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Ghana Report
Marcopolis presents the Ghana Report focused on investments, doing business, economy and other topics featuring interviews with key executives and government officials. The sectors under review are agriculture, banking, energy, industry, telecom, IT, real estate and more.
InterviewsApril 09, 2018
Rabotec Ghana: A Local Specialist in Mining Services, Engineering and Construction
Ali Ibrahim, CEO and Managing Director at Rabotec Ghana Limited
- Written by Sandra Francisco
- Published: April 09, 2018
Interview with Ali Ibrahim, CEO and Managing Director at Rabotec Ghana Limited
Can you give us an overview of your sector and the current trends?
We are now focusing on the infrastructure development industry. When dealing with engineering, construction, and mining, the infrastructure is what makes those sectors work. This is especially true with our mineral resources in this part of the country that are giving a boost into the infrastructure industry, and in turn, the engineering and construction industry. Everything that comes in to extract the mineral resources that we have is true engineering, construction, and production. The sector is doing well because we have a lot of new companies and new investors coming in to explore our mineral resources here in Ghana.
What kind of minerals does Ghana have?
We need investors to come in and help us, especially investors who are in the world of partnership and the world of lending and financial investment. We need them to support us and to boost up our way of doing business.
At first, we had mainly gold. Now we have bauxite and manganese. The diamond industry went down somewhat, but now it is coming back up because we have had investors and a diamond mining company enter into the eastern region. The bauxite industry used to be only one company, but now we have three or four different construction sites that have been identified. In some places, exploration has already started, and development will soon follow. Oil and gas has been coming in as well for the last few years. Every day, new sections and blocks are coming up. In the Volta region in Togo, there have been areas identified for drilling already. All of this comes under infrastructure development. The industry itself now is seeing a boost in business opportunities. We need to take the opportunities and the resources to get the infrastructure required in order to make all of these aspects work.
In your sector, there are different suppliers and competition. The sector is booming, but that means that the people involved in working in the sector are also growing. What is your perception of the growing competition in the sector in the sub region, as well as in Ghana?
The competition in the area is growing quite fast. I have worked with some colleagues before that are forced to set up businesses like ours and are now out there exploring the market. This means we now have Ghanaian entrepreneurs taking advantage of the current mineral resource market booming in Ghana to set up businesses that can also render services to the mining companies like we do. The competition is becoming very keen both with local content and in the international market.
What is the growth or the trends here in the region itself? Is it not only Ghana that is growing, but direct to the region?
This was true, at first. In the past, when we started projects in Mali, Côte d’Ivoire, Burkina Faso, Sierra Leone, and Liberia, we had to send employees from Ghana to these branches. But now, those areas have also developed to the standard that sometimes we only need to take a few people from here, mainly the key people that we need to support our teams over there, such as the project manager, senior supervisor, etc. The workforce in the region is really developing. In the francophone countries where we previously had a lack of professionals in the industry, now, we are seeing such a standard that we have to import some of them into other countries, such as moving people from Burkina that we have trained to meet our standards and bringing them to Sierra Leone or Liberia. The industry itself and the region’s infrastructure development has really been impacted. Now, we have so many qualified and skilled artisans in the region. It is one of the best achievements in this developmental time that we are going through. In the past, many of the expatriate companies would bring in Filipinos, Indians, Chinese, or Australians to Ghana because we did not have the requisite skilled personnel in the region. At the time, Ghana was still at a higher level compared to other west African countries. The advantage for us when you get projects like that is that it was easy to move people from Ghana to the neighboring regions. Now, even we Ghanaians are not looking outside our country for personnel, and neither are the expat companies. In every country you go to, you can find at least 80% of the skilled artisans needed to meet your expectations in your business.
What are your competitive advantages and what do you bring to the market? Why should a foreign company coming to do mining or construction here partner with you?
