Abalaka: How Tranos Is Revamping Nigeria’s Power Shortage Through Renewable Energy

To Improve Power Generation in Nigeria, Tranos is Now Delving into Manufacturing of Solar Panels, Inverters

hold the solar panels. If you mount it on the ground, they want to see the lights and installation. You’re still going to need different sorts of mounting. So we produce that. But on top of that, we’re now saying, ‘Look, how can we add more value?’ We see that our next step is to begin manufacturing solar panels.

And our focus is to build a new factory producing 100 megawatts of solar panels per annum. That’s where we are going now. That will greatly help the country because we all know there’s a huge power shortage in Nigeria. One of the solutions that government policy is looking at is driving towards decentralization, which means that any local government that can either work with an investor or find the investment can set up a 50 megawatts or 100 megawatts power plant. There are a handful of mini-grids already popping up here and there. So you can imagine having so many of those. Imagine having 1,500 megawatts of power plants in each local government across the country. That will change a lot of things.

So we think that that’s the way to go. We will start producing our solar panels. We’ll also start packaging the energy storage systems, using battery energy storage systems in containerized units.

So those are the kinds of things that we intend to do to ease up things because for a lot of the solar installation companies, the solar power companies that we have, we see that there’s always the challenge of having to import solar panels, having to find the foreign company to build a battery energy system. So those are things we intend to start doing in the future.

How far have you gone with setting up the Tranos solar panel manufacturing plant?

For this sort of project, we have a lot of challenges. We have a lot of development. We want to site the plant somewhere across the border between Lagos and Ogun states. So, we are currently in the process of acquiring the land. We’ve done our feasibility studies. We’ve done a lot of technical work. We have partners from Europe with whom we are working to develop the product because efficiency and quality are important with solar panels. We don’t manage products. Our products must be able to stand side by side and possibly even be better than what’s currently being imported.

It means that the panels will have to be very high quality and high efficiency. So we are working closely with a good company that is experienced and knowledgeable about this to design the right product and then build the factory. This will certainly help to cushion the foreign exchange challenge we are having because everybody is now finally aware that for us to progress as a country, we are now talking a lot about exchange rate issues, and it’s now dawning on everyone that for us to make progress, we have to be productive. So, the keyword is productive. We have to be productive. We can’t survive depending on other countries to produce for us. Of course, we can’t produce everything, but we have to be productive.

What’s Tranos’ production capacity and the level of acceptability and patronage of your products and services?

So, doing business in Nigeria is not easy and a bit cyclical. If you get something good today, then you have to wait. What has helped us is that, because we have a wide range of products and work with different sectors of the economy, even when one sector is down, another keeps you going. But it’s still not a lot of times we are producing with low capacity. But percentage-wise, we typically run at 30 to 40 per cent capacity. And that’s on average. What I mean by that is, at times, we can go up to 80 or 90 per cent, and then it drops down. And that’s also because what we produce are industrial products. So we are dealing mainly with industrial customers.

So if there is a lot of work in oil and gas and new fuel developments, we’ll probably get a lot of demand. If there are expansions in telecoms, we’ll get that. So, It fluctuates, and we hope it will stabilize, but it’s a function of the environment. So the frequent changes in policy, the policy mismatches you get, and also the general downturn in the economy do affect us, but we keep working hard to try and mitigate its impact on us,

This is part of why, in the past, we have been producing new products to show that if we are not selling a large volume of one, at least we can also complement it with a different product.

How do you guarantee quality products and services for your clients?

We are an ISO 9001 2015-certified company. We’ve been certified for many years now. But besides our ISO certification, we ensure that our products are designed and manufactured according to a particular standard. Typically, it will be an IEC standard, like a European industrial standard that governs how you design or build particular products. Besides that, for various products, as I mentioned in the caskets, for example, we have to do what is called a Type Approval, which means that we design the product to meet the standard through lab testing and have certificates to show for it.

What sort of value in terms of job creation can Tranos boast of?

So, I think we currently have a staff strength of about 180 people. We hope that when we move into our new facility, we’ll probably double that figure depending on the demand for our product. But for us, it’s not just about the directly employed people. There are a lot of indirect people. So, for every employed person, the person has a wife and children. So you need to ensure that for simple things like health insurance, everybody within that family can go to the hospital. But that’s even a sub. It’s not just the number of people. It’s also the quality of the work that you have created.

In five to 10 years from now, where do you want Tranos to be?

Well, I don’t know about 10 years. But in the next two years, our new facility should be running, which means we will produce the best quality solar panels across Africa, supplying them to Nigeria and other countries around us. Other manufacturing operations are running, and we are exporting them across the continent. One key element in renewable space (solar, for example) is solar inverters. So, we should have our own manufactured solar inverters on the market. Then, we should also be going into manufacturing lithium batteries because those are all the ingredients that go into renewable power generation. So, our focus is to continue building and making good products, and with time, we expect that the people currently importing into Nigeria should feel threatened by us. Really, between now and the next five years, we should be solid on the ground doing those things, improving power availability across the country with our products and doing that on an ongoing basis.

From your experience, what would you say are the major challenges facing manufacturing in Nigeria?

