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Part 1 :A case study of paint manufacture in Nigeria Eng. S.I.C. Okoli – Protective Coatings Manufacturers Nigeria (PCMN). Measuring local content in manufacturing: A case study of paint manufacture in Nigeria. Overview. Measuring local content in manufacturing:

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Presentation Transcript
slide1
Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

Dr. Michael Warner – Local Content Solutions

Eng. S.I.C. Okoli – Protective Coatings Manufacturers Nigeria (PCMN)

slide2

Part 1 :A case study of paint manufacture in Nigeria

Eng. S.I.C. Okoli – Protective Coatings Manufacturers Nigeria (PCMN)

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria

Part 2 : Measuring local content in manufacturing

Dr. Michael Warner – Local Content Solutions

slide3

Overview

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide4

Overview of PCMN development

100% local manufacture

100% Nigerian ownership

Manufacturing license signed

PCMN becomes Plc

60% Nigerian ownership

Semi finishing

40% Nigerian ownership

Distribution license

Fully imported product

100% foreign ownership

2000

2002

2004

2006

2008

2010

2012

2014

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide5

Overview of PCMN personnel development

Number of staff

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide6

Overview of PCMN capacity development

New factory proposed 2015

Import / production levels

(litres per annum)

Capital expansion Phase II increases capacity

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide7

Importance of paint manufacturing

  • Global cost of corrosion > $2 Trillion per annum
  • Likely cost to Nigerian economy = towards $10 billion dollars per annum*
  • Nigerian investment to increase dramatically in next 10-20 years
    • Offshore oil and gas / onshore processing / transmission pipelines
  • Passing of PIB into law will release projects resulting in increased demand
  • PCMN positioning its capacity plans to capture a large % of market
    • Upstream / downstream and M&R activities
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide8

Local content levels in paint manufacturing

Nigerian heavy duty protective coatings market estimate

PCMN Projected capacity

Million litres per annum

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide9

License History

  • License manufacturing agreement entered into 15th May 2009
  • Covers manufacturing and use of registered trademarks
  • International Paint is a major supplier of protective coatings globally
  • Part of the AkzoNobel group with turnover > $ 18 billion
  • Extensive oil and gas experience globally
  • License agreement catered for
    • Establishing manufacturing plant in Lagos
    • Transfer of initial product range and associated technical support
    • Guidance on factory start-up and regular auditing
    • PCMN now accredited to ISO 9001: 2008
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide10

Advantages of license technology

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide11

Capacity Development - Challenges

  • Difficulty in forward forecasting
  • Associated Impact of stock on working capital
  • Capacity building needs to be proactive
  • Role of operators
    • Forecasting assistance
    • Identifying associated bolt-on opportunities
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide12

Capacity development (continued)

2000

2002

2004

2006

2008

2010

2012

2014

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide13

Capacity development (examples)

  • Addition of 2 off 2400 litres high speed dispersers (previous slide)
  • Addition of 6 off 2000 litre “pans” for mixing
  • Further capacity expansion planned for (5,000 litre pans)
  • Installation of semi automatic piston type filling line
  • Associated infrastructure (generators etc)
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide14

Overview of PCMN personnel development

Number of staff

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide15

Manufacturing multiplier

  • The Local content Law gives clear economic benefit to Nigeria
  • Manufacturing offers significant benefit to national (Macro) AND local (Micro) economy
  • Increased personnel required to operate manufacturing versus distribution
  • Nigerian ownership is critical to the further development of the economy and the multiplier effect coming into place – for every 1 job directly created 10 additional downstream jobs are created
  • PCMN is proud to be at the forefront of Nigerian content development in paint and coatings manufacture
  • We look forward to partnering with NNPC and the oil majors to grow the Nigerian Economy into the powerhouse it should be in Africa.
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide16

In summary

  • Capacity is available
  • Proven in-country capacity should be supported
    • Economic means
    • Enforcement
  • Expanding markets to utilise Nigerian manufacture
    • Regionally
    • Multinational projects
  • Expanding portfolio
    • Linking proven manufacturers to customers
  • Expanding visibility
    • Infrastructure project requirements
    • Earlier involvement
  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria
slide17

Part 1 :A case study of paint manufacture in Nigeria

Eng. S.I.C. Okoli – Protective Coatings Manufacturers Nigeria (PCMN)

  • Measuring local content in manufacturing:
  • A case study of paint manufacture in Nigeria

Part 2 : Measuring local content in manufacturing

Dr. Michael Warner – Local Content Solutions

slide18

Background to metric selection

  • Increasing clarity on metrics and reporting for operators
  • Lack of visibility on requirements – downstream supply chain
  • Metrics should
    • Provide details on Nigerian content
    • Measure of ability to serve the market
      • Goods or services
  • Currently limited to single point activities i.e. supplier assessments
  • Metrics may need to be adjusted to reflect the organisations business
  • Supply chain needs to be proactive
  • Work in progress
  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide19

Key areas of measurement

  • Measures identified to
    • Indicate Nigerian content
    • Identify the suitability of the business to serve the market
  • Currently being finalised prior to initiating monitoring
  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide20

Accuracy of measures

  • Care should be taken when selecting national content measures
  • Metrics may be divided into 3 main types
    • Erroneous – [Insert definition]
    • Proxy – [Insert definition]
    • Accurate – [Insert definition]
  • Some erroneous metrics may provide useful background information into supply chain
  • Should be clearly identified
  • How to measure relationship between licensee and licensor?
  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide21

Sample measures – manufacturing and services

  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide22

Sample measures – manufacturing and services

  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide23

Local content in manufactured paint

  • Assessing using drill down method for national content in each paint material
  • Can be used for domestically manufactured OR imported
  • Can be utilised with local content calculator
  • Limited visibility as it contains proprietary formulations belonging to licensor

Michael – Please can you insert this description I was thinking of the drill down slide from the training?

  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry
slide24

Conclusion

  • Paint industry is an important part of supporting infrastructure development
  • License technology with globally recognised technology provider offers significant benefits
  • Offers potential for rapid start-up and capacity development
  • More work needs to be done on visibility of metrics for supply chain
  • Further guidance on national content metrics
    • Government
    • Operators
  • Choice of metrics is important for correctly identifying national content
  • THANK YOU
  • Measuring local content in manufacturing:
  • Selecting Nigerian content metrics for the paint industry