Managing Director, Coleman Wires and Cables Limited, Mr. George Onafowokan, in this interview with BUKOLA IDOWU, spoke on the company’s local production of high voltage cables for the oil and gas sector, local content patronage, government support, investment inflows as well as his company winning the Nigeria Oil and Gas (NOG) 2019 indigenous company of the year award.
How did your company venture into the oil and gas sector?
Most people thought we got into the oil and gas sector about two years ago, but sincerely we have been in oil and gas business for over nine years, quietly pushing the business into recognition. The major move by the company was the opening of its first high voltage factory in Nigeria 2014; which was and still the first investment to directly impact the NOGIC Act 2010 for the in-country product of high voltage cable.
Despite this move, we still found it difficult to make headway in the oil and gas sector and later on, with NOGIC Act of 2010 we increased our investment to $28 million in a high voltage factory. From 2017, I will say our efforts started geminating seed under the NOGIC Act with the support of Nigerian Content Development and Monitoring Board (NCDMB) under the current leadership of Engineer Simi Wabote.
Engineer Wabote came around with international oil companies (IOCs) and their general managers on the trip and that was a good thing for us. The visitation brought about great change to us to showcase how much we have impacted the NOGIC Act and for the team to see how unutilised our capacities for in-country low and high voltage production.
The Act is very clear about the two aspects under it: low voltage cable and high voltage cable.
As at 2014, when we opened the high voltage factory in Shagamu, not even one meter was produced in Nigeria. So, we started producing this cable and we are able to produce far more. We can produce 100 per cent of it locally, but after the visit to the factory, the team was shocked that this kind of quality products existed in Nigeria.
What was the drive behind your local production of cables?
We have started working on some new cables and it will be the first of its type in this region. The cable called WTR has never been considered for production in history in this part of the world. The IOCs were skeptical about it being produced in Nigeria but today, that cable has been tested by the IOCs and they are proudly talking about it. This tells you that there is possibility of local content if we drive and believe that Nigeria can do it and that is the level of skepticism that we have to keep breaking.
To make it viable, we must raise the bar and raising the bar is not about getting the job, but in standard, machinery, and capacity building in Health and Safety Commitment policy (HSC), quality assurance and employee systems. Once you raise the bar, it makes everybody to feel at ease. Some Europeans who visited our factory and test lab were surprised at what they saw and they asked if they could bring cables for recertification in our lab.
Some of the equipment in our own lab can only be seen here in this country. I have a testing lab that cost a million dollars and how many people can afford this? So the investment bar has to be so high that you are either feeling you are in Europe or even feel beyond that.
This is what we stand for and we got it right from day one, because we pushed the investment bar as our company can compare favourably anywhere in the world. I will use the word of Engr. Simbi Wabote when he was speaking during a programme that if oil and gas companies don’t practicalise local content, at the end of the day, the tsunami of people going across the sea will not stop because if they don’t create jobs in this country some people will even be willing to cross the sea.
More jobs must be created to reduce unemployment. Our drive is to make cables cheap at a reasonable price to all. Our cost of investment is a lot higher than any other cable company and that has been our success point. If you are hoping to get returns in six months, you can never be successful in the cable business.
Local content is one of the key policy of the government, why did you embrace it fully, instead of doing importation?
Coleman is a key local content believer, which means making it possible and viable. We are an indigenous company that believes a lot in local content. For local content, what makes us to stand out is that we are always pushing the limit. Today we are experts in high voltage production of Specialty Linear Polymers (SLP) and high voltage cable production. We are the only source in West Africa and Central Africa and we have pushed the limit of that till now and are moving it in SLP and marine cable production.
What have you invested and what makes the company stand out?
What made us to stand out is our own internal policy. We pushed the limit on not importing anything. Our policy started with our resolve that we will not import what we could not produce, which meant that we must try and do everything possible to start producing locally.
For me as the leader of the team, within the first one or two years, I studied this industry and I felt we needed to think differently for this industry to be successful because we have so many deficiencies from infrastructure, power, water amongst others.
For an industry that depends heavily on power, depending on diesel generator is going to be very tough. So, you have to invest far more than other businesses in order to meet up with the expectations of your customers as it relates to pricing.
So, we spent the first couple of years building infrastructure and capacity to the level of tackling our deficiencies and that has worked. First, you do the project before you expect returns. It made us to be above our competitors because a lot of businesses will not place investment before return.
It is a blind investment. We knew what we were doing with the huge investment and our team believed in what the leadership was doing and over time we have been able to prove that it works. It might mean we don’t generate returns as quickly as most investments should be; but we believe in a long term and today it is a success story. My colleagues that cautioned me then, don’t say so anymore because this made us to stand out.
We have over N20 billion worth of investments so far and we are still investing. By next year, we will have additional $40 million that will open in the first quarter of next year and all have to do with cable. For us this is how far we can take it.
How has the country’s power supply affected your operations?
The only solution to epileptic power supply in Nigeria is deregulation of the power sector. You need to make it possible for me to generate, transmit and distribute power or do anyone of them without hindrances and that is the solution. We all keep talking about the telecommunications sector.
This happened because the government acted as the regulator and allowed the private sector to drive it. I could remember we bought a sim card for N25,000 and we were paying per minute billing.
We cannot deregulate a sector and still allow monopoly. We cannot have Distribution Companies (DisCos) here and there and still expect a miracle to happen. There is no competition, we must deregulate totally. We should make power easy to be sold to people at cheaper rates and if the price is competitive, the ability to move from one power provider to another would be easy.
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