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As Indigenous Wire Companies Continue To Suffer Setbacks

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Stiffed competition from substandard and imported products, market structure, security challenges, the burden of neck breaking tax, epileptic power supply, high cost of production and draconian loan, are a combination of the setbacks that have continued to put impediments on some Nigeria supposedly giant industries, reports Beatrice Gondyi

 

One ‘made in Nigeria’ product that can not just only compete favourably in any part of the world without necessarily going through any laboratory test, if the need be, but also leads is the Nigeria made wire.

The quality of ‘made in Nigeria’ wires had maintained its standard for decades and has continued to lead, despite competition from cheap and substandard foreign cables flooding the country’s market to force them out of place.

This might explain why one of the leading wire companies in Nigeria is at the brink of folding up, after decades of contributing to the economic development of the country, a situation experts said might force many parents and youths into joblessness.

When Alind Nigeria Limited (now Alind wires and Cables Limited)  was established in 1980 by the former Bauchi state government, it was  and still is adjudged the best in the whole of the Northeastern region of the country.

With the potential of employing thousands of jobless youth roaming the streets in that part of the region, the company had the initial capacity of producing 50, 000 installed capacity annually. This was the vision of then goverment of Bauchi State to boost the internal revenue generation of the state.

States like Kano, Jigawa, Nasarawa, Plateau and others had in the past relied heavily on the company for quality cables.

Sadly,  due to negligence and other cumulative challenges in the last decade, the company has been rendered almost inactive, now lying waste. This is contrary to its initial 50,000 yearly installed capacity as it barely produces 10, 000 in a year, which has been considered grossly inadequate to feed the region with original wires.

The company was established in a joint partnership with India,  Alind India who were then the technical partners.

The Managing Director of the Company Dr Ahmed Mai Abba in a chat with LEADERSHIP Sunday said “The State government provided the resources and the environment. It remained like that up to 1998 before it was privatised,  Bauchi investment, Gombe investment and some other individuals.

“Today, the company is now in public private partners (PPP) That is the status of the company. It has installed a capacity of 5000 kilometres of aluminum, 50,000 kilometres of domestic cable, we have aluminum, that is high tension, we have domestic cables or domestic wiring”.

“We are producing, we have been doing our best to make sure we make our impact in the country. Ideally we are supposed to produce 50,000 kilometres annually, but due to market structure, we hardly meet 40 percent of our capacity as it is, Dr Ahmed told LEADERSHIP Sunday.

“Such is our challenges. In the whole of the Northeast Alind is the only company of this kind. Basically our market structure is based here in the Northeast and neighbouring States like Plateau, Nassarawa, Kano Jigawa also patronise us. Our major competitors are Kakos, Cutix, but in this region, we are the ones producing”.

Despite its huge potential, findings by this newspaper have shown that one of the company’s major setbacks is security challenge that has bedeviled the region in the last few years. But above this is the influx of substandard cables into the market.

“We still have products that are not in the market. Initially, the security challenges has affected us because Borno is our highest buyer.

“Another challenge is the government allowing substandard products into the country. We make sure our product is of standard quality. If the ones from outside are cheaper and people now go for cheaper product. Why will you spend so much building a house only to use substandard wiring?

“Then we have the regulatory agencies like SON allowing substandard products to come in, then there is a problem automatically. What is happening is we pay double taxes, we pay VAT, CIT, ETF then PAYE and our interest is not protected.

“Then there is power issue. Initially what we are paying as power bill whether there is light or not we must pay N167,000 every month.  These raw materials are imported. The importers you cannot import without capital. If you want to borrow, it is exorbitant. If you say you will import, you need minimum of one billion naira, explained Dr Ahmed.

“You go to the bank, the minimum charge is 30 percent, that is every month you will be paying 300 million, and the duration for you to import from London to Nigeria is three months. Automatically you are paying 300 million times three months, the goods have not even arrived, will you produce?” he asked.

“The goods have not come to you yet. You need at least 2 billion, first initial order  three months. Before the three months elapse you order for another one that is six months. So the first one has not arrived, you are paying 300 million, that is just interest plus principal, how?”

He continued: “As we are talking, you hardly make 10 million in a month what will you do? Automatically you can’t produce. Such are the challenges, it is enormous. Our staff strength is about 60. We produce on a daily basis. As I am talking to you, we have goods on the ground of more than 40 million.

“We have not sold even one Naira since morning.  In the 80’s and 90’s, the challenges, the competition is not like now. There are drastic changes. Normally Maiduguri is our biggest market but we can’t now because of capital and we can’t go to the bank.”

Osinachi Ndubuisi, a businessman who deals in cables, told LEADERSHIP Sunday that Alind Cables is one of the best in the state. He said he buys other cables from other parts of the country but his customers prefer Alind, he said though despite the challenges, there is huge patronage.

“Alind Cables is one of the best companies around. It is the best in the state. There is huge patronage. I get C Divine from Lagos Pycables and others. But the people here prefer Alind.

Other businesmen and Bauchi residents who spoke with LEADERSHIP Sunday said the cables had gained ground in the region but want government to come in and revive the ailing company.

“I used Alind cable to wire my house and I have not heard any fire out break, the cables are of standard”, said a resident.

Another resident Alex Oyewale said he used the cables but they are on the High side.

“I built my house in 2013 even though I used Alind cable, they are expensive, I learned they have folded up because they are not in the market like before. They are good but there are other cables which are also good but as expensive”.

