In this interview, Mr. Norbert Chukwumah, the Managing Director of Nigeria Machine Tools Limited (NMT) Oshogbo, said the core investor who took over the moribund company from the Federal Government in 2007 has upgraded the facility at enormous cost; it has commenced full production and is ready to play its part in industrialising Nigeria. Excerpt:
What is the company’s profile?
NMTL was founded in 1980 in Osogbo, Nigeria as a joint venture between the Federal Government of Nigeria (“FGN”) and the Indian government-owned Hindustan Machine Tools (International) Limited (“HMT”). The Company commenced operations in January 1983 with the primary objective of machine tools production and assembly. In 2007, a Private Group acquired 70 percent of the Federal Government of Nigeria’s shares under the privatisation programme thus bringing the company under private ownership and control.
As at the time we took over the company from the Federal Government in 2007, we paid N1 billion being the value of the 70 percent federal government’s share in the company. The federal government still retains 15 percent, Hindustan Machine Tools India 15 percent and the new investor 70 percent.
With the upgrade, what is the company’s present capacity utilisation?
I want you to understand that the facility has been down for sometimes. It has taken us a long road to get to where we are: to rehabilitate, to expand and to retrain people we hired. We did all the turnaround within a very difficult industrial environment.
Nevertheless, our capacity utilisation has risen from a very low point to almost 80 percent. Our foundry is now operating at 70-80 percent while our training institution is operating at the same level of capacity. On the machine tools side, we have achieved 60 percent of our production capacity. We are now at the point of reintroducing the company to the industrial community in Nigeria. We are telling everybody “Nigeria Machine Tools is back in business.
Six years down the lane, what can you say about your balance sheet?
It is bad; in fact, very bad because of the investment that have gone in and when you expect to get returns in relation to investment. Manufacturing is a long-term investment.
You can’t invest in manufacturing and expects to get your returns on investment tomorrow. A machine can serve you for 50 years; if you have one why do you expect the return in one year? It is not possible. So in terms of our balance sheet, it is bad but from my perspective it is healthy because when I look at the future, it is a long term investment.
Also, if you borrow funds at 25 percent interest rate it is a drain on the investment. Locally, I don’t know how many banks that can lend manufacturers for five years. It takes a committed investor to put his money in manufacturing; it has to be somebody who understands the nitty-gritty of manufacturing processes. No country can industrialise without a proper machine tools. I see Nigeria industrialising; right now, we are positioning ourselves not only to act as a catalyst for industrialisation but to take advantage of the opportunities when it eventually comes.
What are your ranges of products, your clientele base and how do you move your goods from Oshogbo?
NMTL now produces flanges and stud bolts for the oil and gas industry, assembles and manufactures machine tools, possesses extensive machining capability (utilising its numerous advanced CNC and conventional machines), assembles tractors for the agricultural sector and manufactures ancillary tractor implements. The foundry produces municipal castings, gratings and manhole covers, brake blocks for the railways, machine spares, ball crushers for the cement industry and quarry operators and a range of other foundry products as determined by the needs of the client.
There is also a newly installed state of the art PTFE coating plant and hot dip galvanising shop to ensure products are finished to client specification. The company also has a flourishing fully equipped training school which is open to the public as well as for industries that require training for their technical manpower in a wide range of technical skill sets.
Locally, the construction industry buys from us.
That is in relation to our foundry products; also oil and gas industry patronises us for our flanges and boats. Of course, governments and farming cooperatives buy our tractor and equipment; the cement companies and quarries use our flanges. Our break plugs are used by the railway corporation and they attest to the quality of the products.
As at now we are getting enquiries from Europe for our products. We have entered into partnership with the Nigeria Railway Corporation to move our products across the country. That solves my problem of trucks on the road that are never cheap.