With over 75 years of operations, Dorman Long Engineering has cemented its place as a builder of local capacity through customer-driven solutions and world-class service delivery. Timi Austen-Peters, chairman of Dorman Long Engineering Limited (DLE), in this interview with Josephine Okojie, spoke on the company’s decades-long operations and the state of Nigeria’s steel fabrication industry.
Can you share an overview of the company and its core operations?
Dorman Long is a 75-year-old steel engineering company that at its core supports its clients primarily with fabrication and asset management services. We also provide procurement, automation, and process enhancement services with the support of the large number of international OEMs that we represent in the region. In addition, we have extended our service offerings to include industrial-grade galvanising for our clients across industries.
How has DLE carved a space for itself in an increasingly import-biased industry and foreign organisation-centred market?
DLE has successfully built its reputation as a home-grown solution to the provision of products and services for which Nigerians may traditionally have sought imports or foreign support. It recognised that a system where Nigeria remains heavily dependent on external talent to drive our core industries creates a degree of vulnerability in our operations and to the energy security of the country.
With the support of the NCDMB, we determinedly and aggressively pursued a skills-transfer regime that saw Nigerians understudying and acquiring relevant skills from an originally expatriate-dominated workforce, gradually reducing and ultimately almost totally phasing out a hitherto dominant expatriate talent pool.
In our fabrication business, we have also been deliberate in acquiring and maintaining the standards that ensure that we can produce code-stamped vessels and perform the requisite maintenance in-country as may arise for our clients.
How is your organisation investing in its operations to meet its client’s needs and demands?
The development of our galvanising plant here in Lagos and continued capital investment in equipment like CNC machines and more is another way by which we work to stay ahead of the needs of our clients.
These deliberate efforts to build capacity have been priceless and we are delighted to have built a reputation of supporting our clients to achieve their technical and commercial objectives using a local workforce and local technical equipment, thus obviating the need for foreign-exchange-denominated goods and services.
With the afore-mentioned efforts, we have been able to execute work in Nigeria that had hitherto been undertaken only by expatriates or imported at great cost in FX, often achieving up to 40 percent cost savings for our clients. In this way, we enable our clients to conserve their FX and provide a level of after-sales support that would not otherwise be possible using expatriates or foreign companies.
As proof of the success of this concept, even during the COVID lockdown, because we rely on the local workforce, we were able to continue the maintenance of critical assets for our clients and even managed to fabricate an entire pressure vessel. This contribution to Nigeria’s energy security and independence cannot be overstated.
How is the current economic downturn impacting DLE’s operations, especially with the shortfall in the production of steel?
Given the limited steel production in Nigeria, Dorman Long is obliged to import steel, procure from local brokers, or rely on free-issue from our clients. Either way, we are exposed to FX and logistical challenges because steel has to be procured and imported whilst navigating the challenges of customs and Nigeria’s transportation network. With enough creative thinking and planning, we can surmount these challenges.
The most important aspect for us regarding steel is its provenance. Our builds are highly specialised and the origins of the steel used are of utmost importance. We remain cognizant of this and ensure we obtain the appropriate grade required for our clients.
As a leading fabrication and engineering, procurement, and construction (EPC) company, what key projects has DLE executed in Nigeria and sub-Saharan Africa?
We are delighted to have been a part of many landmark projects in Nigeria. Historic projects in which Dorman Long has been involved include the first Niger Bridge which crosses from Delta State into Anambra State at Asaba/Onitsha. Dorman Long has also provided structural steel works for many industrial buildings, including most warehouses, constructed from the 1950s to the early 1970s in Ikeja – Lagos State and Trans-Amadi Industrial Estate in Rivers State.
Today, Dorman Long continues to play a leading role in meeting the needs of the Oil and Gas industry. We started with some of the early butanisation projects, fabrication of all forms of pressure vessels, and maintenance of FPSOs. We have been involved with every train of the NLNG development up to and including the current development of NLNG Train 7. We recently fabricated end-to-end in our yards one of a set of shallow water CSPs to be fabricated for the first time in Nigeria.
Beyond oil and gas, Dorman Long is currently supporting the Telecommunications and Power industries with the fabrication of towers. We support other heavy industries by providing a ready local supply of international standard products, especially structural steel, and services that previously could only be obtained as imports. As global steel demand stalled in recent years due to a manufacturing recession in developed countries, there has been an increasing focus by global steel players on Africa as a developing region.
How is DLE responding to this shift in market dynamics?
We are pleased that with this new focus by global vendors, we can procure steel from markets that previously did not serve us and now sometimes on much more favourable terms than our historical vendors had offered us.
As the local needs for steel escalate, these improved trading terms, sometimes including vendor financing, stand us in good stead to be able to efficiently meet the needs of our clients. According to industry outlooks, the steel fabrication market is estimated to grow at a 4.54 percent CAGR to reach N15 billion by 2030.
What role do you think Africa will play in that growth and how does your organisation plan to capitalize on such?
With its youthful and growing population, and emerging middle class, Africa is in the process of a massive population growth spurt necessitating the rapid development of energy, transport, housing, and other forms of infrastructure to meet its growing needs. Inevitably, much of the future demand for global steel fabrication will come from Africa.
Dorman Long is positioning itself to meet these needs by investing significantly in expanding its footprint, capacity, workforce, and areas of operation. In doing this our focus is not only on Nigeria, although that is likely to be a significant portion of Africa’s demand, we are also establishing operations in other Sub-Sahara African countries so that we are best positioned to meet their needs as their demand rises.
How is DLE investing in the development of local supply chains to ensure resilience in the face of global challenges?
Dorman Long has worked with key local vendors and sub-contractors for two decades. Assuring consistency of orders and providing as much visibility as possible to future work allows us to plan with them and therefore permit them to make such necessary investments as may be required to meet our needs. This includes holding inventory and other processes which enable us to avoid getting bogged down in the type of supply chain challenges that plague manufacturing in Nigeria.
How does DLE ensure quality customer delivery?
We maintain international best-practice standards by deliberately pursuing and maintaining certifications to back our skills and capacity. We listen to feedback from our clients and have formal lessons-learned sessions from executed projects to continue to improve our already excellent quality. By paying attention, we know what our clients need and how best to make sure that they are best served.
We are thus able to plan appropriately to ensure that their every need is met. Dorman Long’s staff and operations are certified to the highest Nigerian and international standards to ensure this. We invest significantly in our human capital to make sure that our members of staff are fully aligned with our values of safety, integrity, and competence. We also invest in the most cutting-edge equipment available needed for the execution of our work. Overall, we seek to achieve our client’s commercial and technical objectives in a safe, cost-effective, and timely manner.
How is DLE innovating its production processes to achieve significant efficiency and sustainability gains?
Agility is one of our key traits. Dorman Long has stayed abreast of current developments, evolving and reinventing itself as the demands of its clients, as well as methods of delivery and applicable technology, have developed. For example, we were at the just concluded Offshore Technology Conference in Houston where many innovations were showcased, and we made important connections that we will leverage to access and introduce new technology in our operations.
Dorman Long has constantly invested in the most modern technology to enhance its efficiency in fabrication. Most recently, Dorman Long has bought many CNC machines, state-of-the-art welding machines, and other equipment that enable us to achieve the greatest efficiency.
By planning to decarbonize our operations instead of relying on the traditional electricity grid and standby generators, Dorman Long seeks to ensure that its operations will remain sustainable.