Partnering with Rabotec has a number of advantages. We do not partner to give you just the workers, but we make sure that as a foreign entity coming in to work here, we can assist you in going through all the requirements of the country and institutions that are present where you will operate. For example, in the gold mining industry, there is the Mineral Commission and the Environmental Protection Agency. These two bodies work hand in hand, but you have to meet regulatory requirements for both agencies. That is where we come in. We make sure that you go through all the requirements and do not do something that would force you to stop the project midway. We are always updated with the industry requirements. In terms of the labor force or the work force that we can use to support you in country, we have skilled and trained people, irrespective of where we are employing them from. We train our people to meet the international standards from anywhere in the world and ensure that we know each country’s requirements. We have research engineers who investigate every country and their way of working. We go through the international standards and make sure we understand the culture or the working attitude of any client that is coming to us. When we are approached, even before we set a deal, we make sure that our research team has done background checks on how activities in such places are done. By the time the client gets here, and we conclude a deal, or we seal a partnership, we already have some information about how the client’s people operate and work in their country. We try to meet the client halfway, in a way that also corresponds to our rules and regulations in this country. For example, clients from some countries expect you to work ten hours a day, as they must per their construction schedule. Based on that, we renegotiate with our people and tell them after our normal eight hours that we are regulated to work here, there are two hours extra overtime. We are able to satisfy the client’s ten-hour requirement for the job. At the end of the day we will not say that because our laws say eight hours, we are going to hinder you your ten hours. We prepare our workers for the fact that this job will be for ten hours a day. After five hours, we go to lunch, in the last three or four hours before closing we have a brief break, and then continue for two hours. Everyone is happy.
Can you give key examples of projects you have worked on?
We are currently working on a project in the mining construction industry. We partnered with a South African company to come in to build the entire mine from scratch to commission to hand over to the client. Meeting the requirements, the timetable, and the budget as planned is one of the best challenges that we were able to overcome and succeed at.
What was challenging and what did you do to overcome that challenge?
The challenge dealt with the fact that we had a company coming from South Africa with their own way of working and their own work ethics, bringing supervisors who have their own way of doing things, and bringing them here to come and meet the local team. Conversely, we had our local team here coming in to work with a foreign team in a full-time partnership, where the control was about 50/50 from both sides. Each partner wanted to do things their own way. Having a supervisor who wants you to go one way and artisans who feel another way became a very big challenge that was difficult to balance. We are all on a neutral ground. At the end of the day, our achievement is what the client gets from us. In the project manager’s daily report, it says this supervisor came in saying that he wanted the artisans to do things one way, but the artisans asked to do it a different way. It is like getting married to a stranger or to a woman and she comes with her own training from where she is coming from and the guy coming from your home has his own training. In her home it is like this, and in his home it is like that, and they have to blend together to make it work.
How big was the project? What was the name of the South African company?
Redis Construction Afrika is the company we worked with and we still have a very good relationship with them. They have also learned a lot about the Ghanaian way of doing things. Previously, they had been working in South Africa and the Southern part of the continent and coming to the western region to learn our way of working. Per their requirement, they used to bring in people from India or the Philippines to come and work on their projects. Even on this project they asked me to bring in those foreign workers that they were used to using, and I said no. The name of this project was the Asanko Gold Project. I said no because we have every artisan, every supervisor, every project support team, health and safety officials, quality control officials, material controllers, and all the people we need for this job. They also are partners on the job, so they bring their expertise from the office. Per our relationship and our partnership, no foreign artisan is being brought to this country. We have from the lowest artisan, TA trade assistant, or general hand who is a laborer without a skill that has not even been to the field before, up to the best of every artisan, the best welder, the best rigger, the best boiler maker, the best mechanic, the best of every position that is required to complete this job. People were unsure if we would be able to pull this off. I said, we could make it happen and we could do it. The project was completed on schedule which is always the client’s goal. Equipment commissioned was on schedule. All the challenges were met. The cost of this project started at almost 45 million dollars. As we continued, other jobs were coming in and out, but all these extra jobs that came in onto this project were also met at the same required time as was scheduled for us from the first day of the project. The project was a win for everyone. Of course, we ran into engineering issues and a few communication lapses, but these were minimal. Some workers misbehaved a bit. They say that if you do not give them what they want they will not work. They want to see my presence. If they do not see me, they notice that the director used to be on the field with them but now he is absent. If there is an issue, they want to see me, so I have to decide what the problem is.
