With $35m investment in flagship facility, Cummins is positioned for leadership in Nigeria- Pimi
Cummins West Africa Ltd, the Nigerian outlet of the global manufacturer of engines, filtration, and power generation products, recently launched a multi-million dollar facility, marking 100 years of its parent company’s operations globally. The investment shows long-term commitment to Nigeria and a move for market leadership in Nigeria, says Thierry Pimi, Cummins’ Africa & Middle East Executive MD, in this interview with SEGUN ADAMS.
As you mark a century of operation globally, could you talk about the significance of this moment?
It is pivotal; it is a great moment for us as a company and for our employees here in Nigeria. Our 100-year celebration is about our employees, they are the ones that carried us for a century through their dedication, hard work, innovation, and living our values.
We are celebrating our employees, and ensuring that Cummins is geared up for our century, and ready to challenge the impossible over the next decade.
In Africa, Nigeria is the single biggest market for our competition, and winning on the continent would be impossible without Nigeria.
We have been here in different forms over the years but as a 100 percent-owned Cummins entity, we have been here since 2015 and we are stepping with the launch of our state-of-the-art $35million flagship facility. This investment is our strongest signal to the marketplace, our employees and the business community that we have taken a long-term approach to Nigeria.
How has the journey in Nigeria been so far?
It is been an exciting journey. Nigeria is a very competitive market and is the single largest. Here in Nigeria, we used to have independent dealers importing our goods and selling them, and then we came as a Joint Venture, partnering with A.G.Leventis which was our first direct footprint in Nigeria. The JV lasted about six to eight years, and then we decided to move forward differently and bought A.G.Leventis’ stake in the JV.
In this journey, we have had to basically build the Cummins culture and bring processes here, and today we intend to lead. Today we are offering products that are more specific to the Nigerian market and that would land in Nigeria at a more competitive price. We are also equipping our Nigerian team with all the tools in terms of commercial, technical and leadership abilities.
Does Cummins have local partnerships in Nigeria?
A generator set is an accumulation of several parts and sub-components, and in places where we have built massive manufacturing and assembly capabilities, we needed to develop a critical supply base; people who can provide the canopies for generators, mufflers, bolts and the different components.
Because we are a premium product we have a guaranteed standard of quality our customers expect from us.
We needed to make sure we guaranteed that quality through our supply base, and that was the critical first step to enable us to assemble in Nigeria.
That is one avenue of partnership, the other is to expand our footprint around the country in terms of sales point-we do not need every sales point to be a Cummins-owned outlet, we could also have service, sales dealers and vendors to occupy certain territories.
Asides engines, filtration, and power generation products, Cummins plays in the marine space. Could you talk briefly on the re-launch of your marine business?
After power generation, marine business is our single biggest opportunity in Nigeria for many reasons; from the oil and gas activities in some states in South-eastern Nigeria to the trade and logistics routes that lead to Nigeria which is a big economy with major seaports and a high volume of commercial activities.
A lot of the big boats are powered with engines from Cummins and we can remake those engines and offer critical interventions in the engines.
Our branch in Port Harcourt is essentially focused on that business but we are developing that capability in Lagos as well.
In terms of employment and social impact, how much is Cummins felt in the communities you operate here in Nigeria?
Cummins has so far invested $350,000 on corporate responsibility initiatives. In fact, for us giving back to the communities is one of the strategic goals of Cummins in this part of the world; just as important for us as becoming a leader in the market that we play in, diversity and inclusion, and unleashing the right continental talents.
So giving back to the community is not a “give-to-have”, it is not something we do after we have made a profit but it is something we do just as we pursue leadership in the domestic market. At every site where we have more than 20 employees, we have a local community involvement team that scans the community to identify needs. In Cummins, every employee spends four years of company time to be involved in voluntary activity in the community.
You have talked about opportunities in the Nigerian market along with your plans to position for leadership, but what challenges have you encountered and how do you think they can be addressed?
The challenges are many just like in many markets of similar size as Nigeria. Wherever you see big opportunities there will be big challenges too, but for us, the way we approach it is through our values. Cummins is a company of strong value; we have five core values that are our compass and it is not difficult for a Cummins leader to make decisions, whether it is walking away from a business opportunity, because of corruption involved, or taking a long-term view and contributing to improve the community through caring or bringing innovation to the market to help our customers meet their goal.
Engines and generator products are highly technical products so we need qualified technicians but most of the time we do not find people here who are properly trained to immediately take up technical jobs, even among the graduates. We have had to invest in retraining them which sometimes take years, at the end which some of the trainees leave the company for competitors or other places. That is a challenge but we feel it is okay that we contribute to building those capabilities locally. The other one commonly referred to is corruption, but I would like to insist it is not an issue specific to Nigeria but in many other markets-not just emerging markets.
Since Nigeria exited recession, growth has not been very impressive and this is affecting the profitability of some businesses. Are Cummins’ sales also affected?
Yes, definitely. As you know we do a lot of business-to-business (B2B), a lot of our customers, if they are going through a difficult time, would naturally reduce or renewed their orders from us. For instance, a company that would have replaced their generator may delay it for one more year. We are feeling the impact of sluggish economic growth.
Our business by nature is cyclical, not just in generators but what we do is to make sure we manage the business smartly, we make the right decisions however difficult so that after economic recession cycles we emerge stronger. We know the market will rise again; we just need to do the right thing so when the slow-growth cycle is over we emerge in a good position to compete and win.
Could you speak to gender inclusivity and representation in your company? I would love to know what percentage of your workforce is female.
Overall today, we have around 27 percent, our goal is to be about 35 percent by 2021. It has not been easy and that is why we made it front and centre especially gender inclusion in our area of business operation which is African and the Middle East.
As you know, the diesel or generator industry in our region is not one female just starting their career would naturally think because culturally it is thought of as for male folks.
That said as I mentioned Cummins is 62,000 employees there is no single job at our organisation that a woman cannot do because of gender barrier; whether it is being CEO, a technician, design engineer, application engineer, finance or human resources leader, every single job can be done by a woman. It would interest you to know our plant manager here in Nigeria is a female.
What are the emerging trends in the energy space and how are you adapting. Also, what is the next phase for Cummins in Nigeria?
The trend is that there will probably be a move towards gas generation and towards 2 to 10 megawatts power plants in the country as opposed to having generators in every household or having a massive 400-megawatt plant. Just this year, we launched a new product the HSK78, which is the most efficient product in its range and is about 2,500-kilo watts.
As different countries transition towards alternative fuel- we believe from diesel there would be a move towards gas and on a longer-term there would be solar and other elements in the energy mix- internal combustion engines are still going to have a role to play in our part of the world for a foreseeable future maybe more towards gas and more hybrid solution and distributed generation.