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Nigeria’s business environment discouraging manufacturing – Akindele

Nigeria’s business environment discouraging manufacturing – Akindele

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Mr Adeola Akindele is the Managing Director, Pera-Beam Limited, formerly a subsidiary of UACN. In this interview with MAUREEN IHUA-MADUENYI, he says the economy will grow faster if the challenges limiting manufacturing are tackled

What can you say about doing business in the country?

It has been tough. That is the situation of things especially for those of us involved in importing and rendering of services.

The logistics of clearing goods from the port is there. Thank God for the exchange rate that has been relatively stable over the months. But logistics, moving things out of the port and getting our men to locations to carry out services on equipment, has been a tough one.

The situation of the roads when moving goods is a challenge, the state of power supply too. Up till now, we rely heavily on generators to provide service, and every other infrastructure needed for business is provided by investors themselves. It is not a good one at all. But we are taking it as part of the operating environment and we are coping. But we are hoping that things will get a lot better.

You mentioned the challenges you face at the port, which others face as well. What is your take on what is going on at the Lagos ports and what would you suggest as the way out?

The situation at the port is chaotic but it is not irredeemable. All over the world, big ports have issues. But most of the issues are man-made. There was a time they created inland ports for clearing of goods but above all, the roads to the ports are bad. This worsens the issues.

The way we operate our ports, too, are not sustainable. The processes are too complex and should be streamlined. We know certain security measures need to be put in place and we should not make it look as if there are no solutions. The haulage price has tripled because everyone knows that the turnaround time of one or two days has become one week.

Some of us are also unnecessarily paying demurrage and it is not palatable. The solution is to fix the road and streamline the process to reduce the turnaround time; we can’t continue like this.

The government can also develop other ports across the country; goods cannot be coming to Lagos alone. Above all, corruption should also be tackled because it is one of the major reasons the ports are the way they are.

There have been calls for local content development to boost the country’s economy. How is your company incorporating this into its business strategies?

We need to look at the sector where we play; it is technology-driven and a lot of the products we bring in, we don’t produce them here. We are not even manufacturing the spare parts. The best we can do, which we are planning, is to start assembling some of the units.

The spare parts and other things will still come from overseas but we want to see how we can fit into the value chain. The best we can do now and which I think government policies also support is to start bringing in completely knocked down products and reassemble them here.

We also need to prepare some things in this area. One is the manpower; do we have the manpower? That is a big challenge, which is why we set up our training school where we train artisans, technicians and engineers in order to fill one role or the other either where we are doing the assembly or installation of equipment as the case may be or where we need to do design or find solution to a particular building. We are doing that with the support of our partners.

Generally, the environment is not too encouraging for manufacturing from start to finish. The issue of power is still there because at the end of the day, if at all you have the expertise to do it here, are you going to be competitive? Here, we have a situation whereby if you add your cost to the end product, you will not be competitive.

Today, if you go to our markets, virtually everything is imported. In this industry, we want to add value by doing local assembly over time. We are already in the process and negotiating with our partners. Within the next 12 to 14 months, we should start the process.

What can be done about the dearth of manpower and training of artisans that you talked about?

It is a tough one; we have had to train them over and over again, some from schools and others from the streets. We exposed them to our processes. For us, we have realised the need for us to retrain because even some of our technical schools graduates still need to be trained.

When it comes to construction, a lot of skills are required for professionals to be detailed. The quality of work you get from our people if you just bring them in and give the job to them is going to be costly and embarrassing. We have a scheme to retrain and ensure our employees go through the rudiments of what we do.

Even our university graduates too need training and reorientation or induction. I wish our educational system was such that some of these graduates had been taken through some of these things during their study years.

Maybe the curriculum needs to be upgraded because outside the country, you will realise that students straight out of school are already exposed to some industrial practices. In fact, while they are in school, they are taken through professional courses that enable them to come out and fit into the industrial setting but we don’t have that here.

It gives me a lot of concern because I see no reason why one can go to school for 12 years, spend a lot of money and not get anything that he can call a skill that he can live by and enable him to put food on his table.

People are always quick to blame the government when it comes to skills acquisition. Do you think there are things the private sector and individuals can do to improve the situation?

Yes, I think we can’t leave everything to government really but the government should kick-start the process. There are roles for us, the employers. There are roles for even schools and if there are non-governmental organisations who are interested, they can do something.

Our mentality also should change from just going to school to earn a certificate. Until we change that orientation, we won’t get to where we really want to be because it is amazing nowadays to see some have realised the need to acquire skills; even graduates are going into vocations and it is helping them a lot.

It is dependent on the individual really; they must realise it is not all about their certificates.

Your company is also into fire protection and building energy management. What in your opinion are the leading causes of fire and how can these be prevented?

The world over, there is what they call building code and where we have it. It is enforced and stakeholders are made to comply with its content. But I have realised that in this part of the world, we take a lot of things for granted. If you are in a public building for instance, or even school and hospital, it is mandatory that you have equipment to detect and probably prevent fire outbreak.

Here, you go to an event centre where you gather hundreds of people together and there is nothing ‘in case of emergency’. It is part of building regulation to say commercial or residential buildings should put certain things in place. A four-storeyed building being used for commercial purpose should have a fire detection and prevention system in place.

When we talk of building management system, it depends on what individuals can afford but it is just to help optimise the use of energy. Some commercial buildings have actually adopted this. These are buildings that are energy rated but not everybody can afford it. It is part of technological development. It also in a way helps energy consumption in an integrated system. You can monitor what is happening in a building and even monitor it from anywhere. You can also measure the use of energy.

There should be incentives to make people look into this. There are some areas in the country where people still believe that the government should take responsibility for their energy consumption but there is nowhere in the world where energy is given for free.

A lot of businesses fizzle out after some time but Pera-Beam is over 50 years old now; how have you been able to remain in business all these years?

I will say that the pedigree that the company had coming out of UACN sustained it in terms of our clientele base as well as our training of our people. Even when the company was taken over, we have had a resilient board of directors that had ensured that the company kept going and are willing to do all that is necessary to ensure that it keeps going.

The chairman also ensures it keeps going because many times, he had to provide intervention here and there because I must say the environment has been tough. Some of the companies we did business with in the past years have packed up and some of the initiatives we are taking now are as a result of the support from the board of directors.

We must also give kudos to our longstanding customers or sister companies in the UACN and who have developed over time and helped to also sustain our business. The previous management also took strategic steps to contain some business hazards. It hasn’t been smooth but things are looking better because we are moving from one level to another.

We have launched another brand of air conditioner and the scope is from residential to commercial. We have also gone into renewable energy – street solar lights, pumps for community water supply and we have gone to some remote areas to do this. Some individuals have done this for their communities and some did it for their homes irrespective of whether they have power from the grid or not.

We are also working with some higher institutions that need affordable means of illuminating the campus at night without running generators.

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