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PURCHASING PROBLEMS OF SMALL SCALE INDUSTRY IN NIGERIA

ABSTRACT

This work was on the purchasing problems of small scale indigenous pharmaceutical manufacturing company in Nigeria (a case study of Encristo pharmaceutical industry Nigeria limited, Enugu). The researcher set out with the following objectives. To find if quality of products is a problem to Encristo pharmaceutical industry. To find out the inadequate capital of the company and how if affects the purchasing activities of Encristo pharmaceutical industry, amongst others. Four hypotheses were formulated. A review of related literature was also reviewed to expose the researcher to what has been previously done to ensure a sound basis for the research. A structural questionnaire were develop and administered by the researcher to staff and management, and customers/ccnsumers of Encristo pharmaceutical industry products until the government and management of small scale industries wakes up to the challenges facing them, small scale industries cannot survive and flourish in sufficient numbers to complete the industry of the futu6re. The following recommendations were made: The Enchristo pharmaceutical industry should improve on their products performance by making use of research work. The government should wake-up to their responsibilities by providing all the necessary requirement for the survival of small scale industries in an ever dynamic purchasing environment. The research strongly believes that if these recommendation strongly believes that if these recommendations are carried out the Encristo pharmaceutical industrial will serve their customers better and at a profit.

CHAPTER ONE

1,1 INTRODUCTION

This work was on the purchasing problems of small scale indigenous pharmaceutical manufacturing company in Nigeria (a case study of Encristo Pharmaceutical industry Nigeria limited Enugu). The researcher set out which the following objectives: To find out if quality of products is a problem of Encristo Encristo Pharmaceutical industry. To find out the inadequate capital of the company and how it affects the purchasing activities of Encristo Encristo Pharmaceutical industry, among others. That the purchasing problems of Encristo Pharmaceutical industry a s a small scale include lack of finance, supply of enough quantity if raw materials, labored managed problems purchasing /promotional problems, until the government and management of small scale industries including Encristo Pharmaceutical industry wake up to the challenges facing tem , small scale industries cannot survive and flourish in sufficient numbers to complete the industry of the future.

1.2 BACKGROUND OF THE STUDY

With the term of economic event brought about by the structural adjustment programme, (SAP) of 1985 – 1993, Nigerians were challenged to adopt their own technology and establish indigenous business otherwise known as entrepreneurship Nigerian government introduced the indigenization decree in the 1970s banning the whole ownership of certain categories of business by foreigners (Ebue, 2001:16). The essence of mapping out this objectives was to improved the technology/technical skills making provision for business management, training, development of women’s skills in food processing, the energy saving and lobbies for training opportunities relevant for small scale industries. The comprehensive definition of small scale industries/business was given by (Ani 1999:4) detail as owned, managed by one or two persons, influenced by the family I decision making, has no undifferentiated organizational structure, market share is small and employs less than fifty (50) persons.

The small scale industries in Nigeria are faced with a lot of problems such as lack of initial capital to start up the business, low standard of production which brings about great lost in business and the incapacitation level of local machines and indigene technology which have into gone far to challenge the modern technology. This implies tat Nigerian small scale industries have to struggle for survival in the midst of sophisticated and highly equipped foreign competitors who have so influenced the Nigeria consumers to look down on made in Nigeria goods or products.

The Encristo Nigeria Limited manufacturer of liquid preparations is owned by Chief I.O. Mereguim. The company Encristo Nigeria Limited manufacturers was established in the year 1994, the nature of the company is fully a sole proprietorship. The industry was being managed by the family which Chief Meregim is the chairman and the Chief executive. He started his business life right before the Nigerian civil war and ever since then he had an immense growth in import and export business. Construction, estate trading and pharmaceutical business. His wife was being of a great help to him by sharing her experience as an entrepreneurial and manufacturing business inclination. This has contributed largely to the growth of the company.

The company which in due time started immediately after inception started full operation on 1st June, 1994 with a foundations staff numbering 19, he also in proper was registered by the National Agency for Food and Drug Administration Control (NAFDAC), Pharmaceutical council of Nigeria, manufacturers association of Nigeria (MAN) and Pharmacist manufacturing group (PMG). The company’s activities are being directed from its operative heading quarters located at No. 8, 2nd Avenue Independence layout, Enugu and it is also from h8ere tat other sections of Encristo industries since inception has invested heavily on the manufacturing of the liquid drugs, otherwise liquid preparations. The products to the credit of the company’s brand name are including: Cristolyn (cough syrup) Criston (blood tonic) Encristo (multivitamin) Cristumal (paracetamol) and cristoquine (Chloroquine). These products are bottled in both bornc, 100ml and 200ml amber bottle and 2 liters plastic containers (hospital packs) and above.