You are facing a very complex situation in this country. The banking rates are extremely high. The Central Bank already starts with a very high rate of 21 percent and can go up to 28 percent or even higher. Would you be interested in attracting investors to join you, if not directly, in terms of shares or planning, etc.? What is your strategy towards investors?
One of our main challenges is equipment materials for our jobs. Sometimes, the interest rate in our banks and the interest rate for lending are on the higher side. If you go to such facilities, you end up not able to meet the cost of the project that you have tendered for because it is an open market deal and it is a competitive market. If you think you have submitted your best, lowest rate, someone else has almost given the job for free to the client. If you happen to win that contract and you do not have the requisite materials or funds, or you need additional equipment or materials, you must go to a facility to purchase them. This can sometimes be more than the cost of what you have tendered for. So already, if we accept that facility, we are running at a loss on the project before we have even executed it. This does not even take into account salaries or anything else, just the support of the financial assistance you receive to boost up your equipment or your infrastructure development. Just getting what you need to complete the job has now taken over the cost of the project. From then on, you have that debt hanging on your neck. I know many companies who have the equipment that they spent money on that they then lose to the owners or to the banks because the company might finish the project, and not able to pay back the loan they took out. It can even affect the salaries of your workforce. Some of the banks will go into agreement with you and your client. When you go into such a facility, they ask you what the contract is and what you have for collateral and security. They use the contract to prepare a loan for you and they go to the client. They accept a joint agreement and make all payment of this project through the bank. If you take that deal, now all payments go to the bank. As you continue, the equipment you have on site might break down and then you have to fix that too and need extra money. At the end of the month you pay your workers. You are buying materials. The materials, if you go to the material supplier and you do not have the cash to make that purchase, you must get a loan with interest. You are executing the job, but at the end of the day, you end up with nothing. We need investors to come in and help us, especially investors who are in the world of partnership and the world of lending and financial investment. We need them to support us and to boost up our way of doing business. Equipment and machinery are only the tools we need to work. I am also interested in finding investors who will bring out of class technology. We are interested in the engineer sitting down and learning how to build a skyscraper. We want to improve on our human resource base here. From investors, we need the equipment, materials and all those things, but we need people who can come and help us develop our people too. If we can improve upon them, then we can go head to head with an engineer coming from America. We can go to the investors and get all the certificates and the training. Then, when someone comes from America with this new technology, our people will be able to have the opportunity to work with such a person and improve.
Project yourself into the medium term, three years’ time. What will Rabotec be if everything goes according to plan? What will you have achieved, not only in Ghana, but also regionally?
My dream for Rabotec in the next few years is to be able to match the big international companies locally in Ghana. When a foreign business comes in, they should not bring in foreign workers to supplement the local content, rather, it should be 100% local content business. Investors can come from anywhere, but in terms of infrastructure development, services, or anything else that is needed, we want to see Rabotec as a full player. We are not looking at competing with the companies that give us business, but to be able to build a complete turnkey project for a client like an American, European or Asian construction company who will come to us where we can have a complete sit down with the client, sign a deal, finish it, and hand over a key to that client. Local content sourced locally in Ghana and locally in the region. Currently, we place advertisements that we want to recruit supervisors from America to come here and work for us to train our people to develop our human resource base. We can get all this equipment and everything else, but if we do not have the right human resource base locally to run it, we still end up either underutilizing those things or we will destroy them. My aim is developing the local people, the local artisan, the local engineers, the local service providers. That way, we will be self-sufficient, and every box provided by the client we can tick off. Sometimes we might want a specific person with specific experience and we do not have it. That is another technology we are lacking in and that box cannot be ticked. My conclusion on this whole idea is that Ghanaians are capable of doing it. We have done it before, we are doing it now, and we will continue to do it. Asian, American, Australian companies see Ghanaians and are surprised at how we have gotten to this level. I stand on behalf of all of Ghana, no matter which industry the person is coming from, whoever invests and wants to come to Ghana, tell him that the CEO of Rabotec assures you that Ghanaians can do it locally for you and to your expectations.
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