HomeBusiness It’s a shame! Nigeria still imports transformer oil - Buschell
It’s a shame! Nigeria still imports transformer oil - Buschell
Written by Yemo Afoye
Tuesday, 04 November 2008
THE Nigerian economy is evolving and different sectors of the economy have taken their cues in undergoing different reforms aimed at reshaping the sector to enable the easy discharge of business.
Buschta
The power sector in Nigeria has not been left out as it has also developed new and modern ways of transacting its business, a development which has also made it possible for private investors and entrepreneurs to consider investing in the highly controversial sector.
Mr. Ayodeji Buschell is the Chief Executive Officer of Serve-All Group, an indigenous engineering and manufacturing company, which concerns itself with the complete manufacturing and production of different capacities of electricity transformers.
In this interview with Vanguard's Yemie Adeoye and Success Uzokwe, he opens up on challenges being faced by indigenous investors in the manufacturing industry especially when it is a highly capital intensive sector such as power, while also lamenting the inability of Nigeria as an oil-producing country to stop importation of transformer oil as well as the unacceptability of made-in-Nigeria products without the benefit of doubt even as according to him, such products have come to stay.
Excerpts: Can you tell us a little about yourself? My name is Ayodeji Buschell, I studied Computer Science programming applications at the University of Calabar as far back as 1992, but it is one thing to study in the university for what you actually want to do and it is another thing to want to practicalise what you have studied.
I did computer science just because I needed to be educated, though I had wanted to go into pharmacy. I was doing engineering with my uncle since I was nine years old. This basically has to do with domestic engineering and electrical wiring of the house. But there is this dream, the inner dream that comes up and I see myself around transformers and electricity atmosphere as far back as 1993.
I was opportune to see a transformer face to face because a company was folding up in Oshodi Industrial Estate, and they had these equipment to be sold. At that time I could go into companies to get equipment for people who need them and that was how I stumbled into the first transformer in my life. I could actually get a buyer for the transformer so the person I got in touch with has a workshop, Moe and Partners.
He saw the zeal in me and said 'ok come over boy, you will handle the marketing aspect of transformers,' but in the process of my training with Moe and Partners, he realised that I had more inside than what he had actually anticipated. So that was how the journey started with transformers and I was with Moe and Partners for about three years, then I took private lectures from international bodies on transformers and not electricity per-se, because electrical technology is a wide field and you have a lot of appliances that make up electrical technology, but my own specialty was based on designs, installation and repair of transformers.
In 1995, I established my own company after I left Moe and Partners so that was where my own journey started from. I looked at Nigeria then as dumping ground for electrical appliances with giants like Adebowale that had a bright future and dreams for Nigeria, but government policies then would not allow them to grow because everybody then was like trying to import everything into Nigeria.
But as we would have, it over time, we had a breakthrough actually in 1997, we were able to build and fabricate transformer tanks, and from there, we could repair transformers for PHCN (then NEPA) and may be some communities. We do installations for a lot of companies but that was not my own dream, my own dream was that Nigeria is too vast and it has all the necessary resources that can enable the production of transformers in this country.
Ajaokuta is not working, you have copper deposits in Bauchi, you have brass deposits in Niger State, a lot of raw materials that could make you have a total package for a transformer, because the transformer itself is made up of the insulating oil, the coal lamination which is the silicon sheet that Ajaokuta can produce for us, the oil section which is the transformer insulating oil which the oil companies can produce for us but they are not, the copper wires which normal electrical companies could also produce but they are not!
However, with the coming of democracy in Nigeria, things have changed for everybody in the country, because you could have a stake in your own country. You could say yes there is a continuous government policy, hence you are not afraid to establish. So that has been the journey so far. Basically, at this present state that we are, we are able to manufacture transformer from the design to the finish.
