Saturday, 10 May 2014

Minting Money from Ice

Introduction

His name is Rotimi Odewale and he lives in Ibadan. He is in his forties and runs his own businesses. Although he graduated from the University of Ibadan with a degree in computer science, he is a self-taught manufacturer of industrial ice making machines (ice makers). From the construction-shed he built in his house, he supplies customers in far-flung cities like Kaduna, Calabar and Bauchi; and he almost always has a backlog of orders. What I found most intriguing however, is that after seven years of successful business and over 500 machines sold, the man still doesn't have an office - the kind equipped with an executive chair and air-conditioning - instead he spends his day at work with the machines, hammering, welding and the like. This is the master stroke of his career, but we need to go a little back in time so you can understand how.

A front-loading ice maker built by Rotimi

Legacy

Orphaned at a very tender age, Rotimi's father had had a very tough childhood. He told his young son about having to trek a distance of about 8 km to school each day, and back.  Through sheer determination and hard work, he finished secondary school, graduated from U.I, became a teacher & finally joined the army officer corps. As time went, he was able to provide his family with all the comforts he never enjoyed as a child, but he made a point of teaching his children the dignity of work; especially work that others feel too big to do. For instance, once in the presence of Rotimi's female friend, his father insisted he use his bare hands to pick some oily muddy dirt clogging a gutter. When he finished, his father was waiting with a bowl of water to wash his hands. His dad then went in and brought a bottle of Armani, which he sprayed on his son’s hand and asked him if they still smelled of the gutter. The flustered Rotimi said, “No”, then his father gave him the bottle of cologne and walked away. Lesson passed across; military style!

Growing up

Due to a referral, Rotimi had an extra year in the university and during this time he was able to put his father’s lessons to use. He visited with a friend working at a company close by and while there he offered some suggestions on the software program the friend and company were developing. Unknown to him, a director in the company overheard their discussion and at his next visit, requested to meet with him. The director was the cerebral Prof. Bamiro (ex-vice chancellor of U.I) who was on sabbatical at the company. The Professor was very impressed and contracted him to work on the software. He was able to complete the project in an extremely short period and was instantly employed, confirmed as a permanent staff (he hadn't graduated yet) and given even more difficult tasks to complete. He recalled once when he resumed at work on a Monday with the Prof and neither stepped out again until Thursday evening. They were trying to beat some deadline and as long as they had their cups of coffee, and he his cigarettes (he later quit smoking) they just kept working.


After 2 years, he left the company for Ilorin (and also Ibadan and Lagos), where he worked for years on contract with the Army. He was engaged to train officers with computers on simulation programs and software, data capture and satellite monitoring. After this, he started a partnership with a friend and opened a cyber-café located in Dugbe, Ibadan’s busiest business district. As the café began posting large profits, his business partnership began showing more and more cracks. He eventually upped and left, and was beginning to wonder if being his own boss wasn't the way to go. The next years were spent doing whatever came to hand and created a desire for something personal, which he would have full control over.

The moment of convergence

Then one day in 2006, while wondering and praying for guidance on which career path to follow, his sister told him that someone had discussed ice production with her and asked him if he would be interested in the business too. The question, or proposition I should say, struck a chord and he decided to give it a try. He recruited a technician who came highly recommended and who promised to build him a one-of-a-kind ice maker. It was an expensive mistake! After weeks of waiting for the creation, after several experiments by the technician, after Rotimi suffered two electric shocks (the kind that gets you flying across the room) and after pouring about N600, 000 down the drain, he fired the guy. He picked up his laptop and began reading up how to fix (or rebuild) the ice maker. One day he joined an online refrigeration forum; he typed in the words: How do I build an ice maker? And on the other end, somewhere in Florida, someone saw his question and replied: Are you there? Thus began a relationship that led Rotimi to owning his business today.


It was a 66 year old man who had only retired the previous week and was bored, thus looking to get busy that he met on the forum. The man who has a master’s degree in Refrigeration Engineering denies to this day that he taught Rotimi anything. Truly, he didn't spoon-feed Rotimi but kept referring him to websites and materials that he needed. He also kept supervising the construction by requesting for pictures of what his mentee had made and suggesting what next to do. He didn't collect a dime from Rotimi, rather he must have been so impressed with him that he sent him $5,000 sometime later as Christmas gift. Late in 2006, when Rotimi finally turned his first machine, it turned out to be really good! The ice formed in a shorter period and lasted a longer while.


