General Electric’s Expansion Drive into Nigeria

29 Jan 2013

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Vice Chairman/CEO, General Electric, Mr. John Rice 

With the opening of General Electric’s service shop in Calabar, Cross River State, this could localise the company’s operations in Nigeria and deepen its long-term commitment to the country, Ejiofor Alike writes
The on-going transformation in Nigeria’s power sector got a boost recently when the General Electric (GE) of the United States established a service shop in Calabar as part of its commitment to localise its operations in Nigeria.

Being among the company’s top 10 in Africa, Nigeria is no doubt strategic to GE in its efforts to strengthen its position as a global leader in the power sector. However, despite Nigeria’s strategic position in the company’s global business, most of the decisions affecting its Nigerian operations are taken in the company’s offices in South Africa and Atlanta, Georgia in the United States.

Despite the large number of turbines supplied by the company to Nigerian’s power sector, especially the National Integrated Power Project (NIPP), the company has no maintenance factory for turbines in Nigeria. On several occasions, these turbines were shipped outside the country for repairs, with its attendant cost and capital flight.

This has also no doubt led to delay in business decisions that affect Nigeria, with its implications on project delivery. Under the privatisation programme of the Federal Government, the company was also not known to have played a major role that was commensurate with its position as a global leader in the power sector.
Specifically, GE was not known to have shown interest in the assets of the Power Holding Company of Nigeria (PHCN) that were privatised under the power reform programme. This was blamed on the absence of a regional office in Nigeria that is equipped to take strategic business decisions for the company.

The opening of the service shop is the first step towards increasing its presence in Nigeria, as it will create employment opportunities and improve skills transfer and development especially artisan and engineering skills.

As the global giant continues to increase its investments in Nigeria, the service shop will open doors to the launch of similar projects across Nigeria.

Speaking on the company’s commitment in Africa, the President and Chief Executive Officer (CEO), GE West, East & Central Africa and Africa commercial leader, Dr. Lazarus Angbazo, acknowledged that the company was just beginning in the continent.

“Anyone who has been to Africa knows that there is great potential in the region. We are witnessing the beginning of a huge transformation in several African countries and GE is already a positive catalyst for sustained development in many of these markets. We will continue the effort by investing the right resources in the region, to enable us to deliver for our customers and for the company,” he said.
Commenting on GE’s increasing focus on Africa, the Vice President and Chief Diversity Officer, Deborah Elam said the company had opened the door to the continent of Africa with the creation of the Global Growth and Operations (GGO).
GGO was created in 2010 to boost GE’s growth in the regions outside of the United States.

“Putting a well-respected and highly seasoned GE corporate officer on the ground and surrounding him with a top-notch team of leaders all at the senior executive level is a significant statement. When GE appoints big players to key positions that sends a signal to our stakeholders and to the rest of the world that we are serious.

In addition, the pride that the African American Forum (AAF) in the United States feels in terms of what is happening in Africa is infectious. Given that this conversation started several years ago, AAF members feel so good that progress is being made not only in terms of GE’s philanthropic engagement but also in terms of real commercial opportunity on the continent,” Elam said.

The West Africa Sales Manager for GE Energy, Elisée Sezan, also echoed similar sentiments.

“We have to make sure that we hire the best talent in Africa and that we are willing to compensate them in the way that makes sense and works for the region. Then, we have to figure out the best way to accelerate their development so that we can take advantage of the opportunities we have there. We may not have 10 people ready to be officers in Africa today but GE do have the resources and the capabilities to grow leaders,” she said.

Indeed, Thulisile Phirihad in “Renewing GE: The African Project” noted that many of GE’s African employees were also excited about the new developments in the continent, adding that “in general, employees commented that the appointment of Angbazo to GE Africa’s commercial growth leader made them feel not only that the voices of GE’s African employees would continue to be heard, but that if they worked hard, they, too, could be successful at GE”.

