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Nigeria Report

Marcopolis presents Nigeria Report focused on topics such as investments, power and hospitality, featuring interviews with Nigeria's leaders. The sectors under review in this issue are banking, construction, energy, industry, logistics, real estate, tourism and many more. 

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InterviewsJuly 26, 2016

Exclusive Interview with Mikano International, the Leading Manufacturer of Generators in Nigeria

Mofid Karameh, CEO of Mikano International
Mofid Karameh, CEO of Mikano International
Written by Dominika Bzduchova
Published: July 26, 2016

Interview with Mofid Karameh, CEO of Mikano International

Tell us about Nigeria and its status in 2016.

Nigeria is like any other developing country. They have a power problem. Like any other developing African country. The power supply cannot cope with their requirements or with their needs due to the new developments. In the last ten years the industry has developed so quickly and to the level where power cannot keep up with development. That is why we have this shortage of power. With the privatization of the power sector and with the new investments coming in things are definitely improving. I believe it will continue to improve and in the next three to four years we should see an increase of around 40% in our supply and most of the problems will be resolved. Of course it won’t be completely resolved and we will still have a power supply shortage. Where we will find power now will be from the many private power stations being installed as so many in the private sector are investing in the power sector and there are many stations going up in various states. We believe that in four years’ time we will have a better supply. The demand will also be greater but with a better supply of power we should be fine 80% of the time.

What’s the history of Mikano International and what is its current position in the market?

Mikano started in 1991. We established our company as an importer of generators and the servicing and maintenance of generators. Three years later we were the first company to start bringing the technology of generator assembly into Nigeria. We were the first company in 1995 to start assembling generators. We had so much support from the government that we developed the business further until it became a trend in Nigeria and nobody could afford to bring in a complete generator from overseas anymore. All the companies started doing as we did and they followed us in the assembling of generators. Today Mikano has around 2,500 employees in various different sectors - steel production, manufacturing of panels, assembling of the generators, manufacturing of silencers, manufacturing of sound proofing and we have the servicing and over hauling of the generators in the maintenance sector. We try to cover as much as we can. The next step for us is to go into power supply. We are thinking of building a big power station. There are many different power needs in the country from big development companies, industrial projects to banks. We will supply power to them directly and would not sell generators to them anymore. These are the new steps for the business. Not to supply machines but to supply power. What do customers want? They want power. They do not want to buy equipment. They want to take the headache out of power supply. With the gas supply that has come into Lagos in the last six or seven years it has made operations easier for us due to the availability and quality of the gas and due to the low cost of running the equipment. Today we have power supply by gas and the cost of that is 50% of what diesel costs. That is why the return on investment is so high.  We are in the sector now to start supplying power and not machines. We are reducing our generator supply and we will be stepping into direct power supply.

As a leading company in our sector we definitely have a responsibility to repay the public’s support. Our best donation is our involvement in schools and universities.

Could you summarize the requirements of Mikano and how you differentiate from other companies in your industry?

We were the first company established in Nigeria in the assembly sector. We have everything in-house. That is a very big advantage for us. We are recognised by the government and many companies. We produce most of the equipment ourselves locally and we only import engine rigs and alternators. We are proud of that because of the good quality work we are producing as well as the efficiency of the end product.

You recently opened an office in South Africa. Could you tell us more about your expansion? What’s the next step?

The plan is for Mikano to expand to many different countries. We established an office in South Africa to cover the needs there. We also cover around Nigeria, Chad, Cameroon, Ghana and the Benin republic. We have many customers there and we will be opening offices in all of those countries. Due to the growing development of the country they need a greater supply of power and the government is unable to keep up with demand.

In what way did the latest budget approval affect your sector?

The budget this year was not as we had expected it to be. We had expected it to be much more devoted to the power sector. Less than 200 billion Naira was allocated and that translates too approximately 100 billion US dollars. I believe it should be much more as the country is developing so rapidly. The low budget affects us negatively because we are expecting to be needed more due to the country needing more equipment and power supply. The government is relying on private sector to do more of the power supply.

What is your contribution to society? We know you do some CSR work and as well as donations. Could you mention a few?

As a leading company in our sector we definitely have a responsibility to repay the public’s support. Our best donation is our involvement in schools and universities. We train students and we supply equipment to universities to specially train students in the mechanical engineering units. We have the traffic stands which we deliver all over Nigeria. The traffic stands help with traffic and it shelters the police officer from rain while they work. Some of the best things we have done are the police stands and we will continue to maintain and service them as well as replacing them if they are damaged for at least fifteen years. It takes a lot of finance and time from us to maintain the stands for that length of time.

On a more personal note, we would like to hear about your journey in Nigeria. What is the secret of your success? What has contributed to your development of this company?

I have been in Nigeria for over twenty-five years and I have been Nigerian for ten years. I take Nigeria as my second home. All of my investments are here. Nigeria is a country you have to believe in and invest in it and when you invest you will receive a good return. The secret of Mikano's success is because we we're the first. We we're the first to believe in Nigeria’s economy, in Nigeria’s human resources and Nigeria’s market. That’s why I invested in the assembly sector. It was a huge investment and we had resistance from many sectors, especially traders. But we believed in it and when you bring in a good product that has an affordable price and you are brining employment into the country it will give you the best returns. The secret to our success is to do a good job, develop a good product and believe in the country that we live in.

Nigeria today like any other country but especially like any other oil country such as Brazil. It suffers financial difficulties and scarcity due to the oil price. I believe this problem will be resolved soon. We are facing it in every sector and I believe it will make us stronger because if it doesn’t break your back it will make you stronger. I believe in Nigeria’s economy and in its leaders. They are taking us in the right direction. We may have difficulties but they will soon pass.

 

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