04 January, 2014

NEW AUTOMOTIVE POLICY GOOD FOR NIGERIA


The Managing Director/CEO, Proforce Limited,  Mr.  Adetokunbo Ogundeyin, says the new automotive policy recently introduced by the Federal Government   is the best decision for the nation’s economy now. In this  interview  with AkinTUNDE Akinwale, Ogundeyin also explained why his company went into  armoured vehicles production and the recent partnership  with the Defence Industries Corporation of Nigeria (DICON). Excerpts.

Why did you go for the production of armoured vehicles?
What has happened over the years is that the level of insecurity is on a very high level. When you look at armed robbery, you will see that it is on a very high level. I happened to be in Kuwait sometime ago, and people were looking for a company that would partner them, to market their products, and at that particular moment, it dawned on me that I did not want to be a go-between; I wanted to be a manufacturer. So we teamed up with some Colombians to set up Proforce in 2008. That was actually how we started the company. And the reason we founded the company, like I said, was due to the high level of insecurity in the country and all over the world. Nigeria is not isolated on this, because when you look at it, the same thing is happening in many countries across the world.
Why did you not go for importing?
Due to my passion for innovation and my training as an engineer, I do not believe that trading is the way forward. We engineers believe that trading does not build up the economy of any country but innovative manufacturing and application of latest technology. Manufacturing is the heartbeat of any economy and without manufacturing that economy will be stagnant and potentially collapse under external global market pressures. Trading is just a short-term engagement. Manufacturing is long-term, and the more companies you have manufacturing, the greater the foundation of the economy of that country because of the jobs and wealth created. So, that was why we went into manufacturing and, of course, it gives me so much joy and pride because by manufacturing, we design and build our products; and this is done by Nigerians thereby developing expertise and capacity. We are creating jobs for Nigerians. We are saving for the country a lot of foreign exchange and are even earning foreign exchange for the country by exporting. You can imagine the amount of joy you have when you see your products in other countries all over the world and it is made in Nigeria. It enhances Nigeria’s good image all over the world.
But, then apart from that, when you are talking about defence, in Africa, it is only South Africa that has gone into this type of business, and we believe that we can do better. We believe that Nigerians have what it takes. We believe that Nigerians are intelligent and hardworking; Nigerians are focused and forward thinking; they know how to go about things. They are very sharp thinkers. So we believe that by the time we tap into these great qualities of Nigerians, we should be able to produce better products than what they make in South Africa, and we are on the way. We are on our way, because when you look at the level of patronage and the level of confidence that is being built in a lot of our clients that approach us, you will agree with me. They can see the vehicles that are built abroad; they can see the quality of things done abroad. They can see that Nigeria has been used as a dumping ground, and when they see what we are doing and the quality of the finish, they are impressed. We are gradually building confidence in a lot people. Our quality control department is doing a great job in that respect. I thank most of the people working there, because it is a collective effort to project Nigeria as the number one defence products manufacturing country in the world.
But some people  think that Nigeria is not investment -friendly, due to policy inconsistency, which has resulted in many companies folding up…
About policies that keep on changing, it is not only in Nigeria that this happens. It is all over the world that it happens. What we have tried to do is that we try to run a very lean organization. Number two is that we practice the Jugaad management method. In the Jugaad method, we don’t waste money. We are not top-heavy at all, and we spend a lot of money on training and on research and development. That is the core of any business concern.
Yes, a lot of companies have folded up, but  a lot of these companies wasted a lot of money by being top heavy and lacking basic efficiency practices. They wasted money on other things. We have plugged all such holes, and what we have also done is that we try to run the place with minimal overheads, because when you start producing volume, then you can make your money, and it will sustain you.
What exactly do you produce in your Ode Remo plant, and can the quality standard be compared with similar products elsewhere in the world?
We make a lot of tactical vehicles, cash-in-transit vans; infantry combat vehicles, armoured patrol boats, Unmanned Arial Vehicles (UAV’s) and architectural armouring. We are now putting together a prototype military tank. Majority of these vehicles are second to none when you look at the quality. We have brought in expatriates that have a combined 70 years experience in armoring, and these are people who were the top guys where they were working before. They have transferred the technology to Nigerians who are coming up seriously fast. In fact, we have a couple armoured personnel carriers (APCs) that the Nigerian team put together and when you look at the quality of the finish, you can match it in quality with the APC’s the expatriate team made.
So, gradually, what is happening is that the Nigerians are taking over, and one day the expatriates will leave it to Nigerians. But I can assure you that our products are just as good as all the products that are imported into Nigeria. Moreover, all we defence products manufacturers import raw materials from the same select group of companies such as glass from the same world leading Armoured Glass company in Peru. Likewise, we all import steel from the same company. The type of welding we do is mig-welding  –  the expertise of welding two ballistic metals together. If there is a joint, there could be a weak area. So we have perfected the mig-welding because of the presence of the expatriates that we have around, who have transferred that technology to the Nigerians.
