Now is time to ban im­ported wires - Cole­man boss

Daily Trust - - BUSINESS - From Kay­ode Ogun­wale, Lagos

How has it been with Cole­man so far? Cole­man Ca­bles and Wires Lim­ited is not a young com­pany, we have been in busi­ness since 1975, we started as a small com­pany and we've man­aged to grow the busi­ness to be the largest cable com­pany in the West Africa Coast. Ba­si­cally it is our vi­sion and mis­sion that is keep­ing us in busi­ness be­cause there are a lot of chal­lenges in do­ing busi­ness in Nige­ria, but up and down either way the cable industry has been a good industry for us. We've been very suc­cess­ful as Nige­rian be­cause of our be­lief and pas­sion for Nige­ria dream.

This is an en­gi­neer­ing firm that we have done very best as Nige­rian, we've built the busi­ness from small scale industry to its cur­rent stage be­cause we look at Nige­ria as a mar­ket on its own where there is al­ways pos­si­bil­ity.

What is the ob­jec­tive and vi­sion of Cole­man?

Our vi­sion is to make Cole­man wires and ca­bles a place to look for in West Africa in terms of qual­ity, stan­dard of cable and de­liv­er­abil­ity. To make our vi­sion pos­si­ble, our ob­jec­tive as a com­pany is to make our prod­ucts avail­able in ev­ery re­gion of this coun­try. We see our busi­ness ex­pand­ing mas­sively be­cause the key part of our vi­sion is to make the de­liv­er­able of cable avail­able every­where in the re­gion, in the coun­try and West Africa at large. Also we see our­selves not only Nige­ria com­pany but as a com­pany to reckon with in Africa.

Is there any plan for you to di­vest your busi­ness from wires and cable?

There are al­ways op­por­tu­ni­ties, if you look at the busi­ness for long term you al­ways have dif­fer­ence port­fo­lio. Cole­man is go­ing to have dif­fer­ent in­te­grated port­fo­lio that is hav­ing some­thing to do with cable. We started with house wiring cable, lat­ter we moved to power ca­bles, from there to high volt­age pro­duc­tion and mak­ing us only the sixth com­pany in the con­ti­nent to make high volt­age cable. We have a cable fac­tory which is only one in West Africa, we pioneer many things in the industry and we are go­ing to pioneer other prod­ucts that have in­te­gra­tion into the industry. We see our­selves be­ing a so­lu­tion to power industry, ba­si­cally ev­ery ac­ces­sories that have to do Gov­ern­ment at­ti­tudes to­ward lo­cal pro­duc­tion of wires and ca­bles have been con­demned due to lack of pa­tron­age by the gov­ern­ment. In this in­ter­view with Man­ag­ing Di­rec­tor of Cole­man Wires and Ca­bles Lim­ited, Mr. Ge­orge Onafowokan said it is un­for­tu­nate that Nige­ria has ca­bles com­pa­nies that are key to power so­lu­tion but gov­ern­ment jet­ti­sons them for made in abroad. Ex­cerpts: with cable will be part of our busi­ness over the long term.

Is there any prob­lem fac­ing Cole­man and how do you in­tend to tackle them?

The pe­cu­liar fun­da­men­tal prob­lems with ev­ery manufacturing com­pany in Nige­ria are poor in­fras­truc­ture, bad roads and poor power sup­ply. As Nige­ri­ans you can­not wait for gov­ern­ment for every­thing oth­er­wise noth­ing is go­ing to hap­pen, we have to gen­er­ate our own power. To­day we in­vest so much in gas power gen­er­a­tion, we in­vest in in­fras­truc­tural de­vel­op­ments. All th­ese serve as hin­drance to our busi­ness be­cause it is cap­i­tal cost, in other coun­tries busi­ness owner will not take all th­ese as part of their projects. Look­ing at the startup cost or ex­pan­sion cost in Nige­ria is heavy on the hand be­cause you have ad­di­tional 20 to 30 per cent go­ing into power and in­fras­truc­ture that un­der nor­mal cir­cum­stances should not be part of your project cost. Cur­rently we are do­ing a multi-bil­lion naira project but we are spend­ing 20 per cent of that money on power, that does not help, it hin­ders our abil­ity as in­vestors, it hin­ders our abil­ity to put to­gether our project. In­vari­ably gov­ern­ment sup­posed to pro­vide ad­e­quate in­fras­truc­ture that will en­able us to do our busi­ness. Al­though our on­go­ing project Arepo 2 can be seen to be part of gov­ern­ment ini­tia­tive be­cause this is a part­ner­ship with Bank of Industry and that has helped. We need sin­gle digit or lower than sin­gle digit in­ter­est rate for projects to be sus­tain­able es­pe­cially when the cap­i­tal cost is high on in­fras­truc­ture, that doesn't help our case. I be­lieve the new gov­ern­ment has a lot to do and we've seen a bit more sta­bil­ity in the econ­omy be­cause cer­tain dis­ci­pline has been proved which I con­sider we will see it ben­e­fit to­wards the next year and above.

Apart from BoI in­ter­ven­tion, how do you source for your funds?

