Saturday, May 16, 2015

Agonies of Nigeria’s pre-paid meters manufacturers

quantum key prepayment electric meter, paying for electricity as you use itFor Nigerians who invested in the local production of pre-paid meter, these might be a very bad time, as continuous importation of the products threaten to keep them off the market in a very short while, Ayodele Samuel writes.
Although the Federal Government has directed all the electricity distribution companies in the country to patronize local manufacturers in line with the policies put in place by government, designed to ensure the accelerated development of the industrial sector, local manufacturers of pre-paid meters are still wallowing in poor patronage.
Even though they needs about 50 percent market share to break even, most DISCOs still derived pleasure in importing pre-paid meters.
They believe halting the importation of meters into the country will promote growth in local content by supporting local manufacturers, which will in turn, spur improvement in quality and job creation for the teeming unemployed youths in the country.
Like Unistar Hi-Tech Systems Limited, a local pre-paid meter manufacturing company, it has retrenched more than 70 per cent of its workforce due to low patronage of its products by electricity distribution companies in the country.
According to the Vice-Chairman of the company, Atilade Bolarinwa, the situation followed the low patronage from investors in the distribution segment of the national electricity sector.
He lamented that the situation had made the company to stop production, saying that the already produced meters were now kept in a warehouse.
"Presently, the Ikeja and Eko Electricity Distribution Companies have not bought a single pre-paid meter from the company since they were privatized but we thank God the Ibadan Electricity Distribution Company (IBEDC) is trying. They have so far bought five thousand meters from the company since inception and we have over 200,000 meters on ground and we can't produce again until we sell the ones in the warehouse," Bolarinwa said
Unistar Hi-Teck System Ltd, Project Manager Mr Oludotun Taiwo, collaborated his boss that lack of patronage by distribution companies might force the company to close down.
Taiwo said that the firm now operates at less than 10 per cent of its installed capacity due to poor patronage.
"The company has the capacity to produce more than three million pre-paid meters in a year, but currently under producing due to low patronage, we have produced over 150,000 pre-paid meters which government nor any firm had applied for.
"We had staff strength of 100 workers apart from expatriates when we started in 2004, but most of the Chinese hands have left due to low patronage, we have been forced to reduce our staff strength to 40 and our product is of high standard when compared to the imported ones," Taiwo lamented.
In Momas Meter Manufacturing Company Limited (MOMCOL) the story of poor patronage is the same.
MOMCOL Chairman Engr. Kola Balogun in an interview with Peoples Daily said that the low patronage was stifling the growth of local industries.
"The story of poor patronage is still the same in meter manufacturing where foreign firms are better patronized and recognized by government agencies. I can confidently say that we local manufacturers of meters can meet our supply needs.
"I feel it important that Nigeria should stop importing electricity meters so that we can migrate from importing meters to manufacturing of meters of various types in Nigeria.
"In MEMMOL alone, we have a production capacity of 50,000 to 100,000 meters monthly, not to mention the production capacity of other companies in the same business,'' Balogun said.
"I can tell you that our company has 100 per cent local content in the manufacture of meters, even all our operations and the production processes are managed by Nigerians." He added.
Asked if the local manufacturers are enjoying government support, Balogun said "we have not received enough support from the government sector. Why should we import when there is a company that produces pre-paid meters here in Nigeria? We understand that the market is there, but the level of patronage has been discouragingly low. We need about 50% of the market to break even."
Secretary, Electricity Meters Manufacturers Association of Nigeria (EMMAN), Mr. Muideen Adebayo noted that his members out of sheer patriotism and numerous challenges confronting manufacturers had undertaken undaunted risk with borrowed funds on high interest rate to established world class factories adding that local manufacturers has production capacity of 1.2 million meters per annum with room for future expansion.
He urged government to create and make available at two per cent special intervention fund in form of soft loans to the local electricity meter manufacturers in order to create more jobs for Nigerians, boost the annual revenue earnings of Nigeria and curb capital flight to their counterparts from China.
For Raed Hassaniel ,Managing Director Elsewedy Electric, he wants the federal government to ensure that their businesses survives extremely harsh conditions by enacting protectionist law.
"Every year, Nigeria import in excess of 10,000 transformers from different countries yet, the manufacturers of transformers in Nigeria are struggling to survive. Energy meters are also skewed in favour of foreign companies despite the fact that there are capable manufacturers in the country".
However Chairman of the Ikeja Electricity Distribution Company Abiodun Ajifowobaje said the DISCOs are says willing to partner with any company that met its standard.
Ajisofobaje said that the company must also meet specifications of the Nigeria Electricity Regulatory Commission (NERC).
Aganga however, confirmed that his Ministry has received series of complaints on non-patronage and the influx of meters and transformers into the country by local manufacturers of these items
According to Aganga, "the misconception by Nigerians, that locally made products are of sub standard even when it is obvious that imported ones are inferior needs to be addressed using procurement regime as a tool to develop local patronage. Let us collectively ensure that we use local patronage as anchor to improve standards of Nigerian goods and services"
He added that for Nigerian Industry to thrive, we need to support a strong and growing local demand. It is essential to know that our local market provides a strong base, from which Nigerian products can refine their standards, build a strong base, and then subsequently proceed into the global export markets. Aganga stressed.
Commending the efforts of the local manufacturers for their commitment and resilience, Aganga urged them not to relent in producing quality products as government is all out to provide extensive infrastructure to ameliorate their challenges.
He noted that both the manufacturers and the Distribution companies must collaborate with each other to strive to make meter/transformer subsector a prosperous industry in the Country.

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