Other People’s Money

When he started, he hadn't the cash to build another ice maker.  It was a number of friends who financed the construction; they gave him money to build machines for them. Upon finishing their machines, while ‘testing’ and waiting for them to be picked up, he continued to produce and sell ice with them. The income from these sales paid for components to be used in making the next machine. Through this method, he was able to build more machines, sell them and grow his ice sales business. By accident, he had designed his machines such that the ice were not only formed through vapour-cooling, like conventional ice makers. His cooling pipes actually touch the ice and provided additional contact freezing. The result is that they are rock-solid.


Ice selling like hot-cakes

God also opened his eyes to the profitability of ice sales by bringing him a distributor - a woman who bought some ice from him. The woman discovered that his ice kept longer than what obtained elsewhere so she decided to try and be his sole distributor. She often arrived at the shop as early as 5 a.m. every day to buy his ice. She came back in the afternoon and evening and bought EVERYTHING. She was reselling them far higher than the price of others, hence it was a mutually beneficial arrangement. He recalls that at a time when there was an extra machine the owner hadn't picked up,  she pleaded, cajoled and prevailed on the client to be more patient while ‘testing’ was going on just so her own supply of ice wouldn't reduce.

The Apola and Rotimi series


Customers call the top-loading ice makers Apola and named the front-loading ones after him. They come in single, double, triple or even four-unit sizes with varying load capacities. He has built 553 machines to date (early 2007 - April 2014) and each sells between N285,000 and N570,000, depending on customer specification. With his team of workers, he builds between one and three machines in a week, contingent upon order volume. As at this interview he had 5 workers (3 on contract and 2 on permanent basis) but order volumes often increase such that his staff strength reaches up to 16 workers. While the ice makers sell more in the rainy season (in preparation for the coming dry-season), sales of ice spike in the dry season; thereby giving him an all-year round supply of customers. He is a believer in the kaizen principle and is always improving the design or efficiency or cost requirement of his machines. His aim is to make every machine better than the last. Recently he had a friendly contest with one of his former workers, who has gone on to start a similar business. They wanted to see whose Apola machine would make ice faster. Subject to power supply, a typical machine makes ice in 12 to 16 hours. The ex-worker’s machine achieved it in 9 hours while Rotimi's did in 6.5 hours.
The Rotimi (L) and Apola (R) series

Let’s talk margins

A test ice maker of his with a single-compressor unit consumes about 15 units of energy (15 KWh) in making a batch of 18 ice blocks. At N13 per unit and N80 per block, that adds up to N195 worth of energy to make N1, 440 worth of ice. Other costs are water, cellophane, time and labour (this will further increase if generator is used). Same former worker for example, who lives in an area of the city where power supply is almost perfect, has more machines and approximately makes a guaranteed N25,000 every day (during the peak season) from ice sales only. Indeed the initial cost outlay is sizeable due to the purchase price of the machine but the returns are fantastic; even though the work is hard and can be quite painful.


Getting the last laugh


Rotimi is no different, at work, from the average auto-mechanic - greasy and sweaty. When he started out, he faced a lot of ridicule especially from people who couldn't comprehend why a degree holder should stoop so low! They called him names and some suggested a change of job or hiring hands to do the ‘dirty-work’. Being a chip off the old block, he didn't bother with their opinions. However, all that changed the day he rewarded himself with a new 2007 Nissan Pathfinder – that shut a lot of mouths! Now, many of his former career advisers are coming to him for business advice. And his admonition to them is the same, “Quit daydreaming. Wake up and smell the coffee: God has given you two hands so that you can fend for yourself”. 

He concluded with the story of a fresh graduate who came for advice on what business he could do. Following in his father’s footstep, Rotimi didn't tell him what to do but rather showed him. He took him to the city outskirts; to a bush full of pits where poultry farms dump their bird droppings. He then asked an attendant to hose one of the pits. As they stood there, overwhelmed with the rising stench, giant maggots of all species began to float atop the water. Rotimi picked a hand net, swiped the top of the pool and harvested some of the maggots. Showing this to the young man, he informed him that if he could come to his house with 50kg of the maggots, he was going to pay him N5,000. The man took his advice and began supplying fish farms with maggots and later confessed to sometimes making up to N12,000 daily from the sales of this premier catfish food.

  
Rotimi on his yam farm. To the right is the harvest of his yams 


Rotimi is also into property speculation, as well as fish and crop farming. He is a successful entrepreneur and believes you can be one too. Do you agree?


A harvest from his fishpond



For contact purposes, he can be reached on kubae@yahoo.com

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