22 September 2016, Lagos – The Managing Director and Chief Executive Officer, Siemens Limited Nigeria, Mrs. Onyeche Tifase, in this interview with ’FEMI ASU, expresses hope that the downturn in the oil and gas sector will ease soon.
How is the fall in crude oil prices affecting Siemens?
No one is benefitting from the low oil price right now because any revenue my customer earns translates into new projects, new opportunities, new initiatives. And once their revenue stream is impacted negatively, they are going to be more selective about the decisions they are making for the future.
Again, it might even reach a level where they are stopping, not just pausing, their investments in the country and transferring them to other locations. So, the low oil price is not benefitting us. But how does it create an opportunity? It leads to companies becoming very innovative. You have heard of oil and gas service companies that have shut down because there are no more projects; they have turned their facilities into farms.
They have gone into agriculture. What does that mean? They still have this efficient ways of doing business and very good staff, but now they have gone into agriculture. So, that should add value to the agricultural sector.
What we are doing at Siemens is that we are educating not just oil and gas service firms, but also vendors, sub-suppliers, partner firms that sometimes distribute or service our products, on how they can add more value independently. So, they can also continue to survive and expand their business in this tough economic environment.
What is the level of foreign exchange savings to be expected as a result of the €3m facility built by Siemens in Nigeria?
For us to be able to estimate savings or returns for Nigeria from the facility, we will have to tie that to the government’s national plans. During the opening of the facility, our keynote speaker said all the investments we are seeing in the oil and gas sector might come to naught if the sector itself collapses. If that is the case, it automatically means we will be minimising whatever investment we will be making in the future. But I believe personally that the oil and gas sector will rebound; this is just a down period and it will not last forever. I believe by the end of the year, things will start to reverse and we will see a positive trend for Nigeria. And then we will be able to provide clear figures and estimations about what we can do and the kind of impact we can make, not just cost-wise, but let’s start to think local content-wise, human capital development, excellent quality in process, delivery and improving people’s competences. There is a lot of value we can add that isn’t directly related to cost even in the meantime and we are doing that already.
What is your modus operandi for Nigerians getting involved in your operations to develop their capacities?
As a CEO of Siemens, it is something I ask myself everyday: How do facilities such as this or investments or innovations that we are bringing to the market leave a lasting impact on Nigerians? It is a critical success factor for any business today. If you look at the facility, it is well placed; it is in the oil and gas hub of Nigeria.
We are training young students; we are looking at vocational training for non-higher degree certificate holders. This is a module that has worked very well for Siemens in Germany and we are trying to do the same here in Nigeria. From the President Muhammadu Buhari’s and Federal Government’s intentions, I know that aligns very well. There is a lot of focus on capacity development and how that translates into job creation.
So, we start with training people and then how do we ensure that they are employable? We are not training them only on this equipment, but also on the right attitude and skills, and then we are giving them exposure to multinationals like Siemens.
Higher performance could be delegated abroad for international experience as well and then all these come back in-country and if they are turned into staff of Siemens or other organisations, some of them may end up as entrepreneurs or trainers themselves.
Aside from the oil and gas industry, which other sectors stand to benefit from the facility?
This facility will have impact on oil and gas, manufacturing, utilities and infrastructure. Oil and gas sector has always been the foreign exchange earner for Nigeria but that is changing. We are seeing why infrastructure has to be the baseline for enabling further investment in the industry and that is even more critical.
And for infrastructure, you need power and intelligent solutions which we can service here. When it comes to utility, you are looking at not just gas turbines, but also transformers, switch gears, high-voltage equipment, automation equipment, smart metering solutions; those are all things we plan to service here in future. We also look at being able to service motors in a very short period from now; we already have that equipment delivered, sitting outside our facility and very soon that equipment will be installed in this facility and we will start servicing motors. So, anything rotating or being driven in a factory, you are using motors or drive systems. We have already made the necessary investment to service equipment in those areas.
Why are we talking about service? If you invest in a new build; if you spend billions of naira or dollars investing in a new plant or equipment and you have no way to service, you are basically replicating what has been the normal modus operandi for Nigeria. You see discarded facilities and obsolete equipment all over the nation and it is because of a lack of service mentality or culture.
So it is very key and even more important for me that we invest in establishing service facilities like this before expending precious funds on infrastructure, manufacturing or utility systems that will not work for their lifecycle. When you have a service workshop like this, it can service equipment from all over the nation.