In recent times, the government has been focusing on infrastructure development. How is your company coming in to help government achieve this?
We’re going to play a very critical role; especially from now on that we’ve come out of recession, and will do what we should have done in the last two years or so.
Now, we are talking about power infrastructure; transmission, distribution, networking, including street lighting.
There’s no aspect of life that we can do without cable. We’re almost an essential part of life because everyone needs electricity, and electricity cannot be conducted on its own without cables and wires.
Luckily, it’s not like mobile phone which can be connected using wireless. So, we have a mutual correlation with everything that happens with the growth of the Gross Domestic Product (GDP) of the country.
As our GDP grows, the cable and wire industry grows too, almost at the same pace. If it’s growing on the negative, we are also declining on the negative; so we’ve essential correlation to what is happening in this country.
Where we are playing our part is that we’ve grown the business, we’ve grown the capacity. The only way we can challenge ourselves is to make sure that government looks inward to local supplies rather than importation. We’re not saying we aren’t going to be competitive; but we must also have it in mind that importation is a disadvantage to Nigerian industries; especially the manufacturing industries.
If we don’t have any infrastructure deficiency, we will beat any competitor internationally.
Therefore, our charge to government is that Coleman Cables and Wires is available to produce any capacity, any type of cables that the country needs.
Last year, the Nigeria Content Development Board (NCDB) visited you to access your materials for possible engagement in supply for oil companies, what is the update?
The visit by the NCDB boss who came with some of the international oil companies (IOCs) was an eye-opener for them because they do not believe Nigeria has such capacity. It was very impressive for them.
It was at that visit that the local content boss told the IOCs that no more importation of cables, asking them to satisfy local markets first before considering it.
For us in the industry, we’re seeing a lot of positive responses from the IOCs now; which was initially very difficult.
Today, you’ll see Shell, Agip, making a lot of effort than most IOCs to actually encourage more local content. Others like Chevron, Mobil are doing a lot with their LCD departments in terms of capacity development; especially on cables, and we’ve started seeing positive impact in that industry.
What is your company doing in the fight against counterfeit cables and wires in the industry?
The first thing we do here in fighting counterfeiting is to provide quality cables and distinctively show people what a quality cable is all about. Apart from that, we’re making sure that there is capacity to feed the markets because there is no point fighting adulteration when you yourself cannot feed the market that you want to be operating from. We’re making sure that our capacity is always available and is not yet overused to the point of being burdened.
However, in terms of what is already done, we’re working with the Standards Organisation of Nigeria (SON) and we’ve also worked on our own to fight adulteration because it is a major bane in our industry. It’s like we’re fighting criminals that don’t really want to leave it.
If you buy a coil of cable, it is 100 metres long or more; that is the standard size made for Nigeria. But for some importers or those doing adulteration, from industry research, we’ve seen or read, we found out that a lot of them are not even up to
100 metres; it is between 50 metres and 64 metres; that means they’ve reduced 40 per cent of whatever you’re buying and even selling it at closely 10 per cent price less than the Nigerian cable.
So, if I’ve removed about 40 per cent of the length and sold it at 10 per cent less of the actual price, I’ve made a lot more money.
Secondly, the actual diameter of a cable, which is the current carrying capacity that it stipulates, will give you the size of the cable you’re going to use, depending on load; they are also reduced to about 30 to 40 per cent.
So, if you look at the diametre of a 1.5mm cable, we’ve seen a lot of 1mm and 0.8mm copper wires from most adulterated ones being branded as 1.5mm.
They’ve reduced the length by 40 per cent and the material by 40 per cent, but selling it at 10 per cent cheaper than the Nigerian cable.
So, it’s unfortunate that we look at prices too quickly in Nigeria rather than the quality of what we’re buying, as price sometimes can be very deceptive. That is the fact of the matter.
And unfortunately, price enticement has made adulteration profitable. We need to look beyond that; we need to move into the markets and explain to people that every cable is 100 metres long. Everybody needs to know what a coil of cable is; once they know that, I believe part of that problem will be solved. And then SON needs to do more.
How has business faired since the country pulled out of recession?
In any recession, the negatives are going to be everywhere and evident in everything; from economic figures to job losses. Now, coming out of a recession, they might not be as quickly positive as we had it while in recession; that’s the reality unfortunately.
We, as a company, are now seeing the positive; if Nigeria is growing as we’re now seeing positive GDP, then we’re growing at the same pace. We’ve seen a recession-prone area turning into a growth and optimistic position in the country; people are now more positively optimistic in making decisions. Projects are coming back on board and what we’ve seen between the last quarter of last year and this quarter actually gives us a positive sign.
