Bimbola Oyesola
Within the few years it has operated, Coleman Wires and Cables Limited has proven that a Nigeria company can indeed create brands that can compete favourably with any other even from the advanced economies in terms of quality and expertise.
That explains why its managing director, George Onafowokan, in this interview with Daily Sun said he was proud that a company that believes so much in the capacity of indigenous companies to use the government’s local content policy to advantage.
His company recently won the Nigeria Oil and Gas (NOG) 2019 Indigenous Company of the Year award, its first in the 18th edition of NOG awards.
Onafowokan noted that what earned the company the honour came from years of hard work and investment by the Coleman team, especially with focus on investment on products that are directly on NOLGIC Act of 2010.
He also proffered solutions to the challenge of epileptic power supply in Nigeria, and his drive to make cables cheaper at reasonable price to Nigerians and other issues relating to backward integration policy.
Excerpts:
At the beginning
Most people taught we got into the oil and gas sector about two years ago, but sincerely we have been in oil and gas business for over 9 years (since the NOGIC act of 2010) quietly pushing the business into recognition.
A major move by the company was the opening of its first high voltage factory in Nigeria in 2014; which was and still the first investment to directly impact the NOGIC Act 2010 for the local production of high voltage cables.
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 $28million in a high voltage factory.
From 2017, I will say our efforts started bearing seeds under the NOGIC Act with the support of Nigerian Content Development and Monitoring Board (NCDMB) under the current leadership of Engineer Simi Wabote.
Wabote’s support made us to dedicate the award to NCDMB because without their assistance in the last two years, our effort wouldn’t have yielded any fruit.
Since his visit on February 22, 2017 with OIC content managers, directors of NCDMB brought about change that made us believe that as Nigerians, we are capable of delivery better than expected investment in high voltage cable in the country. This prompted huge support from NCDMB and later from IOCs.
It’s been years of team efforts and years of pushing to enter the oil and gas sector that brought about the recognition given to local manufacturers.
The leadership of Engr. Simbi Wabote, and his encouragement caused Coleman to invest and break barriers in local content capacity in the cable industry.
They have helped greatly, especially with what we got since the day they visited our factory.
Though, we made the presentation to NCDMB in 2013 about our project on high voltage production, and subsequently another presentation was made in January 2017 after our request to NCDMB. To my surprise, the Executive Secretary and his management team were available for the presentation.
Engr. Wabote was understandably skeptical based on records of companies claiming in country production, but who are not actually producing.
In his skepticism, and I will never forget the statement he made to the effect that he hoped ours was not one of the presentation with a lot of Photoshop saying he had seen quite a lot of them who are not real.
I told him to give us 24 hours and maximum of 48 hours notice that we shall open our doors to him for visitation and verification of all that we stated in our presentation to his team.
The visitation brought about great opportunity for us to showcase how much we have impacted the NOGIC Act, and for the team to see how unutilised our capacity in country for 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 exist in Nigeria.
It was on that same day that the Executive Secretary, Engr. Wabote made a policy statement on cables that no more importation of cables would be allowed by any OIC or any oil and gas service provider in any project in Nigeria.
It was the visit to our factory that led to that move by NCDMB that 100 per cent of cables should be produced locally and procured by companies operating in Nigeria. In the midst of hurdles and the barriers, we just have to keep on working. The Act is so fantastic as it created Nigerian content department within oil and gas sector.
Product quality
NCBMB has been fighting for Coleman based on what they have seen. It has taken over five years of additional investment of over $30 million to yield patronage from the oil and gas industry. Nobody will invest such a huge amount of money on an investment that will start yielding fruit after five years, but Coleman broke every rule book of investment decision making because we believe in the long term prospect of the industry and in the law backing the industry.
Based on what Coleman has shown that can be done in country’s cable industry, NCDMB became fully convinced to fight for the whole industry in order to encourage others to push the boat to patronise locally produced cables and with this encouragement, we started to gain entrance in the IOCs and jobs started coming in 2018.
Why Coleman cable stands out
What made us to stand out is our own internal policy. We pushed limit on it not to import 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 or other alternative power like gas generator, makes it very tough, as you have to make additional provision of about 30 percent of your total investment of the project just for power solutions which is far more than other businesses. So we have to invest far more than other businesses in order to meet up with the expectations of our customers at it relates to pricing.
So far we spent the first couple of years building infrastructure and capacity to the level of tackling our deficiencies and that has worked.
First, you have to do the project before you expect returns. It made us to be above our competitors because a lot of businesses will not place investment above 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.
Investment portfolio
Today some of 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 production line 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.
Local content
In Coleman, what made us to stand out in Nigeria’s oil and gas sector is that we are always pushing the limit in country’s production and availability of cables.
We are an indigenous company that believes a lot in local content.
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, Central Africa and East Africa and we have pushed the limit of that till now and are moving it in SLP and marine cable production which is our next face of production.
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 IOC were sceptical earlier, but today, that cable has been tested by the IOC company 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 tested our laboratory were surprised at what they saw and asked if they could be allowed to bring their cables for recertification in our lab.
Some of the equipments in our own lab can only be seen here in this country.
I have a testing lab that cost millions of 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 with anyother anywhere in the world.
I will use the word of . 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 more people will even be willing to cross the sea.
More jobs must be created to reduce unemployment. Our drive is to make cables cheaper and 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.
Solution to power outage
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. That happened because government acted as the regulator and allowed the private sector to drive it.