PACEGATE limited is a company that manufactures steel drums and supplies lubricant additives and industrial greases. Umesh Amarnani who is the managing directors of the company in this interview with Olusola Bello gives more insight into the operations of the company in Nigeria. Excerpt
How long has PACEGATE been in operations in Nigeria and what was the concept behind its establishment?
PACEGATE started operations in Nigeria in 2017. Our technical partner in Dubai that has been manufacturing steel drums, trades in additives lubricants and oil and gas services for the past 25 years was keen to enter the Nigerian market. After our due diligence, we realised that there was a good opportunity to establish a steel drum factory in Nigeria. In addition, Nigeria has a growing population and the government is trying to encourage more local industries by raising duties of finished product import like lubricants so the demand for steel drums will continue to grow over time.
What is the nature of these products/services, and who are your clients for these products?
PACEGATE offers UN Certified steel drums and we have four types. Closed top drums for industrial lubricants, closed top drums with an option of internal coating for locally blended chemicals or chemicals imported in bulk and repackaged here and Open top drums for Styrene Acrylic and Industrial paints. We also have Open top internally coated steel drums for the Agricultural Industry to package orange pulp, mango juice, pineapple pulp and also Soya Lecithin- used for animal feed. Apart from steel drums, we offer lubricant additives and industrial greases and all our products are targeted at industries in the lubricants, chemical, paints, and oil&gas sectors.
How does one differentiate your products from your competitors?
We have two key differentiating factors that have set us above our competitors. First, PACEGATE is the only UN Certified steel drum manufacturer in Nigeria. This UN certification is a mandatory global requirement for steel drum exportation and highly required by our clients. Secondly, we operate a brand new state of the art factory which is fully automated.
What is that UN certification and why is it relevant to your business?
UN certification confirms that the drums have gone through rigorous testing and certified to carry precious liquid or solid which can either be hazardous or non-hazardous. This certification confirms that the drums are environmentally friendly with no spillage or leakages. The certification also ensures no contamination of products even if stored over a long period of time. To achieve this milestone, our drums were fully tested abroad and like mentioned earlier, only UN certified drums can be exported, which gives us a competitive edge as our customers can fill their products and export them in drums meeting international packaging standards.
What are the advantages of steel drums over plastic drums?
The advantages are numerous. First, steel drums are cost-effective, safe and secure. Even though there is a general misconception that plastic drums are a cheaper alternative in relation to steel drums due to its re-sale value. However, steel drums place more value. Steel drums are an ideal way to package liquids and provides safety for exporting products. Also, steel drums are versatile as the chances of breakage is low when compared to plastic drums. Despite various environmental concerns of steel on the environment, steel drums are environmentally friendly. For clean environments, the difference between plastic and metal must be considered. Metals can always be recycled creating a sustainable environment. Steel drums also last longer than glass or plastic because they are corrosion resistant, and do not leach chemicals when exposed to sun/heat. Countries across the world are moving towards a green environment. For example, in India, the use of plastic bags have been banned as they are not environmentally friendly. Metal is the global standard and this is what we believe should be replicated in Nigeria.
What are the major challenges you encounter doing this business in Nigeria?
The lack of awareness and education in the market that steel drums are available locally and at reasonable prices,.and of course the benefits of using steel drums over plastic drums are some of our major challenges.
Do you have problems with power supply? How does it affect your bottom line?
Quite favourably, we are located in an Industrial area, so there is constant power supply from the Discos. We run the factory on gas which is more cost-effective and environmentally friendly. Gradually, as we increase our production, our economies of scale will enable us to cover costs, making us globally competitive.
How has PACEGATE been able to maintain top-notch products, despite the challenges?
Quality is key and we can never compromise on this especially as we service top companies. To ensure consistent quality, we work with partners overseas to import our steel. Also, we ensure we have adequate stock to constantly offer our clients the best quality without compromise. Furthermore, we ensure our employees are trained regularly from a technical point of view.
What is your policy on safety, health, and environment ?
PACEGATE is an ISO 9001:2017 certified company. Asides compliance to this international standard, we also have an elaborate Health and Safety policy, compliance which is driven by top management down to every staff. We have an HSE Officer who is well trained to monitor compliance. We take safety very seriously and we operate with the highest standards in all our processing and manufacturing. Due to the level of enforcement, we attach to HSE at PACEGATE, we are proud to say that there has not been any record of a crisis situation since inception of the business.
With the advancements in technology will you still be relevant 10 years from now in the market?
Steel drums have been relevant since the last 50 years and will continue to be relevant for the next 50 years. Nigeria is going through the beginning of an Industrial revolution because the government is increasing duties on finished products and thereby encouraging local industries. With the emergence of more industries, the demand for industrial lubricants and steel drums is bound to increase. With this, we believe the steel drums industry will be relevant for a very long time. Although technological advancements could lead to the digitization of this industry, we constantly keep up with trends to maintain our position as leaders in the industry and we will innovate as the industry evolves. Even though when electric cars become popular which is in some 30-40 years away, there may be a drop in auto lubricant sales, but there will be an increase in sales of industrial lubricants.
Does PACEGATE Limited have expansion plans?
As an innovative brand, we ensure to keep evolving to offer clients a vast array of services in the industries we operate. Asides servicing the downstream oil&gas sector, we plan to introduce our drums to the agricultural sector for storage of different kinds of fruit pulp. As a business, we are open to exploring opportunities of investments in the agricultural and chemical manufacturing sector.