Can you clearly let us into your area of operation, are you marketing imported transformers or producing new ones? As I am sitting in front of you now, I have never imported one single transformer in my life. What I did in 2002 was that I was able to know the different segments of a transformer. What controls the voltage, which is referred to as the tap changes, you have the accessories which we call the bushings, the low voltage side and the high voltage side of the transformer, these are the necessary accessories needed for you to make a transformer complete.
Then you will also need the insulations, it involves the paper windings, the sleeving, the press boards and so on. We were able to get into marketing agreements with companies in India because India for now is the only country that you can actually sit and get all components of a transformer and that is where Nigeria is supposed to be. Indians can sit in India and manufacture a complete transformer from scratch.
Are you reiterating the fact that there is an abundance of untapped raw materials in Nigeria? Nigeria can supersede the European countries put together in technology! We have the brains, we have the manpower, we are also blessed with the raw materials, but it is sad, Ajaokuta is not working! We have companies like Coleman Cables, Kabelmetal etc. If Kabelmetal can produce copper cables and realise that the demand for copper insulating materials needed for transformer is high, then they’ll veer into that sub-sector. But nobody is going to put his fund into a revenue that is going to yield 20 per cent. But if Kabelmetal realises that Nigeria has developed to the stage of reproducing copper wire, it will diversify because they have been in existence for quite some time in Nigeria.
We have Mecon Cables, we have a lot of cable companies in Nigeria, but Nigerians can’t build a transformer from beginning. I can tell you that Nigerians don’t need to go to Benin Republic or any other country to get the necessary equipment. In fact, paper is the major component of insulation.
Obukobou Paper Factory is not working, Iweku Paper Mill is not working, a lot of paper mills are not working, and we have the raw materials, so I can vouch for you 200 per cent without mincing words that Nigeria can manufacture transformers of high standard as good as any foreign country would.
What informed the present state of things that has brought us to the point where we can’t even think of harnessing our natural resources to go into production of vital equipment such as transformers?
How many Nigerians are into manufacturing? Nobody wants to put his money into a venture that will not yield money because the banks will be on your neck to bring back the funds they have given to you. There are two different things about making money.
A businessman is a businessman, all he thinks about is profit-making but a manufacturer wants to impact the society, he wants to impact the economy even with a marginal profit, that is the manufacturing sector, and why can’t we do that? Simply because most of the people that have the funds are not using the funds where the funds are supposed to be used. For instance, the banking sector, a bank will tell you about your in-flow and out-flow, somebody is starting from the scratch, he has all the ideas and you tell him that his in-flow and out-flow are not enough even when you bring out all your best brains and you don’t have a structure to show for it.
Take for instance this interview as a grace from Vanguard, if I don’t have a structure to show for it, may be we sit in a snacks bar to talk, it doesn’t hold any water, but because you are sitting here, you can see the next step that we want to get to, you can appreciate it, that is what Nigeria is about, and because very few people have the resources to get to this point, their dreams are dying. It is for this reason I will give credit to the immediate past administration whether people like it or not and also to this present regime that has the vision of trying to see how power can be improved, at least making it one of its seven cardinal agenda. Take this place for instance, 24 hours I’m on generator but if power can be stabilised to even 12 hours a day, it's ok for an industrialised sector. So a lot of things have gone in Nigeria due to prolonged military interference in governance
What in particular did the past administration do to arouse your commendation? Take for instance in Nigeria we take an overdraft facility from the bank because of connection or whatsoever, to go and import tooth-pick, plantain chips, Eva water etc. into Nigeria. Five Alive was imported from South Africa. The Obasanjo administration looked at the whole sector and said no! this is not possible. He placed a ban on all those items and now when you look at Five Alive, it is made in the brand of coca cola which is made in Nigeria. Chivita was almost collapsing but Chivita now is booming, a lot of beverages are coming up from small scale industries.