The company’s giant step has being a contribution t the much desired improvement in the care delivery in Nigeria and to supplement the high demand and –consequent importation of drugs which has been on the rise and treat to the national foreign reserve. Moreover, imported drugs have been –on the high price side heavily concentrated with unrefined chemicals of dangerous after use reactions and affect. As time goes on the number of the employees or staff has increased to 35 including managerial supervisor’s assistant manager and operators.

1.3 STATEMENT OF THE PROBLEM

This research is very vital in the sense that the government is interested in seeing that made in Nigeria products are for self reliance through establishment of viable small scale industries. The problems of Encristo Pharmaceutical industry which call for critical evaluation ate as follows: 1. Encristo Pharmaceutical industry has restraints in promoting their goods and services. This is as a result of their poor purchasing orientation and low capital base. 2. They also have the problems of producing products that are rarely competent because product facilities are not always available. 3. They have not well located because of site cost. 4. The Encristo entrepreneur and his purchasing officials, lack of managerial know how initiate policy, cost, control and purchasing strategies. 5. most of the goods produced by Encristo industry in Nigeria have not adequate and appreciable market acceptance due to the negative attitude of Nigerians towards the made in Nigeria goods.
6. Encristo Pharmaceutical industry as a small scale industry lacks finance, supply of enough quantity, of raw materials, labored managed problems purchasing/promotional problems. These are some of the problems of the Encristo indigenous small scale industry in Nigeria and it is the interest of the research to critically examine these problems and find solutions to them.

1.4 OBJECTIVES 0OF THE STUDY

The intention of this research is to focus on the overall trend of purchasing problems and the performance of small scale industries in Nigeria. However, the objectives of the study are a s follows:

1. To find out if quality of products is a problem to Encristo pharmaceuticals.

2. To find out the effectiveness and adequate of the company’s promotional strategies.

3. to find out the inadequate capital of the company and how it affects the purchasing activities of the company.

4. To evaluate the purchasing efforts and performance of the Encristo pharmaceutical industry.

5. To know how the low standard of the production hinders the continuity of Encristo pharmaceutical industry.

6. To draw recommendations that will assist findings effectively check their purchasing problems as well as help government formulate policies tat will enhance the performance of small scale industries.

1.5 THE SCOPE OF THE STUDY

The scope covers only the Encristo pharmaceuticals in Enugu metropolis, and it is on purchasing problems ad prospects of small scale indigenous companies in Nigeria.

1.6 SIGNIFICANCE OF THE STUDY

The research study on purchasing problems of small scale indigenous pharmaceuticals manufacturing [companies in Nigeria is a very relevant one to the researcher and the company based on the primary and purpose of this research which the purpose was to obtain the valuable and objectives. Information on the purchasing problems militating against industries and provide solution to them. This will also be useful and necessary to entrepreneurs especially small scale industries and encourage investors to design their strategies because production starts and ends with purchasing.

1.7 DEFINTION OF TERMS

ENTREPRENEUR: According to Collins et al in NwachuKwu (1990:5), an entrepreneur is defined as a risk taken. He is a man who braves uncertainty. He is a person who strikes out on his own through native, dertoion to duty and singleness of purpose somehow creates a business and industrial activities where non-exited before.

SMALL SCALE BUSINESS: According to Ude (1999:2) small scale business is independently owned and operated for profit and is not dominated in its arrears of operation.

STRATEGY: According to Adirika (2000) strategies is a game plan of any firm depicting its objectives, were it is and where it want to be and being able to maintain tat state or position which has long term implications.

PURCHASING: According to Odike (2001:155) market is defined as a place where the buyers and the sellers come into contact for the purpose of exchanging goods and services.

PRODUCTION: This is a process of producing or creating new goods or products.

PRODUCT: According to Markins (1997) a product is anything that can be offered to the market for attention acquisition use or consumption which includes physical, place, organizations and items. It is also a bundle of tangible varying that offers some levels of satisfaction. For instance, in managing a product variables embraces planning and developing the right goods or services to be marketed by the company.

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