Amuchie: Preference for Foreign Firms Results in Capital Flight
In this interview with Ugo Aliogo, the Chief Executive Officer of Convitech Group, Mr. Princewill Amuchie, speaks about the challenges facing the construction industry, the company’s contribution to the growth of the industry and what needs to be done by
What is the vision behind Convitech Group? Convitech group is the family name for the various companies which we use for road construction support services. It comprises traffic warehouse, and other companies that we have. Actually, Convitech is an aspect of our company involved in road marking and the installation of all the devices, while traffic warehouse is into the sale of the devices that we deploy for traffic signs. The whole idea was born out of the fact that in the course of carrying out our business, we realised that there they were substandard materials in the open market, which most clients complained about. As a company, we decided to think of ways of getting some of these materials which are not produced here in Nigeria. This was what gave us the needed push to go in search of genuine and quality devices which could stand the test of time.
What were those substandard products that you decided to import into the country? We have realised that some of the traffic signs placed on the road don’t last long; after one month the signs are erased out of the road. The reflection which it is supposed to give on the road will not be there again. What this implies is that they are not of good standards. For instance, the road marking paintings that we use for the road are not original. Within three months, the paints get cleaned off. To address this issue, we embarked on research to find out good companies that produce high quality paints internationally. This is what we have been doing over the years.
In which market do you purchase these products?
I buy products from Germany, United States and Holland for now. We have been doing this consistently in the last three years and we have not had complains from our clients.
How do you break even considering the challenges of forex?
We started stocking our warehouse before the economic recession. Therefore during the recession period, we had reasonable quantity of stock. The bottom line is that though we have not made great profit. We are still in business in spite of the profit margin.
What giant strides have Convitech achieved in the last three years? We have made giant strides in the areas of airport and road markings. Presently, we have one of the best equipment for airport and road marking in the country. We ensure that the equipment is used to render professional services in line with international standards. We use the best hands for the job. The operator of our marking machine is a German. We have handled major construction projects such as Benin/Ore expressway, even though it stopped at a point. We are hopefully that it will continue very soon. We also handled the Lokoja/Abaji Expressway. For us, that is a project, which speaks for itself. For the past two years, the road marking is very fresh and it is a point of reference to other road marking companies. We have also done some traffic installations for some states in Nigeria. Last year, we handled the runway marking of the Hoe Airport in Volta Region, Ghana. This shows that it is not only Nigerians that have seen the quality of our work, but neighboring country also. The airport was inaugurated by a former of President of Ghana. Recently, we handled the Abuja International airport runway marking. I can confidently say that the Abuja airport has been a success story. The project has opened doors of opportunities for us. Prior to that job, Julius Berger Nigeria Plc interviewed a lot of indigenous companies, but our company was chosen because of our track record. On our part, we ensured that we lived up to the standards expected of us by Julius Berger. We ensured that we finished on time. Due to the timeline given to us, we ensured that we finished the project two days before the promised date using high quality equipment. It was a landmark achievement for us. We have had other contracts since the Abuja project. It is high time Nigerians started investing confidence on indigenous companies because they can operate at the same level with foreigners if given the needed support.
What unique qualities do you bring to the market that sets your company apart from close competitors? As a company, we have been focussed on bringing in quality, timely delivery and professionalism in terms of the type of staff we parade. We have invested so much in improving our human capital through training abroad. We have tried to update ourselves in the current trends in road marking. We have proved our mettle in this area. We have not disappointed in the projects we have handled. We have delivered on time. If you go to Reynold Construction Company (RCC) and ask for records they will tell you that we have performed excellently. We have not reneged in our promises and we have not done any shoddy jobs. Our jobs are more practical. It is a simple logic, when you deliver satisfactorily, you will be given more contracts. Our Nigerian engineers have not proved their competence in the projects they handle. There is a wide gap between a job done by a foreign company and a Nigerian company. Therefore indigenous companies should focus on reaching for perfection.
