Measuring Local Content In Manufacturing Case Study Of Paint Manufacture In Nigeria

Topics: Manufacturing, Nigeria, Mass production Pages: 24 (1509 words) Published: June 9, 2015
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)

Part 1 :A case study of paint manufacture in Nigeria
Eng. S.I.C. Okoli – Protective Coatings Manufacturers Nigeria (PCMN)
Part 2 : Measuring local content in manufacturing
Dr. Michael Warner – Local Content Solutions

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

Overview
Part 1 – Case History of establishing paint manufacturing in Nigeria Paint manufacturing development in Nigeria
Local content requirements for paint manufacture
Using license technology
Capacity development in relation to market
Multiplier effects of supporting manufacturing
Part 2 – Selecting Nigerian content metrics for the paint industry What metrics to measure Nigerian content?
• General
• Specific to paint manufacture
Conclusion

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

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

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

2014

Overview of PCMN personnel development
250

Number of staff

200

150

Nigerian
Ex-Pat

100

Manufacturing commences
50

0
2001.0 2002.0 2003.0 2004.0 2005.0 2006.0 2007.0 2008.0 2009.0 2010.0 2011.0 2012.0 2013.0 2015.0

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

Overview of PCMN capacity development
New factory proposed
2015

800000

Import / production levels
(litres per annum)

700000
600000
500000
400000

Imported products
Nigerian Manufacture

300000
200000

Capital expansion Phase II
increases capacity

100000
0

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

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

Local content levels in paint manufacturing
14

Million litres per annum

12
10

M
PC

N

o
Pr

ct
je

ed

c
pa
a
c

Nigerian heavy duty
protective coatings
market estimate

ity

8

Local content
requirment
Column1

6
4
2
0

2012.0

2013.0

2014.0

2015.0

Measuring local content in manufacturing:

A case study of paint manufacture in Nigeria

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

Advantages of license technology
Licensee
Access to world class products
Reduced product development costs
Quick establishment of...
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