We get loans com­mer­cial banks, from

90 per cent of our funds are com­ing from com­mer­cial banks es­pe­cially work­ing cap­i­tal. High in­ter­est rate to­day es­pe­cially with what hap­pened on TSA and dol­lar crash makes it ex­pen­sive to bor­row money, banks are lend­ing in high dou­ble dig­its and that's not help­ing econ­omy at the mo­ment be­cause the higher we are bor­row­ing our cost, the more dif­fi­cult for us to think of ex­pan­sion of the cur­rent busi­ness. To­day Cole­man is em­ploy­ing over 300 peo­ple and with on­go­ing ex­pan­sion we ex­pect to in­crease our staff base to over 500 and we have abil­ity to em­ploy over 8,500 peo­ple if we run our all fac­tory fully, we are run­ning it around 30 per cent, we can run at full ca­pac­ity if gov­ern­ment is pa­tron­iz­ing lo­cal busi­ness. Real sec­tor can de­velop Nige­ria econ­omy if the gov­ern­ment de­cided to fo­cus on those com­pa­nies that can cre­ate em­ploy­ment and gen­er­ate more jobs. For real sec­tor to ex­pand and cre­ate more jobs gov­ern­ment needs to re­duce cost of bor­row­ing, com­mer­cial bor­row­ing can­not sus­tain manufacturing com­pa­nies be­cause it is very ex­pen­sive and is not help­ing us if they can­not find the way of bal­anc­ing the cost of funds.

Nige­ria is try­ing to im­prove the state of power gen­er­a­tion, trans­mis­sion and dis­tri­bu­tion don’t you think this should be of help to your busi­ness?

Pa­tron­age should be the best thing in our industry but it is not, this is the rea­son why the industry is not grow­ing like other in­dus­tries. Pa­tron­age for lo­cal busi­ness es­pe­cially for gov­ern­ment is very poor. There is no zeal by lo­cal man­u­fac­tur­ers to go and look for gov­ern­ment pa­tron­age when you can­not guar­an­tee of pay­ment. In­vari­ably it has im­proved but un­til we are in a sit­u­a­tion where we can en­sure that power so­lu­tion is seen as in­te­gral part of Nige­ria. We need to look at it holis­ti­cally that what can we pro­duce, how many com­pa­nies pro­duce me­ters, how many com­pa­nies pro­duce cable, how many com­pa­nies pro­duce steel and source for th­ese items lo­cally then the cost of putting power in place would be cheaper by do­ing this we are cre­at­ing more jobs. We have a lot of work to do on power but we are not con­cen­trat­ing the so­lu­tion to our­selves, we need to con­cen­trate more so­lu­tion to our­selves. When our gov­ern­ment doesn't look in­wards for its own so­lu­tion on what it needs to do and we are im­port­ing every­thing, it's sad when you see im­por­ta­tion of cable is done at zero duty to sup­port the power project and we ig­nored cable com­pa­nies in the coun­try.

Is it that Nige­ria ca­bles are of low stan­dard to im­ported ca­bles or what is the cause?

To­day we are very happy that ev­ery­body knows that made- in- Nige­ria ca­bles are bet­ter than any im­ported ca­bles.

Is it that gov­ern­ment doesn't know that Nige­ria cable is bet­ter than im­ported ca­bles?

Gov­ern­ment knows, they were part of NIS/ SON stan­dard cam­paign de­vel­oped by both the cable industry and the SON. The stan­dard are high, the cable qual­ity are high, Cole­man in this industry is a known good qual­ity, de­liv­er­abil­ity but what is the es­sen­tial prob­lem is that the lack of pa­tron­age and pa­tri­o­tism by gov­ern­ment.

Cole­man has the ca­pac­ity to do what­ever quan­tity they want, and we are still ex­pand­ing be­cause we be­lieve one day gov­ern­ment we see it that we can do what they are im­port­ing from abroad. We have ex­panded al­most 1,000 per cent than any other com­pany in the his­tory of Nige­ria cable industry and we have done that within five year pe­riod. Our own is to show the gov­ern­ment it is pos­si­ble to do lo­cal, we've done some oil and gas projects for the lo­cal, the pri­vate sec­tor is driv­ing our busi­ness, but gov­ern­ment is not, gov­ern­ment should be driv­ing the cable industry. To­day Nige­ria with huge pop­u­la­tion should have noth­ing less than 40 cable com­pa­nies if the gov­ern­ment is do­ing it right and they should all be very busy. We've many cable com­pa­nies, open and closed down over the last 40 years be­cause the gov­ern­ment does not pa­tron­ize in­dige­nous cable com­pa­nies. It is un­for­tu­nate that we have an industry that is im­por­tant to so­lu­tion of power and we don't bother about them, un­til when gov­ern­ment and its agen­cies fo­cus on busi­nesses and have a lo­cal con­tent law that our power industry can im­prove. The min­istry of power has no in­cen­tive to buy cable from lo­cal man­u­fac­turer. I think it is time to get ban on cable im­por­ta­tion, may be our cable industry will grow bet­ter as it is in the ce­ment industry.

Mr Ge­orge Onafowokan

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