GE has a record of over 100 years of working in Africa as a provider of localised global infrastructure technologies, services and solutions.
Nigerian Operations
Nigeria has broad needs that are critical for the country’s sustainable growth such as an improved infrastructure and access to world class technological solutions in key sectors- energy, healthcare and rail transportation.

These needs can be partially and in some instances fully met by GE.
The company’s operations in Nigeria span more than 40 years, with over 100 customers in both the public and private sectors. The company’s portfolio of technology solutions is well aligned with Nigeria’s infrastructure needs, and is contributing to economic development and an improved quality of life for Nigerians.

Today, the company’s electrocardiogram and ultrasound healthcare equipment helps Nigerian doctors with early detection, health maintenance and preventative measures.

The company’s rail locomotives use advanced monitoring technology to move passengers and freight across Nigeria, reducing road and port traffic.
GE’s superior oil and gas compressors and energy power turbines are helping to boost Nigeria’s oil and power-generating capacities.

The company’s diverse technologies are well positioned to help Nigeria become a top 20 economy by 2020.

In 2009, the company signed a landmark country-to-company agreement with the Federal Government aimed at forging a strategic partnership that will see the two parties working together on high growth opportunities and investments in support of vision 2020.

As part of the country to company agreement, GE and the Federal Government signed three Memorandum of Understanding (MoU) agreements for the energy, healthcare and rail transportation sectors respectively.

These outline in more specific detail how GE will partner with the Federal Government and other key stakeholders to deliver government’s priorities in these sectors in line with Vision 2020.
GE’s Commitment
The company has expressed its commitment to supporting the sustainable development of Nigeria with advanced infrastructure technologies, services and solutions.

Speaking with THISDAY in a recent interview, the Vice Chairman of GE, who is the global Chief Executive Officer of the company, Mr. John Rice noted that Nigeria was among the top 10 countries where his company was experiencing growth in the emerging economies, with investments in energy, oil and gas, and a number of other businesses.

He said with the smooth transition from the late President Musa Yar’Adua’s administration to the Jonathan’ administration, coupled with the abundant natural resources and a large population, Nigeria has all the ingredients for a company like the GE to make long term commitment.

“It is no longer about commercial transaction. It is more about establishing direct relations; making the right long-term commitments, pooling resources; creating jobs and localising capability, so that we are an important part of the economy in the provision of infrastructure technology and services. For us, Nigeria has always been important and also continues to be a major focus,” Rice said.

On concern by its Nigerian customers that it takes a very long time for the company to deliver turbines, resulting in price escalation, Rice said the escalation in the company’s contracts was tied to the price of raw materials.

He also said the number of old orders could delay the delivery of new orders.
“Technically, we take at least 12 months to actually build the gas turbine for our clients. But there may be other customer orders that we already have and that could push the delivery time a little bit further. Then, we always have escalation in contracts tied to a basket of raw materials. If the price of raw materials goes up, then the price can go up. If it goes down, then the price can go down. So, we don’t just pass through only the increases; we also pass through any decreases. So, it is possible for there to be a price decrease too,” he added.

There is no doubt that the company is continuously increasing its footprint while investing in local talent and giving back to the communities it operates in.
It established a welding shed for customer consignments and sent welders for training on specialty connectors and pipes, delivering on Nigerian Content Act that requires welding to be performed exclusively in-country.

Together with the Power Holding Company of Nigeria (PHCN), GE supplied four gas turbines to Olorunsogo Power Station (formerly Papalanto) in Ogun State.
The company also supplied 25 diesel locomotives to the Nigerian Railway Corporation and played a pivotal role in training and transferring skills to their employees.

In recognising the importance of a skilled healthcare workforce, GE has provided expertise and equipment that combats dreaded diseases to Lagos State University Teaching Hospital.

As a trusted and strategic partner to the Federal Government, GE’s commitment to grow in Nigeria with Nigeria is demonstrated by its holistic approach to investing in the country.

Tags: Business, Nigeria, Featured, General Electric

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