How significantly would you say Nigeria has succeeded in positioning itself as a hub for transportation and services among other sub-Saharan countries?
I guess we have to look at it from different perspectives, air, land and sea. Within transport one has to look at it from these 3 perspectives. From the air point of view, what we have done is to position the infrastructure but not the transport means for this type of communication, that is sub-Saharan Africa. We have not looked at the transport means. The same for the maritime as well. Our ports are one of the best. We cover Calabar, Port Harcourt, Lagos. But again we don't have the bottom. The Nigerian Shipping Line collapsed. There is no national carrier. We don't have the vessels so we are relying on foreign carriers. You need to start from within to link with the international community. So we are missing the part. On land transportation, we have failed to develop our inland waterway system, as a result we have a heavy load on our roads. If we can only develop our inland waterway systems and carry most of our heavy goods by inland waters. A 500-ton badge is equivalent to 50 tons trailer, if we assume 50-tons trailer for land transport. It is unfortunate that we have not developed our inland waterways to minimize our axle load on land. These networks normally start from within the country and proceed to the sub-Saharan regions, all these other countries that are around us. And loh ! and behold! Nigeria is the country that they look up to for their economic survival, and unless we need to oganize ourselves to integrate them.
How would you characterize the Nigerian shipping industry?
Almost non-existent. Nigerian shipping industry is non-existent. You can hardly find 1% of Nigerian vessels that could meet the ISM code.
The shipping industry is very poor at the moment. What is the cause of this? The shipping industry is a place where it takes a lot of guts, a lot of finance, a lot of know how ; these are the critical ingredients to survive in the shipping industry. We, at Nigerdock call ourselves the corner stone of the shipping industry; corner stone because on us they rely for keeping them afloat, and seaworthy. However, without proper funding they are not able to keep afloat. The banks have not understood the shipping industry ant therefore are not able to finance correctly. The few that they financed failed woefully because they failed to monitor, they failed to synchronize their financing with their returns, they failed to analyze the vessels they were financing properly. These are missing gaps, we are very new in this business. These are weaknesses in the system.
What measure should be taken to rectify the process?
I think that at this stage, Nigerians have grown, they have learnt lessons. The important way to mitigate this problem is for people to begin to come together and concentrate their knowledge into one vault that will be able to drive the shipping industry forward. To continue as in the past where each individual had 2 or 3 million dollars and decided to be ship owner and then form a shipping line will not wok. We must begin to appreciate that if we make a hundred thousand dollars a year, it's better than losing 3 million dollars a year. We should team up and share profits. The funny thing is that some of us look for millions but forget that out there in the US, people are earning a hundred thousand dollars are just very comfortable. It is an Onasis dream that drives some individuals into shipping. The Onasis dream sometimes breeds selfishness. I must strongly state though that shipping is a private sector activity. Government has no business in private sector things like shipping. For the construction of Ports of Dockyards, these are capital intensive projects beyond individuals.
Could you give us a brief historical background of Nigerdock since it incorporated in 1986 ?
In the '70s, Nigeria had problems with vessels calling at our ports and so they decided to set up dockyards. This is how Nigerdock came to be. We were to build three; one in Lagos for 25.000 dwt, one in Burutu for 150.000 dwt for VLCC, and one in Port Harcourt for 15.000 dwt. Unfortunately we didn't have enough funds so we just built the Lagos one. In 1985 we commissioned it; there was no working capital, we had to start without a working capital. This is one company in the world that started working without a working capital and is still standing afloat. We employed first few workers, got a contract of 30,000 naira, from where we paid our first month's salaries. This how we started and have been going on till today
What was the first job?
The first job was the Nigerian Ports Authority floating crane.
What is presently the capital structure of Nigerdock and to what extent are you concerned by the privatization process?
The capital structure of Nigerdock is 100% owned by government. We started a process of privatization where Navimor of Poland, our Polish partners and Nigerian Ports Authority invested but the process has been stalled, while waiting for the present Administration to give direction.
