Clara NWACHUKWU

… Calls for support to enhance capacity
Indigenous company, Paints and Coatings Manufacturers Nigeria Plc, said it has been awarded the sole manufacturing rights for the manufacture of protective coatings by International Paints in Nigeria. International Paints is reputed as the biggest manufacturer of oil and gas, and marine paints in the world.

Speaking on the development on the sidelines of the recently concluded Nigeria Oil and Gas Conference in Abuja, the company’s Chief Executive Officer, Mr. Mike Thompson, told Sweetcrude that with this feat, the company’s staff strength has increased from 13 at inception to current 130. Only five of these are expatriate staff.

Thompson also revealed that the Nigerian Stock Exchange, NSE-quoted company now manufacturers about 95 percent of such paints used for corrosion protection and only complements it with about five percent imports

The protective paints are used for the covering of floating production storage and offloading, FPSO vessels, platforms, buoys, other vessels, tanks, refineries and a host of others, while also carrying out facilities upgrade.

He said that getting quoted on the NSE meant that the company moved up from 60 percent foreign ownership to now 70 percent Nigerian ownership since it got listed on November 2, 2010.

He further disclosed that the company is also involved in project management, technical support by undertaking inspections throughout the tenure of the project, procurement services relating to plants, tools, equipment and consumables for coating projects as well as training.

Thompson explained that with regard to training, PCMC “offers formal training and certification of application personnel in the fields of coatings, painting, blast-cleaning and supervision,” adding that all its courses are globally certified by the UK’s Industrial Coatings Applicator Training Scheme, ICATS.

He said that PCMN in October 2011, became the first training centre for ICATS in Africa. “We are also Oil and Gas Trainers Association of Nigeria, OGTAN-registered, and with our ICATS certification, anyone trained by our company can work in the United Kingdom, UK,” he added.

Growth challenges
Speaking on the operating environment challenges, the company’s Chairman, Chief Sylverius Okoli, said all that the company needed to enhance capacity utilisation still as low as 20 percent is greater support from the Federal Government and the International Oil Companies, IOCs.

He said the locally manufactured paints are at a disadvantage because of the imported cheaper paints. He argued that if government could impose higher duty on these imported protective coatings, the locally manufactured ones would be able to compete more favourably.

In addition, Okoli noted that if the IOCs, in line with the Nigerian content policy are able to source their protective coating locally for their various operational equipments, it will go a long way in boosting indigenous capacity.

He noted that all the protective coating used by the IOCs for the buoys, platforms, FPSOs and other vessels are all imported, mainly from the Asian tigers, who build these facilities, thereby increasing capital flight from the economy but also exporting huge employment opportunities.

He said, “Government can raise duty on oil and gas paint products from the current 20 percent to about 80 or even 100 percent duty to create a level playing field for all operators. If this happens, we not only will be able to generate hundreds of more employment opportunities, but also we will be able to compete globally. Beyond these, we can even export not just our expertise but also our products to the sub-region and beyond.

To quantity what government and IOC support can do for the company, the chairman noted that last year, PCMN was the largest growing stock on the NSE. “We went from 52kobo per share to N1.91k at the close of trading in 2012.”

With such high prospects, he said the company wants “to focus more on providing all the protective coatings required for the oil and gas industry including FPSOs, and LNG vessels .” He added that despite the high cost of the locally manufactured products, the value addition is higher in terms of “payment of taxes, employment generation and in-country capacity building.”

Besides, he noted that the pay back for the additional costs is less than a year because of the spiral effects in the economy.