We have independently tested most of the different parts. They are all tested in ballistic laboratories in Germany and we are putting together a process of taking the vehicle as a whole for testing in Germany too. Apart from that, even the drive of most of our vehicles is different; because of our environment, the suspensions are made to suit our roads. We test some of these vehicles on our roads. We test some of these vehicles on our test track. We are putting up a mega test-track, but for now, the vehicles are tested on the test track we have. Some of the vehicles are amphibious going through deep waters. We are putting together a military tank that is combat-ready.
What is your recent MoU with the Defence Industries Corporation of Nigeria (DICON) all about?
We signed an MoU (memorandum of understanding) with DICON to build a lot of military APCs in their Bauchi plant. The Bauchi plant has been comatose for years. I think it was built over 20 years, and not much has happened there. So, they want us to make use of it on a PPP (public private partnership) basis and start building military tanks. Just as we are building here, we will be building over there too. Nothing is as good as that, because what it means is that the country  as a whole will now look inward. I can tell you one thing:  No army anywhere in the world goes out to fight without having its own equipment built in its own country, because if you are unlucky to have your equipment built in a country where an aggression is coming from, then you are in trouble. So, you are to have your own home-grown equipment, not equipment being built by one country and supplied to you. No. We have more than enough expertise to build these things here. We are building them in Ode- Remo. You need to go there and see what we are doing there.
So, we don’t need any expatriate to say they want to come and start building anything again for us. Many countries have realized that Proforce is number one, that Proforce is on the move. At the rate at which we are going, we will overtake a lot of countries within a short time, and that is the drive we have.
You once tested your APC with policemen on board as shots were being fired with AK 47. Was there any incident, and how did the vehicle perform?
Yes, that was at Osun State. The policemen were inside the vehicle as it was shot times without number, and there was no penetration at all. What that shows is that we know our products, and we are confident of our products. Even I can sit down in our vehicles and have it shot at as I will be fully protected. All our vehicles are 360 degrees protected.
By that you mean that no part of your armoured vehicles can be penetrated?
No part can be penetrated. Even when you have gun shots on the tyres, what you will discover is that the run-flat that are inside the tyres can take the vehicles for over 50 kilometres and take you out of that danger zone, which is excellent and second to none. So, that is what we have done. The Policemen, the Military, the Armed Forces and the paramilitary, all of them have given credit to our products. They find it un-believable that this is happening in Nigeria, but it is truly happening.
Who do you make APCs for and who are those that bring their luxury cars to you for armouring?
Our clients are the Military, the Police, the Paramilitary, the Immigration, Customs and multi-national companies that bring their vehicles here, because they realize that a lot of the vehicles they imported and are having serious after-sales problems.  In fact, one of the biggest companies making armoured vehicles in the US just called me for a meeting tomorrow, saying they want us to handle their after-sales in the country and they want us to handle their armouring for them here for some of their clients.
That shows you the level of confidence they have in us. Apart from that, we had an inquiry from one of the huge European countries i.e. France. They want to supply armoured vehicles to a Francophone African country. They want to sub-contract the building of the militarised Landcruiser to us. We will do the building of the Land cruisers, and they will put the ammunition on them. The western world having so much confidence in what we are doing shows that Nigeria is going places, the government of President Goodluck Jonathan has done so much to encourage us, and it projects the government in good light all over the world.
What kind of support have you been getting from government?
Proforce has been recognized by government. In fact, there was a time the President sent a delegation of all the security outfits within the Presidency to come and look at what we are doing. At different times, the Minister of Trade and Investment, Dr. Olusegun Aganga, and the Minister of State in the ministry have been to the plant. The military has been there. Commissioners of police of different states have also been there, and they all appreciated what we were doing and were impressed. Not only that, the Federal Government has just come out with the new automotive policy as part of the transformation agenda. The automotive policy is the best thing to ever happen to this country. Look at a country like Iran where the auto industry contributes 10 percent to the GDP of that country. That is what is going to happen in Nigeria. The auto policy will transform this country completely into a manufacturing nation.
Look at financing, the Federal Government has now provided an intervention fund for manufacturing. This fund is one that is accessed easily. The Bank of Industry people are always ready to help. We thank God for them. The National Automotive Council too has been so good to us and the industry generally. They have given us their backing. So, what else? The new fiscal measures for the auto industry will allow us to bring in our different parts at zero duty from next year. There is nothing as good as that. What it means is that we will be competitive anywhere in the world market.