You ask me should everything go to the private sector or should some go to the government ? It really doesn't matter. Having been on this seat, it doesn't matter to me. The company is not profit driven. A company that is profit driven will collapse with time. Profit is important but what drives a company is the system. You set up a functional system where activities take place. A nation is made up of activities. Profit is only an aspect of the system. If the objective of the company is only profit, then we might as well not set these industries. We might as well go and buy from Korea, sell and make our money. Its like the problem we have in Nigeria today.
A solid structure that produces even a 4,5% profit but services time, is better than a profit driven company that aims at 20%, but destroys the fabric of the society. And I hope that many chief executives would understood this and don't get me wrong if I say that profit is imperative but it is not the objective. They are two different things.
Take Nigeria as an example, Nigeria is poor because Nigeria is focusing and living on profit from oil. The day Nigerians stop focusing on profit and look at the cost element of our oil, our per capita income will take its rightful place.
With a cost element that has 80%, Nigeria is not participating, Nigeria is living on 20% profit of oil. If you take a company that you own and you invest 8 million dollars in it, you expect 2 million dollars profit at the end of the year. Of the 8 million dollars that you invested, you, the owner, are not participating in it; those participating are the operators.
The participators in Nigeria's cost oil are not Nigerians.
Those enjoying your money, the 8 million dollars, are the landlords, the landowners, capital investments, overhead costs, the telephones, everything, the running costs, your rates and taxes. I call them the actors, actors are enjoying your money. You are not. You are living on 20% profit and that is a maximum profit because any reasonable company ends up with 71/2%, 12%. This is the problem with Nigeria today. 80% of our money is in France, it is in America, Korea. The essence of a company is not profit alone. The 80% cost element is the soul of any nation or company. Shell alone will spend 8 billion dollars in Nigeria in the next five years. Of this 8 billion, less than 1 billion will pass through the hands of Nigerians banks, and 7 billion dollars will go through the hands of the Americans and the French and the Koreans. But Nigerians that own the oil are missing the 80% participation. They are waiting for their 20% profit.
| That is sad, and then the oil companies that bring in this 8 billion, they tell you: "oh ! we are financing it, it is our money". They sit down and award the contracts to themselves and the contracts are not done in Nigeria. But from First oil, first they take away their 8 billion from you before they share the 20% balance, 60-40. So it is double jeopardy. 16 billion has gone through the economy with no impact on it. That 16 billion is Nigeria's money but none of it passed through Nigerian hands because of wrong management, wrong objective.
We are all living and dreaming and waiting on the proceed of oil, with little effect on cost. In the 80% cost element, you must pay the landlords for the houses, you must pay finance charges, you must pay your workers, pay your medical bills, buy the equipment you want to use to work, buy your materials. If you are buying all of these things, you are gingering the economy. You cannot eat it because without you cannot produce. It is not easy to eat cost. It is easy to eat profit. We will reduce corruption in Nigeria particularly if we bring back the cost element within Nigeria territorial waters. I am not advocating Nigerianization , I am saying that the companies should set up their factories and workshops here locally.
To achieve this, we need to reduce our tariff structure in favor of local construction. A reversed tariff will drive foreign investors into Nigeria on their own to take advantage of the financial gains.
So what you are saying is that there should be some changes in policy.
Tariff particularly
You are advocating for Nigerianization.
No, not Nigerianization. Rather local construction. What our hands or ownership will pay to economy better.
Empowering ?
Yes. It is a different procedure all together. Nigerianization has not paid us because it went into some hands that couldn't manage properly, did not have the wherewithal. Leave the companies in the hands of managers whether they are Americans, British, French. It is a global village. I can go to France and set up a company. Let the Frenchman come and set up his company, no problem. But let us take advantage of our God-given gift, which is oil. Americans up to today are protective. They tell you about liberalization but they are still protective of everything. We should be protective of our own by making it very clear.
What is the contribution of your offshore department to your total turnover and what are your financial expectations for the coming year ?
