By Margaret Nongo-Okojokwu,
The Nigeria Content Development Monitoring Board, NCDMB, has promised to support Kabelmetal Nigeria Plc (a Nexans affiliated company), with funds required to manufacture shipboard, umbilical, refineries and petrochemical LV cables in the nation. This extension of Kabelmetal’s new capacity to manufacture shipboard cables and umbilicals for the offshore market has received commendations by the Board, as it has pledged support to boost local ability in the petroleum industry.
The Board’s Executive Secretary, Simbi Wabote, expressed satisfaction over the new capacity during a facility tour of the company recently in Lagos. He noted that many are not aware that the petroleum industry consumes a lot of cables in their business, citing that the number of cables that run through a Floating Production Storage and Offloading (FPSO) can be mind blowing. According to him, contrary to general perception that cables are meant for building alone, a lot of it is used in the oil and gas industry to support instrumentation because all digital process have to pass through signal cables going back and forth. Wabote said with their tenacity and foresight to look at the market opportunities in the sector, it behoves on the board to work and encourage them in the industry so that the capacity can be domiciled in country. He however said due to the very high capital intensive and risky nature of the industry, quality and standard, which are among the Board’s objectives won’t be compromised. “But I’m happy you participated in the Egina project, and it shows that you have met the industry’s standard.”
The Executive Secretary said that part of what the NCDMB is doing to keep companies like Kabelmetal going is visits like the facility tour with key players in the industry. He noted that often times, it has served as a meeting point for both project team managers and indigenous manufacturing firms. Adding that more often than not times project team managers are amazed by the capacity of some of the indigenous companies. “We have recorded so many successes with this kind of visit where some companies come later to confess that they never knew that such capacity exists, Wabote said. To a large extent, it has been very, very productive. “We will continue to support them also financially with the launch of $200m Nigerian Content Intervention Fund which of course is open to all contributors to the fund. I am sure that the likes of Kabelmetal are contributors to the fund by virtue of the contract they get from the oil and gas industry.
Wabote also noted that the intervention fund was initiated to ease the industry operators of the financial issues that it faces when dealing with the financial institutions. “So, they have the requirement to also take part in applying for that intervention fund which has 8 per cent interest rate, five-year tenure, maximum limit of $10m. That is part of what the Board is doing to support them financially. Because of some of the financial challenges these companies face, the fund was launched to support businesses like this that has the potential to employ Nigerians and to retain the much needed foreign exchange in the country. Encouraging contractors and project managers to always look inward while sourcing for materials, Wabote said that the indigenous companies have the capacity to meet their demands.”It is always very easy when you import. We have always told the companies to say if you argue that the production doesn’t meet your specification,
work with the manufacturer and tell them what is required and I am sure any business would want to do what they can to meet the specification of the industry because one of the objective of the local content is that it does not compromise quality and standard because our business is very high capital-intensive and risky and so once standard are lowered then we would lose everything that have been invested. During his presentation, the Chief Executive Officer, Kabelmetal Nigeria Plc, Robert Kretschmer, said the shipboard cables is a specific design no company in the country is prepared to go into its production because of the technicalities and investments. He said the company considered that kind of cable design during the Egina project, “so we used the time and experience of what happened on the Egina project to develop our skills and know-how and with our detailed analysis, we are ready.”
Kretschmer explained that the logical next step to expand the company’s local content scope from making electrical quads would be to manufacture an economical scope of complete smaller sized umbilicals and flying leads. He added that the electrical quads in the umbilicals can be manufactured at Kabelmetal in line with a detailed know-how transfer and investment plan, developed together with Nexans Norway AS (affiliate company). The Kabelmetal Boss enumerated the various successes the company has made as well as its challenges. Kretschmer who stated that the company is committed to expanding its local content scope, called on the NCDMB’s support, he noted that they have more orders than supply but can only use the money they get to re-invest on material then go gradually to meet up with the finances available. According to him, “The challenge of manufacturing business in Nigeria is not so simple and its known that manufacturing is probably the most difficult aspect of business in Nigeria because we have the highest exposure in terms of financing because you get your own raw materials, you start producing to sell before you get your money so we are much more exposed to the finance side.
“Since the naira devaluation, things are not going like before and banks are barely giving money when you look at financing your business because if you want to buy forex you must put deposit in the bank , you cannot use your over draft or import finance facilities to buy anything. This has brought down the whole economy in Nigeria, oil manufacturing companies are heavily affected”, he said.