The amount of projects we’ve returned to in the last quarter of last year and this quarter is encouraging; that means people are now believing that the economy is growing and is going to grow better.
Also, we’ve seen a lot of industrial projects come back on stage; we’ve seen a lot of housing projects come back too; even in the oil and gas sector, a lot of projects are coming back on stage because everyone is feeling a lot more positive about the economy. I think we’re going in the right direction.
What do we need to do to sustain the current growth we are witnessing in the Nigerian economy?
Sustaining the growth is easier, but discipline is key. The mere fact that things are going right, the naira is stable at N360 and its wholesale is around N330; its convergence is mostly likely to happen sometime between now and the end of the year. What rate, I don’t want to speculate.
So, the key thing is that we see positive signs in the economy and that I think is what we should focus on. And then, we should make sure that we don’t go back to square one; we must ensure we don’t start reversing policies that may invariably turn us back like a clock.
The problem with Nigeria is not that we don’t know how to solve a problem, but the problem is that we don’t know how to sustain the solutions. Our problem is our inability to sustain solutions.
How do we avoid going back to the same problems?
We must avoid policy somersaults, as they don’t sustain the solutions. We must keep advising government and policy makers to sustain their ideas and let them run through the test of time, rather than because you see it doing better and you start reversing a lot of decisions; especially when you protect industries.
Today, in the rice mill sector, we have more rice mills in Nigeria between in the last three to five years than we’ve ever had in 50 years, and there’re still more being built. We have more rice farms than we’ve ever had. Those are agricultural policies which have fiscal policy backing them. You won’t want to open our doors to rice importation again now that we’re getting it right. Industries don’t survive when you reverse policies that sustain them. So, we should not reverse policies that sustain growth.
Interest rate remained constant through 2017. The 2018 budget is outstanding and the 2019 elections are drawing nearer. What is your projection for 2018?
Our projection is still positive; I’m still in the agreement that we’re still going to see a GDP of over two per cent this year. I’m very sure of that from the way we’re seeing the businesses.
Nigeria is lucky in the sense that even when government gets to work; the private sector drives it anyway, whether we like it or not. We’re in a lucky situation that in the last five to10 years, the economy has changed from a government-driven industry to a private-sector driven industry.
Now, the private sector wants to survive whether they like it not; government not sitting down to do budget doesn’t stop you and me from doing our day-to-day activities. It’s imperative that they get their acts together. The same House of Representatives is shouting that the CBN should reduce interest rates, but you’re not giving them that power to do that; so you can’t eat your cake and have it. Invariably, we’re not helping ourselves.
Interest rate is already coming down because treasury bill yield has gone from an 18 to 19 per cent all high to between 11 and 13 per cent today and still dropping.
Invariably, once yield has dropped, interest rate for commercial banks will drop simultaneously. And we’ve started seeing the impact of the drop off the interest rate since the beginning of this month.
Coleman has been able to set a standard in manufacturing cables and wires, how did you achieve that?
Our brand has laid a very good foundation in the Nigerian cable industry, as we’ve pioneered a lot. The key part of our success has been our team and our vision. We see ourselves as being pioneers in a lot of projects and productions in the cable and wire industry. And one of the key things is that we’re very passionate about the Nigerian dream; that has been the driving force.
We’ve been in production since 1996; we started as a micro small scale business and we’ve grown to a small scale business and later medium scale business and currently a large scale enterprise. Today, we’re the largest producer of cables and wires in the West African coast.
The major drive for us has always been that we can make it; we always strive to work to make our cables and wires locally.
How has your company been able to contribute to Nigeria’s economy?
We’ve been able to contribute very well to the economy in terms of job creation and training. In our history of existence, we can’t count the number of people who have been trained within our system in different fields from electrical, mechanical to even operation. We’ve become a school for manpower development in the industry, and most of those trained have also graduated to become our full-time staff and some have been here between 10 to 15 years.
We’re proud that we’ve expanded with Nigerians; we so much believe that Nigerians can perform if given the opportunity. Yet, we need expatriate lessons and tutelage; but we don’t need it for life; we need it for a certain period of time. And as long as we believe in our people, because we’re very smart Nigerians, we just need to be shown the direction.
From my personal experience, it has shown that giving a Nigerian opportunity to learn has most times made us perform better than the people that taught us. If you look at our factory today, we’re 99 per cent Nigerians, and that one per cent is only coming and going whenever the need arises. We pride ourselves in showing that it’s a Nigerian company.