But there are people who think it will not be good for the economy.
For goodness sake, we have been on this for years. We have been trading for years; just importing and selling. Nigeria has been converted to a dumping site for imported vehicles. Look at all the Chinese vehicles all over the place. Look at countries like Malaysia and Indonesia. They are manufacturers of vehicles. This is the time we should rise to the occasion and stop all this trading. It can never be counter-productive. Look at the amount of foreign exchange we are going to save. Trillions of naira in foreign exchange will be saved for this country; this is what they have been using to import vehicles every year. Look at the employment opportunities that it is going to create – close to 500,000 jobs or more. How can it be counter-productive? Look at the effects downstream; several specialist manufacturing outfits will spring up, making brake pads, suspensions, and general spares for these locally manufactured vehicles. Let each one of the traders go there and get these companies to come and set up assembly plants in Nigeria. If you go to Malaysia, you will see an assembly plant for Mercedes-Benz, for Suzuki, for Honda, and others. Let them go there and get these people to set up assembly plant here. If the Western world are not interested, then we go to Asia. By the time the West realized the Asians have taken over the market, they will come. You don’t need to beg anybody. They will come. Look at what has happened in India. Look at how Tata started manufacturing vehicles in India, and today, they have taken over Land Rover, they have taken over Jaguar, they started from somewhere. They started from India. So, I believe that our automotive industry will get there. We will get to the stage the Indians have reached. I am very confidence about that.
The Minister seems to be caught in the cross-fire of the opposing camps on the policy. How do you see him?
This is a man that has applied a global perspective to manage massive portfolios and we all know they are long term thinkers. These are people who understand what industrialization is all about. The people who are attacking the Minister are a people who cannot see beyond their nose. Nigerians do not want to get out of their comfort zone. The people that have been opposing the policy have been making money just trading. Let me give you a typical example: Dangote those days was just trading. When Gen. Olusegun Obasanjo’s government started the privatization of government enterprises,  he took the bull by the horn and went into manufacturing, and today, you can see the difference. Other people who were his competitors, but were short-sighted, look at where he is and where they are today. So, people need to get out of their comfort zone. Most people prefer to have an office and just sit down and sell may be100 vehicles a month with a lot of profit. When it comes to manufacturing, it is a different ball game entirely, but that is what makes a country grow.
How will the policy and the new fiscal measures impact on your own sector of the auto industry?
In the case of Proforce, you know we import most of the things we use. We import the steel, the suspension, the glass and virtually everything that we use in building the vehicle. Definitely, by the time we start paying zero duty, the prices of our vehicles will be cheaper. We will be able to compete favourably with all the APCs and other armoured vehicles made all over the world. People will now be queing to our factory here in Nigeria to build armoured vehicles and we will be exporting. We will be earing foreign exchange for the country. Even within Nigeria, customers will be getting the vehicle at cheaper prices than those made abroad. So, nobody will go to America or Turkey or anywhere abroad, to buy armoured vehicles. They will buy from Nigeria, because the quality is the same, if not better. We have even started the process of ISO 900 certification. So, what else do we need?
How Proforce’s products compare with imported competitors in terms of price?
As of now, we are able to match their prices. For instance, if you want to armour a Landcruser with us, it is about $100, 000. That is just to armour . The cost of the vehicle is not inclusive. If you go abroad to armour a vehicle, it is $100, 000 too. If you want to armour a BMW 7 Senies with us, it is only about $100, 000; that is, about N17 million. The cost of the BMW 7 itself is about N24 million. N24 million plus N17 million will give you N41 million. So, you can see that we can compete favourably as of now. By the time the auto policy takes effect, we will be cheaper than those made abroad. So, Nigerians are even going to get armoured vehicles at prices way cheaper than what is imported.
Does your company have the capacity to satisfy local demands?
Our facility in Ode-Remo has the capacity for 40 armoured vehicles per month. It is designed and built to produce 40 vehicles per month. The one in Port Harcourt which we are starting by January can do 20 vehicles per month. So, we are talking about total of about 60 vehicles per month. We are in the process of putting up another one in Abuja, that will do close to 120 per month. So, by the time they are ready, we will be talking about 120 to 200 vehicles per month. That is more than enough. In fact, we will have excess vehicles for export.
Why is armouring vehicles vehicles so expensive?
It is so because of ballistic steel. The cost of ballistic steel is enormous. We are talking about steel of about 6.5 millimeter thickness. We are talking about adding a weight of at least 1000 kilos on a vehicle. So, the suspension has to be reinforced, which comes all the way from Australia. All the things are imported. But, with time, as the automotive policy gains ground, we will start producing these things in Nigeria. That is the advantage of the automotive policy.
In that case, an armoured vehicle will certainly be too heavy. How do you manage weight problem?
