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Nigeria lacks adequate electricity meter manufacturers – Latilo

Latilo

Latilo

Taiwo Latilo is the Chief Executive Officer of Metering Solution Manufacturing Services Limited, one of the few meter manufacturers in Nigeria. In this interview with STANLEY OPARA, he spoke on the metering challenges facing electricity consumers in Nigeria and the huge market it presents for power distribution companies

Considering the high capital requirement of this business, have you considered the market opportunities open to you?

In Nigeria we gave 11 electricity distribution companies and all the Discos are potential customers. Right now we have a serious metering challenge in the country. About 10 million meters are needed to adequately meter the nation and bring normalcy to the power distribution problem in the country. The shortfall is very huge and the need to address the problem cannot be overemphasised.

To worsen the situation, we don’t have adequate meter-manufacturing companies in Nigeria because of the various challenges the business is faced with. But that is why we are in business now as we only see the huge market and massive opportunity it presents.

Aside of producing meters, there are other meter-related items we will be doing in the nearest future; for example, the meter boxes into which the meters are coupled and many other products usable in this industry.

What is your current production capacity?

Per annum, we do one million units and a minimum of 500 staff members are instrumental to realising this feat. By and large, our activity is having a multiple effect on other related industries such as the telecommunications industry and the like.

Our goal is to produce single phase and three phase electricity meters in various configurations and mountings – light weight, slim skeletal, compact meters for pole top installation, prepayment type meters, split type electricity meters, standard one unit electricity meters, bulk electricity meters, maximum demand meters and smart electricity meters.

MSMSL iss designed as a high technology hub for production, testing and servicing of electricity meters and allied products, and has room for expansion in a modular fashion for additional production lines to develop and assemble various models of electricity meters and accessories.

Why the choice of Akwa Ibom as your headquarters?

The governor and government of Akwa Ibom have created conducive environment for businesses to thrive and operate. There is huge human capital concentration in the clime coupled with people with genuine desire to work and contribute meaningfully to the state’s economy. The huge land mass here is also an incentive. The plant is sited in Akwa Ibom because of its strategic location in the Gulf of Guinea.

As regards your manpower mix, what is the ratio of expatriates to Nigerians?

We are committed to building indigenous capacities and to creating jobs for our people. Currently, we have 99 per cent Nigerian participation and just one per cent of expatriates. We are very conscious about this.

About 95 per cent of our local staff members are from Akwa Ibom while others are from other parts of Nigeria. We remain committed to creating high tech, non-oil related employment thereby making a strong contribution to economic uplift of the region.

What are the major challenges your company is faced with, given the peculiar nature of the Nigerian market?

The challenges are there and at the moment, it is mainly skewed heavily towards the country’s macro-economic situation. This brings to the fore the issue of foreign exchange. Though the exchange rate of the naira to the dollar is seeing some improvement, it is still not easy to get forex in the right quantum and price.

Also, when our major customers – the Discos – are being short-changed by the electricity consumers via meter bypassing, it defeats the purpose for which we are in business since the meters we produce are prepaid meters.

We are not relenting as we are committed to helping electricity distribution companies to check theft, non-payment, unreliable billing, consumer resistance, loss of revenue, and also ensure availability of Nigeria-based products which are of high quality and accessible to customer.

Who are your foreign partners?

We have technical partners from China, Pakistan and India. The truth is that we need to be in partnership with big manufacturers of electricity meters in the globe since we cannot manufacture all the meter components locally now. But this is not expected to continue in the long run because we are looking at 100 per cent local content very soon. Really, in the next four to five years, our target is to move to 100 per cent local content. Immediately we get to the level where we are good to go, we will do it.

A lot of Discos prefer wholly-imported meters to the ones manufactured in Nigeria. Is this affecting your company in any way and what are you doing to change the tide?

One of our core values is customer satisfaction. To this end, we ensure we manufacture quality products. We know the Federal Government is doing its best to discourage Discos from importing manufactured meters, and that is why we set up our meter manufacturing company here in the country.

Apart from that, we have our own captive market. Of course, one cannot come into this sort of business without having a captive market. We have some Discos we have already got orders from with respect to meter supply.

Recently, the Federal Government said it wants to roll out 10 million meters; that is a good market for us as it will be given to local manufacturers, and not importers. Already, we have Port Harcourt Disco and Benin Disco as our customers. We are currently engaging Jos disco. In fact, we are in serious talks with five Discos at the moment. Ikeja and Eko Electricity Distribution Companies are part of our targets.

For us, it not about providing just meters; it is more about being a solution provider. In the bid to continue to maintain our position in the market, we are taking our service provision to another level. This will be made public in due course.

What is the value of the MSMSL in naira or dollar terms?

What I can say now is that this is a multimillion dollar business investment.

In your projections, where do you see the company in the next two years?

The truth is that we have a supply target to meet in the next one to two years. As it is now, in the next one to two years, we have a lot of work in our hands and might not be in a hurry to get additional Discos; and coupled with the fact that we are expanding to other areas and product lines.

In the next 10 years, metering business will still be thriving in Nigeria owing to the fact that even if everybody gets metered, there will still be cases of maintenance and replacements.

As a manufacturer, what do you think government should do to encourage local manufacturing?

In our case, the government should ensure discouragement of meter importation and encourage the manufacture of the same locally by creating the enabling business environment.

Government should also create a level playing field for all meter manufacturers in the country, thus avoiding favouritism or preferential treatments. The government also needs to introduce incentives for businesses in the form of tax holiday and the like. Avenues for funding should also be opened to local manufacturers.

Do you see local meter manufacturers meeting the demands of all Discos in terms of metering needs of Nigerians?

Given the current metering deficit in the country and the number of meter manufacturer operating in the country, it may be hard to say that the current demand for meters can be met. But for players like us, we remain committed to adequately addressing the metering needs of the clients under us. For example, we know what the Port Harcourt disco needs in terms of metering its customers, and it is something we can address. But it is possible that some local meter manufacturers cannot meet the requirements of their clients. This could be for some reasons. For instance, the current issue with had with forex affected a lot of things in the meter value chain. Some of the manufacturers were not able to access forex and could not deliver on their mandates. This is just one of the cases manufacturers are faced with. But as it is now, things are changing and the macro-economic situation of the country is improving. There are more dollars in the system now compared to the situation some months ago. Things are indeed getting better and hope is returning back.

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