I will give you four challenges facing manufacturing in the country. One affects us, but not as much as it affects some other manufacturers. The first challenge in manufacturing in Nigeria is a dearth of the right personnel. Most people don’t seem to talk about it, but if you have good people, they will solve most of your problems, and when I say personnel, I’m not just talking about the people who do the production. For manufacturing, you will typically start with product development because you need to develop the product, set a system to produce it, set a system to market it, and set a system to sell it, then provide after-sale service. So, it’s a long chain of activity. Most of the time, we only focus on manufacturing because you have to develop the product, which will be what customers actually want. How do I make the product appeal to what the customers want? Then, set up a process that can be produced efficiently.

Now, if you go through that whole chain of activity, finding people to do every step of that is very challenging. I’m not saying we don’t have human beings; we have human beings, but people who know what to do are very few. So, from my perspective, many companies are looking for good people. So, when we say that we have an unemployment problem, I think it’s more of an employability problem; the people available are not employable. So, you have a lot of engineers, but how many of them can actually do the engineering work? And if you look at countries where manufacturing is done well, you must also know how to market your product. There are gaps in the technical product marketing space. So, finding good people is difficult across that whole chain of activity. That’s the number one problem.

The number two problem is the supply chain. Now, a part of that problem is people-related. We don’t have many people who actually understand what supply chain means. We have people who just do what I would call fire fighting -something goes bad or is delayed, and you now start running around and trying to solve it. Meanwhile, it would have never happened if you had made a better plan.

Also, a big part of that problem is government-related. If you want to import something today and it’s going through the Nigerian ports, of course, you are going to deal with customs. Customs as an organization is designed to raise revenue, not to facilitate trade. So, a customs person will frustrate trade to increase revenue, forgetting that by frustrating trade, you are jeopardizing revenue generation because it means if you frustrate my business and I make a loss, I don’t pay tax. So the money you get by frustrating me when it’s time to bring I’m my goods, you lose more because I’m not going to pay tax. You will even lose more because I won’t employ more people. So, there is a domino effect on that.

But the mentality of the Customs is, ‘We want to increase revenue. How do we increase revenue? We want to make sure people pay more’. And part of what I’m saying is that it’s not just telling you to pay more in terms of your duties, but you have situations where you bring something in, the duty is five per cent, but because they want to raise revenue, they want to see how they can make you pay 20 per cent. Now, in the course of going back and forth to resolve that, you pay a lot of demurrage.

Unfortunately, in Nigeria, there is no recourse. So, you can’t say Customs have held my goods; let me take it to a higher authority that can quickly resolve the problem. So, that’s a big issue, and that’s just Customs alone. At the ports, you will still deal with SON, NAFDAC, and Marine Police. Talking about NAFDAC, you don’t make any food or drugs, but you will be surprised to know that we make plastic enclosures, and to bring in our plastic pellets, we need a NAFDAC licence. For some of our processes in treating steel, before we powder-coat them, we use chemicals to clean the steel; we need a NAFDAC permit to bring in that chemical. You now have other funny things like when you bring in things, they do an inspection, and so many agencies go to inspect. You go through all that, and eventually, the goods come out. Then, as the truck is coming to deliver to you from Apapa, they get stopped on the way by some group that says they are from SON, but you had SON people at the port who had inspected the same goods. So, you have all those sorts of interruptions in your production. So, it affects your supply chain.

How can the government support the growth of the manufacturing sector in Nigeria?

I don’t have a list off the top of my head, but the objective of anything the government would be doing would be to say, how do we make companies in Nigeria more competitive than our next-door neighbours? Because the reason why we easily buy from China is because they’ve designed a system to sell to the world. So, it goes from some of the things I had explained. Let’s invest in education. You can sit down as a government to say, in the next five to 10 years, I want Nigeria to be the go-to place for solar or anything.

The first step is getting as many people as possible educated at all levels of solar knowledge. If you want it to be software engineering, do that. So, all these things have to be built. So, when you find a particular county doing well in a particular area, it’s usually not a mistake. It was a deliberate effort made to build things in that area. So, if you want us to be a good manufacturing destination, first, you must make sure that if anybody lands here and wants to set up a factory for making anything, the kind of people he would need are very much available. If not, is he going to spend 90 per cent of his time looking for those kinds of people? That’s important. So, the government has to deliberately decide to say we are going to take education seriously because that’s the bedrock of whatever we are going to do.

The second, of course, is to look at the impact of government regulations and policies on the manufacturing sector. I’ve said the KPIs of the Nigerian Customs is revenue generation, not trade facilitation. So, they actually do not keep an eye on trade facilitation. So, rather than saying that the KPI of Customs should be about the turnaround time. How quickly do containers arrive at the ports and move out? Or what’s the volume of goods that come in and leave the country? If you use that as the KPI, they will keep an eye on saying we need to ensure that more things move out of the country. But that’s not the KPI of the Customs. So they are measuring themselves based on how much money they collected, and all their focus is on that. Nobody is asking whether companies have died in the process, raw materials that were imported spoilt, or agricultural

And our focus is to build a new factory producing 100 megawatts of solar panels per annum.That’s where we are going now.That will greatly help the country because we all know there’s a huge power shortage in Nigeria