In this interview with reporters, the Managing Director of National Trucks Manufacturers (NTM) Kano, Ibrahim Bayero, said increasing the volume of local assembly plants is the only way to get the local component manufacturing companies working again. DAVID AGBA was there.
How can the component manufacturing companies be revived in Nigeria?
Are we talking about passenger cars, are we talking about trucks, are we talking about pickups. You have to look at the individual vehicle and not give a generalization-components-as if that applies to all vehicles. It does not! All passenger vehicles are different, different makes, different models, and different manufacturers.
The brake pads of heavy duty trucks are different from the brakes pads of medium duty trucks. They are also different from our light duty trucks. Brake pads components depends on the type of vehicle you are talking about. Generally, speaking a complete vehicle can be broken down into 2,500 separate components. Out of those 2,500 components, how many can be made locally and at approved international and manufacturers standards? Different manufacturers have different standards. Those manufacturers from Japan for instance, will have a higher level of standard than say one from the Middle East and South America.
I know in Nigeria we had well over 50 component manufacturing companies in the past. Everything from brake pads, wipers, bumpers, windshields and even cabins for heavy duty trucks. National Trucks Manufacturers had a fiber glass company which was functioning in the 80’s and well into the 90’s. Before privatization it was producing components for PAN in Kaduna. I think it was mostly the front and rare bumpers. With time and as volume increases in all the vehicle assembly plants; then components manufacturing will come alive again.
Without a vibrant steel industry then it becomes virtually impossible?
Yes, steel industry is important but we cannot say we do not have that today. When you mention steel industry in Nigeria everybody’s mind goes to Ajaokuta, Delta steel is functioning but not at its optimal. Why? Who are they going to produce for. Steel is a base material produced from the raw material. It is produced to a specific standard. They do not just role out steel and perhaps it can be used in construction. You have to have a specific requirement to manufacture a specific steel for the auto industry. The auto industry is just growing as we begin to increase our volume, the steel industry, the component manufacturers will also grow. There is a sort of domino effect.
If we are not assembling vehicles here, there would not be an after sales market for those vehicles, there would not be a need for people to develop skills in the servicing and maintenance of those vehicles, there would not be a need for people to educate themselves on the various spare parts needed for the maintenance of those vehicles. Components manufacturing is on the ground but are we ready to take off. However, they need vehicle assembling plants to reach adequate volume which will now make it economically viable for local addition of those components. If an assembly plant is only rolling out 1,000 vehicles a year, it is less profitable for them to purchase local components.
Take some of the simplest one, which is brake pads even tyres. If you are buying tyres for 1,000 vehicles as compared to 10,000 vehicles a year, then buying locally would not be cost effective. We need to put a lot of focus on increasing the volumes of local assembly plants before we can try to insists on local components addition. I am not saying it is not possible. It is in Nigeria, we are capable of manufacturing those components. We did it before, some companies are still doing it. We have some companies that are into the manufacturing of brake pads. One of them still survived from the 80’s from the hay days of the auto industry. We have done it before; we can do it again with the right policy, with the right implementation with the right enforcement!
What will you be advocating as a stakeholder?
We are looking at things in general. There are some certain kind of waivers we would not be supporting. It is like Nigeria we are a melting port of so many languages and tribes. There are certain areas where waivers are necessary. But in the importation of fully built vehicles, we are not in support of waivers that area. The reason being that we have for a very long time been capable of assembling majority of those vehicles. At National Truck Manufacturers we have been into with the assembly of vehicles since privatization in 2014 after it was privatised in 2013. Before we started PAN was still operational. Nigeria has always been into the assembly of vehicle what change was the policy the I make it non – profitable to vehicles assembly in Nigeria.
That is why FIAT pulled out, that is why Volkswagen pulled out, that is why Mercedez pulled out. What is now different that has encouraged all these international companies to either come back or new ones to show interest in Nigeria. And that’s because of the policies that were introduced two years ago. In July 2014, the duties on second hand vehicle wasn’t implemented till January thus year. By June 2015, import duty on second hand vehicles is suppose to be 35% duty plus 35% levy but due to the current position we are in-no finance minister – custom couldn’t implement that policy because the Minister of Finance has to sign and issued a circular to the various agencies under the ministry. So the 35% levy on second hand vehicle in the auto policy can be review and the aspect which has not been visited can be put into place.
How long does it take to build a complete vehicle?
We have various vehicles ranging from the 1 ton to the 40 ton trailer head. If you take the 40 ton trailer head, we can have 5 – 7 unit rolling out per day. That is working on a 10 hour daily shit. At the peak of our activity, we were rolling out 7 unit of the 40 ton trailer head per day. Fully assembled, fully tested. While the light duly trucks can go to 12 – 15 per day. But again if you want to increase the capacity output per day, it not just a question of increasing the staff output but increasing the production hour per day. We can run two 8 hour shift in that way we increase our output.
Originally, what’s the production capacity?
Originally for the heavy duty truck its 7,000 per annum. And for agriculture tractor; our facility has the ability to roll out 5,000 per annum. And that is on our single 8 hour shift per day. And we can increase that if there is need to increase output. Presently we are rolling out a thousand unit per annum which is well below capacity utilization. And again this is not because the product is not known or of low quality. The heavy duty trailer head we assemble here are used by virtually all haulage company in the country. In fact the manufacturer is China National Heavy Duty Truck Company (CNHTC), the brand is Sino truck and model is Homo. The Sino Truck is the highest selling truck in Nigeria today. Dangote industries alone has more than 4,000 units of that brand.