastics, storage container, fixture & fittings, health and safety accessories, electrical components and accessories.
Innoson Vehicle Manufacturing (IVM) is located in Nnewi and was commissioned in October 2010, and focuses on producing city bused, safe and cost-effective mini & midi buses, pick-up trucks and garbage collecting vehicles. The company also provides good services for repairs and parts supply.
The locally-made vehicles such as IVM Umu, IVM Umu and IVM Uzo now attract patronage from the political elites, government agencies and parastatals like the Armed forces as well as other paramilitary bodies.
Innoson General Tyres and Tubes Co. Ltd is located in Enugu state and simply produces motorcycles tyres and tubes, currently averaging about 8,000 pieces of motorcycle tyres and 13,000 tubes daily.
Innoson Kiara Academy
Technical expertise needed for the operation of a vehicle manufacturing company is not readily available. For the first few years of operation, IVM had to import a lot of foreigners to get the job done. However, Innocent soon came up with a technical expertise transfer strategy where the foreigners would return to their countries after teaching the indigenous staff.
“There are lot of unemployed graduates in Nigeria and we cannot continue to bring foreigners” he explained.
To further arrest the challenge of manpower, he established the Innoson Kiara Academy, a Technical and Vocational institution established in partnership with an international consulting firm.
The academy (branches in Enugu and Nnewi) runs a 9-months Education for Employment (E4E) programme providing courses that are tailored around the production processes and procedures of various factories within the Innoson Group. The students are taught in a king of modern apprenticeship delivery format, and are expected to either become self-employed at the end of the training, or get absorbed into the public or private sector.
Innocent recalled that prior to this time, the Innoson groups had challenges of recruiting graduates who did not have any training on the practical production processes, but not the subsidiaries in the group simply recruit staffs from the academy who blend in easily once they resume.
Suits and legal tussles
Innocent Chukwuma and Innoson Group have been involved in several suits over the decades of its operations but most notable are its several legal tussles with Guaranty Trust Bank Plc. In one such suit, the Federal High Court, Ibadan Division, On 29 July 2011, through a garnishee order absolute ordered the Defendants (GTBank) to pay the sum of N2,048,737,443.6k to Innoson Nigeria Ltd.
GT Bank appealed the verdict twice claiming that the judgment was obtained by fraud, but the appeal was dismissed affirming the judgment of the trial Court. In a final note on 12 May 2017, the Supreme Court dismissed the GTBank’s motion stating, inter alia, that GT Bank engaged in double speaking and in a frivolous frolic in bringing the application.
In the fresh suit, Innoson Nigeria Ltd and Chief Innocent Chukwuma maintained that the words published by GTBank – that it obtained the Court of Appeal Judgment by fraud and fraudulent suppression of the fact that Innoson Nig. Ltd. was paid the sum N1,406,515,845.98 in final liquidation of the judgment debt – implied that Innocent Chukwuma and Innoson Nigeria Ltd are dubious, dishonest, dishonorable, and untrustworthy, of questionable character, fraudster, criminally deceptive, cheats and obtaining money through false pretenses.
The co-claimants insisted that GT Bank has injured their reputation, moral character, credibility, office, vocation and trade and demanded N400billion in damages; N100billion exemplary damages; N100billion for injury to feelings – mental pains and anxiety; N150billion for injury to reputation and N50billion general damages.
Innocent was made honorary Life Vice president of the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture on 23rd of November, 2013, and is also a grand fellow of the Nigerian Institute of Strategic Management.
He sits on the board of IVM Innoson Group of Companies and is a member of the Manufacturer Association of Nigeria.
He also has on his shelf the Meritorious Awards by Nigerian Society of Engineers (NSE) 2008, Award of Excellence, Manufacturers Association of Nigerian (MAN) 2008 and also serves as a Chancellor at Imo State University, Owerri.
He received Honorary Doctorate Degree in Business Administration by the University of Nigeria in 2014, another from the Enugu state university of science and technology, and also a Doctor of Management from the Nigerian Defence Academy Kaduna.
He also received the Auto Personality of the Year by Guild Motoring Correspondence in 2013, Professor Barth Nnaji Prize for Technology at Igbo Awards in 2017, Best Customer by Bank of Industry, 2011, Officer of the Order of the Niger (OON) 2008 and Officer of the Federal Republic (OFR) 2011, among others.