That is why when you want to armour a vehicle, we suggest that the engine capacity should be a minimum of 4.6 litres; that is, Landcruiser and above, so there will be a lot of power and torque to move the vehicle very well. And apart from that, it must have a reinforced suspension. Moreover, we always advise you don’t go more than 100 to 120 kilometres per hour. Above that, it is a bit dangerous, because the vehicle is very heavy and then you need to be trained on how to drive an armoured vehicle. It is not the same way you drive other vehicles. It is not the same way because when suddenly you apply your brake, it can throw the vehicle off the road completely. So we always advise that the maximum speed should be 120 kilometres per hour.
Nigeria is among the top four countries importing armoured vehicles in the world. Does this worry you, especially when we are on the group with Iran and Afghanistan that are known for violence?
Yes. It is a major concern. Insecurity is a major concern. But one thing I will say is that Nigeria is not Isolated when it comes to all this. When you look at the political situation in the country, don’t forget that we recently transited from military to civilian rule. We are still trying to find our feet under the civilian rule.  All these things add up. We are having another election in less than three years time. Politics in this country is a bit of do-or-die. A lot of people just feel that they would be insecure. So, they want to protect themselves. That is one reason.  The other reason is the level of threat to life in the northern area. I am talking about the Boko Haram issue and all that. Unfortunately, the insurgency situation is escalating, so people feel threatened in the north, and it is even spreading to the south due to the fact that we are talking about kidnapping. This is the reason why people feel they have to be protected. And then, even petty armed robbery is also a factor.
How many armoured vehicles are imported into the country evry year?
When you     talk about the normal passenger vehicles, I think it is about 500 and 800 in a year. There are armoured personnel carriers imported by the Police.The Customs too. Add the ones imported by the military. By the time you add up all that, you will be talking about 1500 in a year.
What is the target you aim to hit, may be in the next couple of years?
You see, we believe that Proforce will make Nigeria to become the number one armouring country in the world. We are working hard on it, and we know that we would achieve it. This is because of the speed at which we are moving and the support we have from President Jonathan’s government, which is more than enough for even a dumb person to be able to get up and work hard. We want to be the number one armouring company in Africa, and then from Africa, we take up the whole world. I am sure by next year, we will start bidding for all sort of jobs all over the world. And, I am sure you known that by the time we get to that stage – when we start bidding for jobs all over the world - every single person will be proud to be a Nigeria. By then, we can bid for United Nations jobs, and others.
You have in your plant some imported armoured luxury cars which owners brought for re-armouring. Is this an indication that the foreign vehicles were not good enough?
Definitely, that is what has happened to a lot of Nigerians. Nigerians go abroad and import the wrong things entirely. For instance, how come that you go over there and import an armoured vehicle and only six months after you start having problems with the windscreen? That is pathetic. It means that that new windscreen has to be changed. How do you explain a situation where you import an armoured vehicle and you start having electrical problem, mechanical problem and suspension problem? That means that Nigerians are being short-changed and we have a lot of people bringing in their armoured vehicles basically bought from different manufacturers all over the world and all these vehicles are failing them. The government of a particular state bought some APCs sometime ago. We got complaints soon after that virtually all the APCs were down. People usually import the wrong vehicles. Most of these armoured vehicles that are imported are built on particular brand’s chassis. Most of the armoured vehicles on those chassis have parts problem, because we don’t even have the parts for Ford. All our armoured vehicles, all our cash-in transit vans are built on Toyota chassis. Toyota parts are all over the place. They don’t have problem with after-sales Even when you look at the boat we supplied to a state government, it is one of the best they have ever had in that state.  
Those who import these vehicles make all these mistakes. Some of them bring in vehicles that are over sensitive; computerized and so on. All these things don’t work. We go for the basic thing, and they work perfectly. When you are talking about military tanks, the designs are coming from collaborating with partners in France, but we are tailoring them to suit the Nigerian environment, African environment, so that they will be able to work like work horses in the African environment.

Do you think Nigeria will ever get to the stage where it will become unnecessary to import armoured vehicles?
We have already reached that point; the time is now. Armoured vehicles should not be imported into this county again. Proforce has the capability. We have the capacity. We have what it takes, and we are moving up, and we thank God for the wisdom of the Federal Government in putting a fresh auto policy in place.
Auto policy aside, what other kind of encouragement do you still need to get to the position you have just talked about?
All we need is the encouragement of the Armed Forces. We are not isolated. We cant work alone. With the encouragement of the military, with the support of the Federal Government which we are getting from President Jonathan and the Trade and Industry Minister, from the National Automotive Council and financial support from the Bank of Industry, now is the time to take control of our destiny.
Foreign armoured vehicles have no reason to be imported into Nigeria as of today. I repeat it, and I am saying it again and again.  


No comments:

Post a Comment

Related Posts Plugin for WordPress, Blogger...