This is part of the policy.What is the duty on an imported transformer? Five per cent, but I can tell you if the duty goes to 45 per cent, 40 per cent or even 20 per cent, you will see people looking within and not outside Nigeria to get transformer but because the duty on transformers is so low , any person that has the fund can just go and import transformer and tell you that the transformer is as good as what- ever you have so Obasanjo’s regime brought us to this level that we are going to be for us to meet goals of Vision 2020 iof the government.
Nigeria is complaining that there is no power, and forgetting that there is nowhere in the world where you’ll need a transformer and then decide that you are going to a shop like Kingsway to buy a transformer, you can’t get it abroad, you will put down your money either 50 per cent or 30 per cent and after a month, you’ll come and pick your transformer, in some cases after three months. Sometimes a single power transformer takes about six months to manufacture. If PHCN has been using this particular transformer since 1965 and has not taken time out to consider the maintenance factor on the equipment, definitely it will break down, and Obasanjo’s regime looked into all those areas, but we are the way we are for obvious reasons.
How has it been so far, in a sector so controversial, do tell us about the challenges you’ve been facing? It has been an adventurous journey in the sense that it is pain most of the time, your family members will also feel the pain because all your funds which a normal Nigerian will use for social activities would be thrown into an investment over a period of time and it takes time as well - why people are not into transformer business is because it is capital-intensive.
Two units of code winding machines are close to $US45,000, low coring machine is about US$14,000, a hyper- tronic tester is about US$12,000, a digital oil tester is close to about US$7,000, so you now realise that it is not a child’s play because it's just like a doctor who wants to open a specialist hospital, he must have every equipment in place. If I’m telling you that I am into manufacturing of transformer and I don’t have all the necessary standard equipment in place, then I am just deceiving myself.
Are you saying that you are now equipped well enough to produce a power transformer from scratch? Those two coils over there were manufactured from the scratch without moving anywhere. In essence, we sourced all our raw materials within the country, but these raw materials were not manufactured in Nigeria.
They were also imported into the country, although we were able to harness all the raw materials from whatever suppliers to put them into what they are now, and as we are sitting here now, we will still be doing almost like 70 per cent or 80 per cent of importation of raw materials. But then, what we are doing here is not even importing transformers or this accessories as CKD, No! We buy most of our accessories from Switzerland, we buy insulation materials from England, but for now the major players in the industry are Indians because the equipment are from India. Nigeria as a country cannot produce transformer oil and the transformer oil which is a mineral oil is a by-product of gasoline. Still, we can’t produce insulating transformer oil and we are saying the oil sector is booming and making bold to refer to ourselves as a major global oil producer.
Oil is a revenue, the amount of oil that comes into Nigeria yearly is sad, may have reduced it to nine, and I’m not paying duties, time factor forgotten because as soon as the suppliers or importers of this oil realise that Mr. A doesn’t have oil, he jacks up his price and you don’t have any choice other than to buy.
Take for instance if PHCN gives us transformers to repair, we repair them and PHCN doesn’t even have transformer oil, so it goes back to the sector and we now charge PHCN for the things that Nigeria is supposed to produce.
Write Comment
Please keep the topic of messages relevant to the subject of the article.
Personal verbal attacks will be deleted.
Please don't use comments to plug your web site. Such material will be removed.
Just ensure to *Refresh* your browser for a new security code to be displayed prior to clicking on the 'Send' button.
Keep in mind that the above process only applies if you simply entered the wrong security code.
Copy This Idea and Start Making N650,000+ monthly beginning from today!
This simple business has made me N650,00+
in one month by learning where to find unique
information and making it available to
particular groups of people.
Easy,Simple, Quick Setup.
Completely legitimate.No scam!
Get report for FREE Here!
FxPro.com - Trade Forex Like a Pro
Flexible leverage up to 1:500
Low spreads from 1.8 pips www.FxPro.com
MyNaijaNews
Naija entertainment, lifestyle, sports, music reviews, fashion, technology, mobile phone reviews, books, classified ads, greeting cards, etc....It's your content. go get it......
Comments (1)
