In this interview with KAYODE ADELOWOKAN, the Managing Director of Mikano International Ltd., Christine Farine, discloses that his company has achieved 40 percent local content in its products, with a target of 55 percent in the next five years. He also speaks on the various diversification projects of the company and raises hopes that many manufacturing companies that Nigeria for neighbouring countries will soon return in droves.
Today I can say that Mikano is a Nigerian company, manufacturing, assembling power generators. It is the main business of the company. We are not dealers, importing manufactured generators. We are importing the main components from abroad, mainly from UK after which we do the assembly, the manufacturing of the steel sound-proofing, steel frame, and the steel control panel. It is really a Nigerian product with UK-made, Europe-made key components; assembled and manufactured here in Ikeja.
What percentage of your generators is locally sourced?
As at today, we have local content of 40 percent. Our goal is that in the next five years to increase the local content to 50 percent or 55 percent. To manufacture the key element, which is the engine and the alternator will be difficult to build in the country, but that is the goal in the nearest future. We are also playing big in gas generator. To be environment-friendly, reduce air pollution, everybody is moving towards gas generators.
It also has efficiency. The people move from diesel engine to gas generator, especially in industrial sites. For cost efficiency, industrial users of energy are now moving from diesel generators to gas generators. Besides that, Mikano has also gone into diversification with the distribution of electrical household components, low voltage, medium voltage. Low voltage we get from ABB, we are also in partnership with Schneider Electric, sockets, circuit breaker that we use in the house, up to the ones that we use in industries, electrical panels that we use in the distribution of energy. That we also assemble here. We also added into the portfolio last year Phillips lighting, professional lightings, for offices, hospitals, hotels, streets: professional lightings. It is a specific lighting. We have made a big move from incandescent or halogen lighting to professional lighting. First, it ensures long life for your fittings.
It also reduces your power consumption, much less than halogen or incandescent lighting. How is the market receiving your various products?
We have a positive approach. In spite of the effect of the devaluation of the Naira, and the slowdown caused by the recent general election in Nigeria. We hope that in the next few months, we will do a product relaunch. We may also get some new investors coming into Nigeria and we know they will need power as part of their projects.
Don?t you feel concerned that you may be out of business soon, if efforts at achieving uninterrupted power supply in Nigeria succeed?
I don?t think so. First, when we are speaking about increase in power generation, you must know that it is a long-term project.
We know that the Olusegun Obasanjo government started the process, when he started the Independent Power Projects. But that was over 10 years ago. Yes, projects are ongoing. Money has been spent, but the country is still facing huge problems, particularly the transmission of the energy.
It is true that there is some investment in power generation, but how to transmit the power from Point A across the country; not just from Point A to Point B, but across the country, to interconnect the country also called the highway of power. That is certainly the next step that the new government should take into consideration, to analyse that and to invest in. These things are not done in one year or two years.
It takes seven years, 10 years to evolve. There is also the Nigeria niche; the country is huge, Nigeria is huge. That is why you see some people say we have 10,000 mw installed or 7,000 mw installed. It is still far away from the 20,000 mw or 25,000 mw that Nigeria needs. The population is growing in Nigeria, the middle class and high class is also growing. That means the demand is increasing. To push forward the industrialization of Nigeria, you will need more and more of power. There are so many products that you import in Nigeria. Why?
You are a great people, a great nation, the population is huge. So the government should just put in a place the legal frame that will support industrialization or revive industrialisation. The industry needs power. All these take time; for me 10 years will be minimum. That means that generator business will still be there. Even to balance a shutdown of power, you will need a back-up.
The question is: will the generator continue to be diesel-powered or gas-powered? How fast can we expand the gas sector?
Even if it takes 20 years to get Nigeria?s power sector right, the question is: will it not signal an end to your line of business?
Mikano has already started diversification. If you look at Mikano five years ago, it was mainly for generators. Today, we manufacture diesel generators and gas generators. Now, we are diversifying into electrical components.
Today we are speaking of low voltage, primary and medium voltage. We are also representatives of Hyundai equipment, that is escalators, forklifts. You may want to ask: what are these projects doing in Mikano, a power generating manufacturing company. Well, they are all complementary. For instance, we currently have a customer, they want to build a new plant, it?s a fresh new project here in Nigeria. For that they need generator, they need forklift, they need escalators, they need transformer, they need transmission panel. They need all our portfolio as a one-stop shop in order to activate their new policies. We are also using our facility and our equipment to produce another product. I told you we manufacture soundproofing right here in Lagos. Specific tools like laser cutting, bending machines, to produce shelves, racks, steel chairs, lockers. All that is related to steel. We are diversifying to activities that are linked to our work, adding value to our operations.
How has your corporate social responsibility been? How have you been giving back to Nigeria?
First, when you go on the road, you see everywhere Mikano Police canopies. The Police is not paying for that. We are putting that in place so that the Police can get protected. We manufacture the canopies from the scratch in our factory, designed and distributed at our own expense. It gives the Police protection. It also creates awareness. We have messages on the canopies about observing speed limits, the need for seat belts and so on and for the Police on how to behave on the road. We also involved in manufacturing activities and IT training of young people in the mechanical and electrical in our premises.
What is your assessment of the quality of manpower in Nigeria?
We have to build skilled people in Nigeria. People need training and we have to provide continuous training for the people we employ. The schools are doing well in providing basic education for mechanical engineers, electrical engineers. The training from Nigerian schools is certainly much better than most of other African countries. Of course, it can be improved, but certainly it is better than what you get in most African countries. In Europe, you think it is better? No. In Europe, people getting out of universities, or technical colleges also come out with only basic knowledge. After the basic, you need to build something on it. That is what companies that hire them must do. The skills a mechanical engineer producing machines is different from the skills he will need in a mechanical company producing cars, or maintenance of agricultural or household equipment. It is the duty of each company to propose a new training programme specific to its areas of operations. In any case, in any country in the world, you are a fresh graduate because you don?t have any experience and you just graduated from the university. This is your first stepping stone.
What has doing business in Nigeria been to you?
Nigeria is a good place to do business in. Believe me, many of the countries that left Nigeria for neighbouring countries are already regretting it. They will soon start returning to Nigeria. They market here is huge, the skilled labour is in abundance? With a hitch-free transition of power from one party to another, the Nigerian economy will soon receive a bounce.