George E. Johnson, dressed conservatively in jacket and tie, startled his Nigerian employes by stepping up to the bright new assembly line and snatching up several jars of his "Ultra Sheen Creme" shampoo.
"The tops of these jars must be tight so the product doesn't dry out," Johnson told them.
On Nigeria's highly competitive consumer market, it does not pay to get an early reputation for faulty products. And Johnson Products Co., the fourth-largest black-owned company in the United States "gold rush" with a joint-venture, $4 million factory in Ikeja suburb on the outskirts of this teeming West African capital city.
In accordance with Nigerian joint venture laws, 60 percent of the investors and shareholders of the new, Lagos-based factory are Nigerians, while Johnson owns 40 percent.
The new company, Johnson Products of Nigeria, represents a response to the Nigerian government's open invitation to American investors, the growing investment interest in black Africa's largest oil-exporting nation and the profit potential in a consumer market estimated to comprise between 90 and 100 million persons. The Nigerian population is four times the size of Johnson's traditional market among black Americans.
After cautiously testing the market here in the early 1970s, the 53-year-old Chicago-based manufacturer said, he began in 1977 to export "in a big way" some of the company's 45 hair, cosmetic and toilet products to Nigeria.
Then the Nigerian government restricted import of cosmetics and Johnson "shifted into high gear" in early 1978 to open a factory here. The factory finally began production last summer with a staff of 35 black Americans and Nigerians.
Johnson and his wife, Joan, were in Lagos last week for the inauguration of the hanger-like factory building, a media advertising blitz, interviews with Nigerian reporters and dinners and cocktail parties with Nigerian government officials and the Nigerian board chairman, Opral Benson. The week's events ended with a six-hour hairstyling demonstration and a fashion show today.
"The opportunities and the potential which exist here are immense," Johnson said at an emotional dinner Thursday night where American and Nigerian partners in the new company wept. "The magnitude of our company's success is limited only by our imagination."
"The economic racism which persists in [American] society prevents Johnson Products and other black companies as well from marketing and selling products to the entire U.S. population," Johnson said. "We must be content with what amounts to a thin slice of a very large economic pie. It is to Africa we turn to broaden our horizens."
But getting established in Nigeria is a long and difficult process, Johnson and the new factory's American managing director, Marilyn J. Cason, acknowledged. A year ago, American businessmen traveling with former U.N. ambassador Andrew Young on a trade mission to Lagos complained to Nigerian officials about a confusion of laws governing foreign investment here, the country's slow-moving bureaucracy and pervasive corruption they encounter when trying to become established.
"It's been a long process," Cason said about the two-year effort. "It's hard to say that it was smooth, and Nigeria is an expensive country in which to do business."
Lagos, is among the world's most expensive cities. Apartment and house rents run from $50,000 to $80,000 a year with landlords demanding full payment of rents three to five years in advance. Fueled by a tripling of oil revenues in the past two years of up to $22 billion, annual inflation is running at more than 20 percent.
Johnson said he has spent "at least $200,000" in the past two years to fly company personnel between Nigeria and the United States and keep company representatives in Lagos to start the factory.
"It certainly takes a lot of trips of a lot of people to get where we are today," Johnson said. "But this market is sufficiently viable and attractive that it's worth the effort. Even with our 40 percent, Johnson Products Nigeria has the potential of exceeding the size of Johnson Products in the States."
Johnson began his company in 1954 whith a $250 loan and saw it grow to an annual volume of more than $40 million by 1976. The company slipped in 1977 -- down to $30 million -- after a Federal Trade Commission order requiring Johnson to warn customers of potential scalp and eye irritation from his hair relaxer's lye content.
Asked if smaller American minority-owned firms could realistically afford the start-up costs of investing in Nigeria, Johnson argued that it was possible.
Nigerian President Shehu Shagari during his trip to the United States earlier this month, "invited black Americans to invest here in the areas of manufacturing, technology and technology transfer and agriculture," Johnson said. "Given that attitude, I think it is possible for any who want to come."
If they come prepared to make a full commitment and to learn another culture, Johnson added, "the welcome mat is out."