Tuesday, February 25, 2020

Resources and Logistics Group Drives Commercial Truck Production in Nigeria

Africa's Wealthiest Resident Buoys Up Flagging Industry
Shipping News Feature

NIGERIA – As the undisputed richest man in Africa Aliko Dangote has a finger in many pies, from the cement business he helped transform, to foodstuffs and logistics, and is somewhat obsessive about enriching his country rather than passing wealth abroad. Now his Dangote group is hailed as saving the production plant of Anambra Motor Manufacturing Company (ANAMMCO), Enugu with a string of orders for home built trucks to support his many business ventures.

The auto manufacturing plant commenced life as a vehicle assembly facility commissioned in 1980 by the Federal Government in partnership with Mercedes Benz. The plant then fell on hard times as orders collapsed and it shut down for seven years. A lifeline came when Dangote began to realise his plan for a huge refinery after deciding that the export of Nigeria’s crude oil was not the most profitable way to deal with such a commodity.

In 2016 plans for the refinery changed and construction began on a 2,500 hectare site in the State of Lagos on the Lekki Free Zone. Production it is estimated can reach refinement of 650,000 barrels of crude oil daily and the project is likely to be ready by 2022. The oil, carried from the contentious Niger Delta oilfields along with natural gas to supply electricity, will travel via pipeline.

To manage this construction Dangote needed trucks, thus the deal with ANAMMCO which has now seen the group purchase 3,500 of the locally assembled Shacman trucks in the years since Dangote signed an agreement with Transit Support Services (TSS), a subsidiary of ABC Transport PLC. This has meant that 90% of the truck production has gone to just one buyer. Chairman of TSS, Mr. Frank Nneji said if not for Dangote’s magnanimity and his commitment to empower local manufacturers, the ANAMMCO plant would have remained perpetually moribund, adding:

”For more than seven years this plant was shut down. There was no activity here until we made an agreement with Shacman group and started skeletally. But we were only to start full step production when we offered the logistics solutions to Dangote and the production facility of ANAMMCO way back in 2016. That was the time we signed agreement for the first 500 units of trucks.”

It was the Nigerian Automotive Industry Development Plan (NAIDP), commonly called the auto policy which prompted a revival. Finished commercial vehicles attracted a 35% import duty tariff whilst ‘knocked down’ parts were free of duty or attracting a maximum of just 10%, meaning assembly was again a more attractive option. Frank Nneji continued:

“What we are saying in ANAMMCO coming back is actually as a result of this auto policy. This is one of the benefits. And the second thing is the benefit of Dangote’s patronage in identifying a plant that has capacity in the south-east, in Enugu to give us the opportunity to produce trucks locally instead of importing them. What this initial capacity surge did was to ensure that all the staff of ANAMMCO who had been at home had to come back to work. Some local suppliers, lubricants, electrolytes and the rest of them also had to come back to doing business.

”And it goes even further than that because we are in Enugu, we used the Onne Ports to bring in these goods. You know many people are complaining that Onne Port is moribund, no good is coming. Of course we directed all the containers here and from 2016 up till now courtesy of Dangote, the Onne Port has handled more than 3000 containers coming to this place.

“So you see how we can spur capacity by utilising our local capacity that is available and this is courtesy of Dangote and the patronage and each time we had approached Dangote, we said, ‘look if you are going to do this number of trucks, it is important that the Shacman apart from its quality, we are also representing a firm that has production capacity in the South East in the stake of ANAMMCO.’ That is how Dangote is keeping the South East automobile sector working.

“According to the National Automotive Policy, Enugu and Nnewi has been designated as the automotive centre for the South East in this axis. This is because of the stay of ANAMMCO over a period. They have acquired a lot of technical capacity. There is also a training school that produces technicians, training young school leavers here. So this is what we are doing here. This place is busy producing quality trucks with Dangote as the largest single patron.

According to Mr Sunday Esan, General Manager, Media, Dangote Group, the company is satisfied with the quality of the trucks produced and felt that once the refinery came on stream the orders for trucks would continue.

There is however a shadow currently hanging over the production of the Shacman trucks. Much of the finance at the ANAMMCO plant stems from China (state owned Dongfeng has a major investment there). The Corvid-19 virus has caused work to stop and only resume on the 14th February as the workforce had to be trained in preventative measures.