Industrialised economies such as the United States and Germany were built on manufacturing innovation.
Ford Motor Company, for instance, built cars and developed infrastructure of dealer-franchisers, gas stations and better roads to support its vehicles in the 1910s and 1920s. Firms such as Siemens, Opel and Bayer created value for the German economy, employed thousands of workers and developed infrastructure to aid future firms.
In Nigeria, some companies are replicating this model, even though they are silent and unsung.
One of such companies is Tranos Contracting Limited, a manufacturing and engineering solutions provider.
This company was founded 11 years ago by a young entrepreneur, Jude Abalaka, who has now become one of the pioneers of Nigeria’s industrial revolution. Before Abalaka founded Tranos, he had established an older company with friends, with a view to providing oil and gas services.
Since 2008, Tranos has become a known name in innovation, with the company producing special generators for telecoms companies.
In December 2018, the firm developed a new line of switches and sockets, making it the first Nigerian company to manufacture them. The switches and sockets were designed to meet the demands of any form of device connection— whether UK or US standards.
“We decided to build something that can work without an adaptor, both for the US-made devices and UK devices,” Abalaka said at a press conference in October 2018.
Tranos’ specialised products and services are in high demand today by multinationals and large enterprises.
Speaking in an interview with BusinessDay, the managing director says roughly 11 percent of 25,000 functional base stations in Nigeria run on Tranos’ power solutions.
“We have generators scattered all over the country,” he says.
He adds that the firm has worked with one of the major multinational corporations involved in power devices and appliances.
Tranos employs about 160 workers in different cadres and over 98 percent of them are
Nigerians, which is a clear testament of the manufacturer’s local content mien.
Tranos sources over 50 percent of its raw materials locally and designs products to suit the demands of the local market.
How easy has it been for the solutions provider to source local inputs? Abalaka responds that it has been fulfilling but challenging at the same time.
“It is not very easy because sourcing of materials locally does not imply they are being produced locally.
“One of the challenges is the standard of the product, example of which is the sheets. Getting specialised items like stainless steel is difficult,” he notes.
Local input preference is gaining traction in the manufacturing sector, with utilisation of local raw materials standing at 56.6 percent in the first half of 2018, according to the Manufacturers Association of Nigeria (MAN). Companies like Tranos are responsible for this.
However, some manufacturers worry about the quality of locally available inputs.
Abalaka believes that quality and availability are two key issues that must be worked on to put Nigeria on world’s manufacturing map.
“There are some things that cannot be found yet,” he says. “For example, common types of stainless steel are 304 and 316. Getting to the market, the seller may not know that steel has grades. So, after telling him what you want, he will offer something else.”
He says that quality is interwoven with availability.
Tranos is investing a lot in research and development (R&D) and has an engineering segment, which finds solutions to clients’ issues and ensures they are solved within the shortest possible time.
“For example, we sell special generators to telecoms. The R&D of that system took about 42 months.”
He points out that the company had to do a lot of iteration as the best components and engines were selected from different customers. He further explains that till now, power generation systems are still being created and developed for telecoms, though it is fuelled by LPG gas at the moment.
“R&D is a regular part of our work because whatever will be produced in two years must have been worked on earlier,” he discloses. Abalaka believes that Tranos offers a number of solutions to the Nigerian market.
“Although Tranos started with oil and gas, it has now diversified. So, currently, we make products for generator companies such as soundproof enclosures; packaged sub-stations for power distribution; diesel generators to battery cabinet, to distribution boards for telecoms companies, and various other things,” he enumerates.
“Now, we have switches and sockets for domestic and commercial markets and also warehouse racks, accessories for solar panels, and many other things. Therefore, we produce various things which can be done because of the in-house design and development that we have. We are able to use our resources for a wide range of markets simply because we know how to listen to the customer and develop solutions based on our capabilities.”
He, however, explains that Tranos has two groups of products which fall into business-to-business (B to B) and business-to-consumer (B to C) categories. Up till December 2018, the company was mainly B to B, even though B to C was done but mainly on special requests.
The company has been able to source financing from the Bank of Industry (BOI), re-investments and shareholder funds.
Every manufacturer in the country is saddled with different kinds of challenges.
For Tranos, the big issue is the supply chain, which starts from availability of raw materials to the logistics of getting the goods across from the supplier. It also involves clearing of goods, local deliveries, bad roads and sometimes foreign exchange availability.
Currently, the firm’s capacity utilisation, which fluctuates from time to time, is 50 percent.
Tranos takes training and capacity building of staff members very seriously, says Abalaka.
“For us, training is a continuous thing, and I believe that most people come to work and try to put in their best. So, to an extent, the quality of their functions is to the best of their knowledge, which means it is in the interest of the company for people to know as much as possible to increase productivity.”
He adds that such training goes beyond the classroom, as it may involve spending time with colleagues or supervisors.
He further notes that the company liaises with foreigners and other organisations on training, depending on what is being learnt.
Tranos’ products have been adjudged efficient and effective, because its team put in a lot of effort before producing goods.
The managing director says unlike many firms in the country, Tranos does not see Chinese firms as competitors.
“We do not compete with low quality products, not even with the Chinese market.”
So far, the company has managed to survive Nigeria’s economic vicissitudes, owing to value-creation.
“Our focus on creating value for customers is key, because value creation for customers is giving them something they need, which will keep bringing them back to you,” the MD states.
Although the economy is down, the company’s value-adding capacity has kept customers returning, Abalaka says.
He believes that value-creation is foundational for the firm’s survival as well as other issues such as trained and motivated personnel, and facilities.
The MD says that Tranos and other private sector players are only asking the government to come up with policies that will protect their investments.
“As a commercial entity, we don’t necessarily want government to do things for us, but looking at it from the perspective of policy direction, I think that some policies do not necessarily work in our favor, especially with regard to raw materials.”
One example is the duties on some imported raw materials which were increased to enable local manufacturers of those inputs to have a competitive advantage. Unfortunately, this hasn’t produced the desired results, as there are issues with local availability of such raw materials, he explains.
“So you either have to wait, or you import and pay higher duty rates. Also, there is a question of price competitiveness. Imagine that we want to start making cable trays and using pre-galvanised steel, which in places like Asia and Europe have fixed prices per ton. In Nigeria, if you want to buy from producers directly, you have to wait for five to six months because the demand is not that much.
Odinaka Anudu
