Lagos Hair Care Maker Battles Soaring Production Costs

By Adebola Muili

A Lagos-based hair care manufacturer, Fortunate Venture, is seeking investment in production machinery and a permanent production site to expand its operations, as rising raw-material costs, electricity expenses and transportation challenges put pressure on its business.

The company spends approximately ₦10 million monthly on raw materials. Its manager, Bukky Ayeni, said the same quantity of materials that now costs the company ₦10 million previously cost between ₦1 million and ₦2 million, highlighting the sharp increase in the cost of maintaining production.

She said the company was also grappling with other operating expenses while trying to keep its products affordable and attract more customers in Nigeria’s competitive cosmetics market.

Despite employing more than 30 workers, Fortunate Venture still relies on manual production and hopes to acquire machinery to increase its output, improve efficiency and expand its market reach. Bukky estimated that the required machinery would cost ₦200 million or more.

Established in 1997 by the late Dr Ayeni Sunday Olalekan, the company manufactures three hair care products: Supershine Herbal Anti Spot, 3Days Anti Bump Cure and Supershine Herbal Hair Grow.

However, attracting customers remains a challenge for the business. Bukky explained that persuading consumers to try the company’s products instead of brands they were already familiar with had proved difficult, affecting its efforts to grow its customer base.

For a manufacturer seeking to expand, customer acceptance is important because increased sales could provide a stronger foundation for investment in production. Fortunate Venture must therefore manage the rising cost of production while convincing more consumers to choose its products.

The cost of raw materials remains a major concern. The company sources its materials from both local and international suppliers and must commit substantial resources to obtaining the ingredients required to maintain production.

*Cross ssection of some of the staffs during production*

Electricity is another cost the business must manage. Bukky said the company spends approximately ₦50,000 monthly on electricity, excluding the additional cost of fuelling its generator whenever public power supply is unavailable. With a litre of fuel currently selling for between ₦1,300 and ₦1,500, running the generator adds to the company’s operating expenses and further increases the cost of maintaining production.

Transportation presents further difficulties, affecting both the movement of raw materials from suppliers to the company’s premises and the distribution of finished products to distributors and retailers.

Bukky said the transportation expenses were difficult to quantify, while poor road conditions further complicated the delivery of products to retailers.

These challenges add to the demands on the company’s finances as it works to maintain production and expand its distribution network. The cost of moving raw materials and finished products also affects the resources available for other business needs, including investment in machinery.

Bukky expressed concern about the difficulty of repeatedly increasing product prices whenever operating expenses rise. She said businesses could not continue raising prices every week or month without considering the effect on customers.

For Fortunate Venture, the challenge is to manage its expenses while keeping its products affordable and attractive to consumers. This is particularly important because the company is still trying to persuade customers to move from familiar brands to its products.

The difficulties described by the manufacturer reflect wider concerns about the operating environment for micro, small and medium-sized enterprises in Nigeria, particularly access to affordable financing, reliable electricity and adequate infrastructure.

*Cross section of workers during packing and labeling*

In January 2025, President of the Lagos Chamber of Commerce and Industry, Gabriel Idahosa, called for improved access to affordable financing for micro, small and medium-sized enterprises. He advocated collaboration between the government and financial institutions to develop loan products with lower interest rates and simpler application processes.

Access to financing is particularly relevant to businesses seeking to move from manual production to mechanised operations, as acquiring industrial equipment can require substantial investment beyond what a company can readily fund from its existing activities.

A PwC Nigeria survey of micro, small and medium-sized enterprises also identified inadequate access to finance and poor infrastructure as major challenges affecting participating businesses.

The survey, published in 2024 following an online exercise conducted in 2022, covered 557 businesses across 13 sectors and 29 states. It found that 35 per cent of respondents identified inadequate access to finance as a major challenge, while 21 per cent cited poor infrastructure, including roads and unreliable electricity supply.

The findings provide broader context for the difficulties described by Fortunate Venture, although they reflect the experiences of the businesses surveyed rather than the specific financial circumstances of the Lagos-based manufacturer.

The Central Bank of Nigeria has similarly identified inadequate energy supply, limited access to affordable financing and poor infrastructure among the constraints affecting manufacturers.

For Fortunate Venture, these issues are directly relevant to its expansion plans. The company needs machinery to increase production, electricity to support its operations and efficient transportation to move materials and finished products. At the same time, it must attract enough customers to support any increase in output.

Bukky said the company currently produced enough to sustain its operations but believed acquiring machinery would enable it to do better and serve a wider market.

She did not provide figures for the company’s current production volume or estimate how much additional output the proposed machinery could support. The extent of the anticipated increase therefore remains unquantified.

The company has also not approached a bank or government-backed financing scheme for assistance, according to Bukky. Its expansion plans remain centred on obtaining the resources required to acquire production equipment and establish a permanent base.

Beyond machinery, Fortunate Venture hopes to secure its own production site, having operated from rented premises. A permanent location forms part of its ambition to establish a more secure foundation for its operations and future expansion.

Bukky said support for the business could enable it to increase production and create additional employment opportunities. She believes that helping small businesses expand could also contribute to government efforts to tackle unemployment.

The company currently employs more than 30 workers, but she did not specify how many additional employees could be recruited if the proposed expansion were achieved.

The history of Fortunate Venture provides further insight into the enterprise and its efforts to remain in business. According to Bukky, her late father initially operated a printing press business, but the venture struggled and eventually folded up.

He subsequently established the hair care manufacturing company in 1997 in an effort to improve the family’s circumstances.

Following his death, Bukky took on the responsibility of managing the enterprise and pursuing its continued operation. The business has since maintained its production of hair care products and a workforce of more than 30 people while seeking the investment needed to expand.

Nearly three decades after its establishment, Fortunate Venture is looking to move beyond manual production and strengthen its position in the market. However, the cost of machinery, the need for a permanent site and the expenses associated with sourcing materials, power and distributing products remain significant considerations in its plans.

For the company, securing the required investment could provide an opportunity to increase production, reach more customers and create additional jobs. Its experience also illustrates the practical challenges facing small manufacturers seeking to expand their operations and contribute to Nigeria’s productive economy.