I can tell you that at the moment the contribution of the offshore into our main stream is about 60%. But in the final analysis it is going to be virtually 80% of our life wire and you can imagine, as small as it is now it is contributing anywhere from 50 to 60%. You can then imagine what will really happen when the contract we are expecting finally arrives, ship repair and shipbuilding will be totally relegated to the background.
Could you elaborate on these coming contracts - among them EE project ?
EE project is one of them. We will be doing mooring systems EA projects with SBM of Monaco. We are into a lot of joint ventures. Between Nigerdock and Care offshore we have tendered for the ELF Emanam contract - that's an FPSO to make a project. We are in a joint venture with Nigeria Deep-Water Development made up of ETPN and Doris Engineering, and Stoke Comet and we are tendering for the Bonga which is another deep sea field. We are looking forward to with this kind of joint ventures to set up an industrial yard with a view for fabrication of riser towers. Flow lines and risers will be built here at Nigerdock. So these are our objectives in the near future.
The unfortunate thing is that each time we get close they shift the goal post. They have shifted the goal post so many times that we are almost giving up hope. Hope is always there, but we are getting to our last breath. If they shift the goal post again they would have crippled us. During the Abacha regime, there was no payment of cash calls to joint venture partners, so they couldn't award contracts. And then the Abubakar government came in and we thought he was going to pay up for the cash calls and contracts were to be awarded. It never really did happen, no contracts came to pass. The goal post was shifted again on us. We have now come in with a new administration in May, and this is November. I hoped that by now we should have started some jobs. The year is ending now we have not seen any jobs. No major job ; we are hoping that by January, February next year we will commence. We are carrying a heavy load on. We have a lot of Americans and Polish that I have integrated to strengthen our offshore capabilities. I cannot keep sending them home. I have been carrying their salaries from the past 12 to 16 months now without comparable income. If I send them home, it could cripple our dreams.
How would you rate your level of co-operation with American partners, French and Polish partners, and what is your policy as far as joint ventures are concerned ?
With my Polish partners, we have a very cordial relationship. They have been with us since 1981. The Poles coming from a communist world were very subservient and obedient to others. And so in the '80s when they joined us, we found them very competent and dedicated engineers working 12, 16 hours a day. That's what Nigeria needs and I will like to take you back a little and say also that I am an advocate of Nigerians working 56-60 hour weeks. We should go to 60-hour weeks until we have rebuilt our nation. Because we think we are at par with the world, we tend to follow the civilized world in working hour. We are behind the world because of the traumatic experience of military rule over the last 39 years so as such, we have a big hole which we must fill. We can only fill it through hard work. We can not fill it through hard work of working 40-hour weeks like the rest of the world. If we want to rebuild our nation it is not only asking the president and the governors to do this and that, the masses should join in rebuilding this nation. We should go 60-hour for the next three years to recover our past losses. Then we can graduate back to 50 hour and then down to 40 or whatever the world is in the next five years. But to assume that everything is okay, no. If there is a hole, the hole is there until it is filled up. We can never cover it. If you cover the top somebody will fall into that hole. But back to your initial question, Poles have worked well with us, very dedicated engineers.
What makes Nigerdock a unique and reliable partner for potential investors?
First is the character of Nigerdock. Nigerdock is a company with character. When Nigerdock says something they keep their word. They are respected. Nigerdock is not rich. People have misunderstood our uprightness. I still fabricate my own mower blade in my training school because I cant afford 1500 naira to buy a new blade in the market. It is not wealth that has make Nigerdock it is that when I take a project, we've never failed to deliver a project even if we do it at a loss. Any partner we've had anything to do with, we meet our own side of the bargain. There has also been continuity in Nigerdock. From inception to date the same management has carried through, and it has built confidence in the finance sector. When you are lending money to someone, you are not lending the money to Chrysler just for the sake of it. You look at the management of Chrysler. The banks have confidence in Nigerdock management. With all these basic factors, this is what we bring to the table. That's what makes us equal partners with our international competitors. |
