A recent tour of the Nigeria Machine Tools (NMT), Ikirun-Oshogbo Osun State tells of how policy somersaults from different governments have ruined our manufacturing industries and the real sector in general.
Knowing well that no country can advance without a set of industrial machine tools, the Nigerian/Indian government set up this factory in 1980, to develop the industrial capacities of the Nigerian real sector.
Through the years, due to waivers and various imports inconsistent policies, this factory was left to ruin. The death of this factory led to importation of the various industrial tools needed for real sector to advance. This also led to lose of jobs, therefore increasing the unemployment rate of the locality in particular and the nation in general. Invariably, billions of dollars were left to rot away without accountability.
However, respite came in 2007, under President Olusegun Obasanjo, when the government decided to privatise public enteprises, under the Bureau of Public Enterprises (BPE). Some group came together (core investors) to buy 70 percent of the NMT for N1 billion; currently, the company is owned by private sector (70%), Fededal Government of Nigeria (15%), and the India government (15%). However, the administration of the place is strictly under private control.
In order to succeed, the company entered into collaboration with institutions and establishments relevant to its mission and vision.
Presently, it is in partnership with NASENi for the production of technical equipment for Nigerian technical institutions. It is also in partnership with BECK Prosper (in England/Aberden-Scotland) to learn every aspect of making stud bolts from the raw-material entry stage to the finished product. Furthermore, in order to boost its capacity, it is a subsidiary of QUINN McGrath Group, to boost its expertise in various manufacturing machine and industrial tools.
The factory, which presently occupies only 20 percent of its land mass, laid off it workers when it was bought in 2007, but today has direct employment of 220 workers, and hopes that at full production level it will become 350.
During the tour, led by Ray Regan, general manager/COO (an Irish); Ibitolu Martins, head engineer, (Nigerian); David Regnolds, HSEQ manager, (South Africa), and Hamza Yusuf, group head, corporate communications (Nigerian), the relics of the past rots were still visible, but where the present administrator is leading the company was clearly seen.
Talking about its source of raw materials, according to Ray Regan, since Nigerian scrap metals are not suitable for its production here, imports have become inevitable.
Technology Transfer: With the Nigerian Content Development Bill in place, it has become imperative to make the factory run in the near future without expatriates, according to Regan. As there is an agreement with the present crop of expatriates and the owners to make the factory run independent of expatriates in the future.
Production Line: The factorycurrently has installed capacity to do the following, which are visible on ground:-
– Production of stud bolts for the oil and gas industry
– Coating facilities – PTFC
– Assembly plant for tractors ranging from 55 – 80 horse power in association with Winconstein Manufacturing ( another partnership)
– Up graded training institute – handling training for wide-range technical skills, even for external clients (with the vision: The wealth of a nation lies in the skills of its people)
– Casting capacity for furniture, welding and scaffolding, etc.
– Extended machinery capabilities for spare-parts production, including fabrication. Today, it can fabricate any industrial tools to specification.
– Threading rolling mill
– Zinc plating plant
– Foundry plant with capacity to produce – 2 term furnace x 2 shifts x 6 heats x 25 days month = 2.1 metric tons per year.
NB: Its next line of product is in the production of flanges, which goes through stud bolts, used in the oil and gas industry; and the next is its galvanising plants. However, the factory has the original design for the production of both ferrous and non-ferrous products of up to 3.0 metric tons per annum.
Client: First week of February 2014, General Electric visited the factory in talks on strategic partnership. However, Cameron and FMC Technologies are in talks with NMT for the supply of sub-sea equipment and installation materials.
Shell BP and ExxonMobil are also in talks with the company,however, waiting for the company to give the signal of full mobilisation. Lafarge WAPCO and the Nigeria National Petroleum Corporation are in talks with the company to fabricate tools necessary for their production processes.
It is worthy of note that some state governments interested in agriculture have already placed order for supply of tractors and other viable farming equipment, hitherto being imported.
Demand from government: With the many challengers facing the real sector in the country, the NMT is not asking for fund, but that government should do one or two things to make the vision of the investors a reality, such as:-
– Reduce delay in getting raw materials through the ports
– Reduce interest rates farmers are made to deposit before these equipment are given them
– Needs government supports and patronage
– Reduce the 20% duty on steel products, since there is no complementary firms in the country producing these.
It is also worthy of note that in order to increase access to the factory, the Osun State government is in a hurry to dualise the road leading to it, and any time soon it would be commissioned.
Reviewing the efforts made so far by core investors in the factory, one will realise why experts say, “government has no business doing business, instead, it should provide the enabling environment for private sector to thrive, and the economy will grow.”
Just as Norbert Chukwumah, new managing director/CEO, Nigeria Machine Tools, said recently, “Nigeria Machine Tools is really ready for business.”
Calling for adequate support and protection from relevant arms of government to ensure that the company and other Nigerian manufacturing entities succeed, Chukwumah said “NMT, in which the Nigerian government holds 15 percent equity, along with the government of India (through HMT International), which also holds another15 percent equity, is the only machine tools manufacturing company in Nigeria and is in stiff competition with cheap foreign imports with ample prospects for future expansion and growth.” Since the official handover of the then moribund company by the Bureau of Public Enterprises (BPE) to its new investors, massive investments have gone into transforming the company into a modern manufacturing company with the capacity to produce a diverse range of industrial products and services to international standards, according to Chukwumah.
“We have upgraded our facility, acquired state-of-the-art equipment and developed the highest level of competence in the manufacture of various products including stud bolts, flanges, machine tools, agricultural implements, municipal castings and technical training, corrosion protection and machining services. NMT is open for business and we are ready and committed to playing our own part in Nigeria’s industrialisation,” he said.
Presently, the company’s short-term objective is to become West Africa’s leading manufacturer of its range of products, he said, saying “we intend to assume leadership of the West African market in the next three years, and we shall achieve that by focussing on the needs of the markets and delivery of un-compromised quality in every single item that rolls out of the plant backed by projected technical staff strength of 350 by the end of the year.”
On the abundance of low-quality goods in the market, he noted that most of the inferior products were imported from a host of Asian countries even as Nigerian manufacturing companies go to great lengths, in a very challenging environment, to manufacture products of very high quality. It is thus unfortunate that the buying public still leans towards the less durable, low quality products that are dumped in the country at relatively much cheaper prices.
Further more, the effective bank lending rate of around 23 percent per annum, power, security and infrastructure challenges are particularly damaging to manufacturers with long-term manufacturing goals and objectives. The question now is – will government allows this kind of factory that can galvanise our real sector with enough industrial tools suffer from the continued hardship the manufacturing sector in the country has been grappling with? Only time will tell.
Indeed, stakeholders are becoming restive in their quest for action by the Federal Government to truly set the real sector in the path of industrialisation by giving every support needed by investor, especially those that have shown seriousness, to protect them from cheap imports so as to grow them to maturity.
Knowing fully well that it takes a committed investor to put his money in manufacturing, especially investor who understands what manufacturing processes and expected returns are.
It is still most unfortunate that the buying public still leans towards the less durable, low quality products that are dumped in the country at relatively much cheaper prices, despite bank lending rate of 23 percent per annum, insecurity and other challenges the real sector has been facing.
It is therefore left to be seen how government and Nigerian institutions who have need of what are produced here would resolve to do within the foreseeable future, to boost patronage, knowing fully well that Nigeria’s loss is other countries’ gain as far as industrial machines are concerned.
We intend to assume leadership of the West African market in the next three years, and we shall achieve that by focussing on the needs of the markets and delivery of un-compromised quality in every single item that rolls out of the plant backed by projected technical staff strength of 350 by the end of the year.
