Juliana Taiwo-Obalonye
Dr. Leemon Ikpea, Chairman/Managing Director, Lee Group of Companies, an industrialist, in this interview with our correspondent, spoke about his newly completed oil and gas production plant, the difficulties in Nigeria’s business climate, the benefits of the Local Content Law in the oil and gas sector as well as what Nigeria stands to gain with full implementation of the law.
Excepts:
Focus of the plant
This facility is dedicated to produce high pressure vessels, heat exchangers, gas-heat exchangers, water bath heaters, glycol, skits and other items that will help in the oil and gas sector. It will also help the gas component of it very well.
If you look around the oil and gas sector, most production in this sector are done outside the shores of this country and if we fold our hands and wait for government’s foreign friends and partners to transfer technology to this country, I don’t see that happening, considering the market situation. If they transfer technology to you, the question to ask is, who will be buying from them? So they will be reluctant to do that.
So, we decided to key into the local content policy of government, which was enacted into law in 2010. We decided to quickly acquire a place, expand the facility to create that department and go into the production of these equipment I just mentioned to you. The first move we made with our European partner, which is one of the biggest in the whole of Europe (they service the whole of Europe, America, Middle East and China markets), was to discuss the setting up of this modern facility and they keyed in immediately. They said indeed this is what Nigeria needs to help boost the oil and gas sector. This particular company I just mentioned, VDNKDI of Netherlands, we have been in partnership for the last 10 years and it’s been smooth all this while.
So far, 50 of our technicians and engineers have been sent to the Netherlands for training. By the time the facility will be commissioned, others will be sent to the Netherlands for training in marketing of the products and the rest. All the equipment that will produce all these facilities are already in place and will be ready for commissioning between March and April 2018. We are optimistic that Mr. President will do us the honours and commission the project.
So far, we have invested over $100 million on this project. The land we acquired was a swampy area, we sand-filled the area and built a very massive structure; the space this facility occupies is about 4,000 square meters. By the time the facility is commissioned, you will see the value it will add to the economy of this country. We are going to train more Nigerians and there will be multiplier effect in the economy as those trained will also train others thus saving foreign exchange. We are also going to have a lot of suppliers who will be supplying us different equipment. This will further help to promote local content and empower small local businesses in the country.
If we think somebody from outside will come and fix our problems or fix our economy, we are not serious. It may never happen, not in this our present generation. I just felt I should contribute my quota to the development of this country, that is why I went ahead to establish Lee Engineering and this new production plant for the oil and gas sector.
Investing in the plant
You know I have been in this industry for almost 41 years. I started as a worker and worked for 14 years before I established my company. The company is 27 years old. If you add 14 to 27 that’s 41 years. Nigerians are very skilful, passionate about work and very patient but if the job is not available, is not their fault. We have seen the inflow of foreigners who are technicians and welders into the country and we decided to encourage our fellow Nigerians to learn from them. Nigeria has the best welders, the best fabricators in Africa, the best pipe fitters and other technicians in various fields. So we tried to bring them together and retrain them. Some of them we sent to Petroleum Technology Institute (PTI) for training before bringing them to our facility to practicalise what they learnt.
So we are looking forward to the commissioning by Mr. President and to getting patronage from International Oil Companies (IOCs) and operators because if they patronise us, Nigerians will be the beneficiaries. It will help in improving employment in the country and boosting our economy as well as empowering suppliers. Many more Nigerians will grow in business, add value to our economy, increase our internally generated revenue and so many other things. We have to be patriotic and promote Nigeria, encourage our local manufacturers; that’s the only time foreign investors will be attracted to come and invest here and help develop our nation.
Challenges
The challenges are enormous. There are the community challenges, bank challenges, power challenges and no tax holiday, among others. We are paying community taxes and the moment the community attacks you, there is no help from government to protect you. We have had to settle the community from the little we have in order to operate in a peaceful environment and things are not supposed to be like that. For example, I spend well over N50 million on diesel monthly to run my business; that is a lot of money. So if I can have support from government as a form of encouragement; maybe enjoying a form of subsidy in my purchase of diesel, it will go a long way. Or if I can get good payment plan and good interest from the banks as a way of also encouraging us to remain in business, that will go a long way too. But sadly, we are not getting anything. We are not getting any exemptions from the raw materials we bring into the country for our business. This is not encouraging.
Appeals to government for conducive business environment
Well, our appeal to the government is for them to first of all come and see what we are doing. Some of them have come to see what we are doing but their visits end with few remarks and that is all. No commitment, no patronage and if we don’t have patronage, those we train will be redundant and that knowledge will be lost. For a government that is keen on creating millions of jobs for our teeming youths, businesses like ours should receive encouragement, not just because of the huge investments but also because of the multiplier effect it will have on our economy. We are talking of diversifying the economy from oil; aside agriculture which the government is focusing on right now, there are other critical sectors that should also attract the interest of government.
If you go to other countries, companies like ours trying to boost the economy, take youths off the streets and thereby reduce crime on the streets, are supported but unfortunately, we are not enjoying that at all. So we need support from the federal, state and agencies of government and even from other private sector players because we are helping to develop our economy. The benefits and multiplier effect of this support and encouragement will spread round the economy of this country. Many governments in other climes are seeking to have such investments like ours.
The Local Content Law is good for Nigerians. That initiative has helped the country to save a lot of money. Some of the things Lee Engineering is doing today are what these multinational companies were doing in those days before the law was enacted. They took us as one of their subcontractors and initially we were given a fraction of the job to do and we did it far above their expectations. But the bottom line remains that they will never put any structure here. But Nigerian investors have taken it upon themselves since this law was enacted to ensure it is effective so that the country will reap the benefits by putting up investments like ours that will help this country for years to come.
Investing offshore
We are targeting to export to other countries. We have refineries in Angola, in the West African sub-region and from there we will expand to the Middle East and to other parts of the world. But the journey of a thousand miles begins with a step and that is what we have done. I am saying that we want government to give more power to the Nigerian Local Content Management Board to ensure that Nigerians fully participate in any investment, expansion, greenfield to be established in any part of this country. It is from there that our people will learn, it is from there our people will build capacity, learn on the job, and also the government will save half of what is meant to originally go to foreign companies.