Why does government prefer to outsource major construction works to foreign companies than local companies? This explains whether as a nation if we are prepared for growth and technological advancement. I will like to say here that the indigenous companies have not been able to build a level of confidence in the hearts of Nigerians in order to undertake this huge project. Some indigenous companies have been given contracts and the contracts didn’t meet the expectations required. Another challenge here is the right skill set. We have a type of education that is theory based, not practical orientated. To correct this, we need to have the right legislation in place. We need to have some skilled graduates in key position to take these decisions, which affect the industry. We have a long way to go in the area of road infrastructure, however our engineers are trying. But they need to step up especially in professional practice. Yearly, my staff and I go for training abroad in order to update ourselves on the latest developments in the industry. Every November, we go to Hamburg, Germany for these trainings.
How should government encourage indigenous construction companies to grow? If government wants to encourage local companies, it should ensure it sets in place the right legislations; set aside certain positions which foreigners are not meant to occupy. If the foreign companies handle every aspect of a road construction contract without outsourcing certain areas to local contractors, it implies that there is 100 percent capital flight. There should be some left for the indigenous companies because with that there is serious transfer of technology. We cannot learn these things by looking at them do it. We have to be part of it; certain jobs should be left to the local companies. Therefore we need strong legislation in that area.
Last year was a turbulent year for most businesses in Nigeria especially those that deal on forex. How were you able to cope with the issue of forex? Last year, we didn’t engage in importation because of the high cost of forex and the challenge of getting it. For us, we relied on stocks we had in the warehouse. This helped us not to embark on any importation. We are still making use of those stocks. However, we are thinking of how to re-stock especially with the gradual drop in the price of the US dollar.
What was your growth projection for last year; were you able to achieve it? Last year was challenging for us. We didn’t achieve our growth projection. The last two years have been very turbulent. For 2017, we are very optimistic. The budget was passed recently and we are looking at the figure allocated to the Ministry of Works. We have the belief that this administration is focussed on the development of the real sector. This is the only way we can come out of recession quickly. We commend the government for such feat and we hope the budget will be implemented to the latter. In the area of local content, what should government do to encourage local manufacturers? Government should begin by encouraging local companies; by giving them contracts to try their hands. We should stop having this feeling that they cannot do it. If we are determined to get the best out of them, then we should give them the opportunity. There should be some engineering projects given to these local companies and comparison should be made what they have done and with the foreign companies. It is a gradual process which I believe we will get right.
What is traffic warehouse all about? Traffic warehouse is a one-stop shop for traffic and safety needs. We have proved that we have what it takes in the area of road furniture and safety. We have worked with many construction companies, individuals and private organisations in the area of provision of some these devices, thereby making the devices readily available, at a very good price and quality. When we talked about this idea, nobody knew what we were talking about. Today, traffic warehouse is a success story. We are making other giant strides in the area of awareness. In 2015, we launched our traffic and safety school. The project was aimed at raising awareness on the right use of those devices. We are already recording our content for television. We have been on radio and very soon we will be on television. We are partnering the Lagos State Government, Vehicle Inspection Officers (VIO), and Lagos State Traffic Maintenance Agency (LASTMA). We are bringing our resource persons from various government agencies who will lecture Nigerians on the traffic signs and signals what should be done.
How can we use traffic signs to curb road crashes? Each of the traffic signs have one message which it is passing to the driver. Part of the reasons why we have accidents on our roads is because of the knowledge gap especially in understanding traffic signs and following the instructions. Therefore traffic warehouse is here to fill that gap and become a bridge between the driver and the pedestrian.
What is your advice to government on how to improve road infrastructure in Nigeria? Having a good maintenance culture is one way we can improve on road infrastructure in Nigeria. The Abuja airport was built a long time ago and nothing is being done to maintain the standard of the airport on a regular basis. In the developed world, road marking is a regular activity, but in Nigeria once the road is fresh we mark, re-marking is not done on the road again when necessary. The duration of every road marking is one year depending on how busy that road might be. But if it is a very busy road, six months you should come back to re-mark. Road marking is a safety measure; therefore it saves a lot of lives on the road. We should have a way of monitoring the quality of jobs done on our road. What I mean is that the government should create a monitoring team that regularly keeps an eye on the traffic signs to ensure that they are in order and they are not sabotaged by the public.