Dr Mai Abba called the major shareholders Bauchi and Gombe States to revive the ailing company by patronising its products

“The major shareholders are Bauchi and Gombe states. So what we are asking from them is the patronage. If they will patronise there won’t be much problem. If they award contracts, let them enact a by law that all contracts executed by Bauchi and Gombe States, they should insist on using Alind, because our product is certified by SON. We hope the current government will change the pattern”.

 

Foreign Suppliers Want To Cripple Us

While these challenges are yet to be addressed, management of the company explained to LEADERSHIP Sunday that their Chinese raw materials suppliers are already taking advantage of their setbacks to push them out of the market for good.

They explained that due to the waiver these foreign companies get, they can sell far more cheaper than Nigerians and that is really affecting production and sales, saying it is market strategy adopted by this company to send them out of the market and thereafter hike the price of the same product.

“We source our raw material locally from the Chinese. We have been buying from them. They are the ones producing the raw materials for us to buy . To our surprise, just last two weeks they now started producing cables again, selling at a price we cannot sell.

“So automatically they want to push us away. They sell the raw materials to us we buy from them because it is cheaper than buying from U.K or U.S. They went back and started producing the same cables we are producing. They are based in Abeokuta. They source local materials to produce the raw material and we acquire from them in small quantity, Dr Ahmed cried out.

Automatically they want to drive us away. We buy the raw material from them so we can’t compete with them. They are the ones producing the raw materials and selling it to us. The cables are of different sizes, 1.5, 2.5, 4 mm, 6mm,  and so on. They are selling below our cost of production.

“They produce the raw materials, they sell it to us and government is not doing anything. Government has to come in.  They are giving us raw materials yes, if we are to buy the raw materials from outside, we need nothing less than one billion naira at least. We are buying at 10million, 20 million from them. They want to cripple us.”

Let’s say we are selling at 6150, they sell at 3000. What we are paying, they are not paying. No VAT, no ETF so they can afford to lower their price. The government should intervene. Like now we are selling at 6900 Naira, they are selling 5150 and its the same product. They want to cripple us, its a market strategy, they cripple us and later hike their price.

“Here we are redundant since morning I have not sold one Naira and we pay tax. Are they helping us or killing us? It is terrible. Somebody comes to your house, he wants to drive you away. One of our customers told me that they just brought the cables and dump it for them. People will rush their own and they will not understand.

“They will say this one is Chinese product and this one is Nigerian made, they will not understand the implication. Government should do something, they must intervene because no country can develop without industries. Government can’t employ all labour, it can’t. How many people are are churning out of the universities, polytechnics, who will employ them? Government has to come in.

“At least you are producing raw materials for us, we thank you for that, stop there. We are sad over this development,” he concluded.

The Fight To Save Domestic Industries Against Importation Of Substandard Products

Meanwhile, despite efforts to sustain existing and ailing industries in the country, Nigerian domestic industries have continued to groan under the yoke of fake and substandard products in terms of human and material losses.

In the wires category, countless homes have been razed down due to fake cables, while adverse the effects are numerous as a result of the use of substandard cables. The national economy has also been directly affected in terms of lost revenues through taxes.

Nigeria has also over the years been ranked among the world’s highest market for fake and substandard products and equipment as evidenced by the wanton display of all manner of poor quality goods and products littering the open markets.

Conservatively, more than N15 billion is said to be annually lost to fake and substandard cables.

Economically, it is detrimental to revenue generation drive of the government. This way, the economy loses potential employment opportunities as genuine manufacturers and employers of labour are hindered because of illegal activities. Investors are discouraged, thus dealing a deadly blow at government’s efforts at encouraging foreign direct investments

Some analysts have concluded that the influx of counterfeit and sub-standard products into the domestic market raises serious doubts about the current efforts by the federal government to resuscitate the real sector for it to contribute meaningfully to the Gross Domestic Product (GDP).

In 2018, alone the Standard Organisation of Nigeria confirmed the destruction of fake cables worth over N8 billion.

Osita Aboloma, the director general of SON, confirmed this last year when he took members of the Cable Manufacturers Association of Nigeria (CAMAN) to the two residential buildings in Ajangbadi area of Lagos State where it uncovered over N8 billion worth of Nigerian cloned cables.

An enforcement team from SON had uncovered over N8billion worth of cloned cables at two residential buildings in Ajangbadi,  Lagos State. The team discovered the warehouses where 20 different brands of cloned cables were kept.

“We have held them down for the past six months. We are processing them for ratification and when necessary, it would be destroyed subjected to the final order from the court that is coming out any moment from now. We want to assure Nigerians that the battle to rid Nigeria of substandard cables is an ongoing battle, which we are fighting with the cable manufacturers of Nigeria”, said Aboloma.

He said the unscrupulous importer cloned Nigerian cables already certified by SON, in deceptive packages to deceive the unsuspecting Nigerian populace, adding that more of such firms would be uncovered courtesy of its proactive surveillance across the country.

“They saw their brands are being threatened and they came to us and we have been able to arrest the situation. We will keep on doing that to discourage anybody that wants to take advantage of our attempt to create an enabling business environment for local production. Our cables are the best in Africa. They are safe to use and any cable that does not conform to our MANCAP is therefore not certified by us, he warned.

“We will keep on going to the markets to conduct surveillance exercise and inspecting factories of these cable manufacturers, to make sure they all conform to the Nigerian Industrial Standards (NIS) and whenever they fall short of standards, we will clamp down on them”, assured the SON boss.

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