Vanguard (Lagos)

1 June 2009

Nigeria: MTI to Set Up Transformer Plant in Abuja

After about one year of going public, the management of one of Nigeria's frontline telecom Infrastructure building and management firms, MTI Plc, last week in Lagos gathered its investors to explain how it has been able to use their funds to create more profitable platforms.

With heads high, the team of MTI management led by its Chairman Prince Chibudom Nwuche and his Vice, Mr Frank Kirkitie, rolled out a long list of achievements within the period under review and explained to the investors bewilderment that within a period of one year as a public company, the management has been able to create out three subsidiaries which on their own are prime movers in the ICT and even power and energy sectors of the Nigerian economy at the moment.

The subsidiaries included the MTI Engineering, MTI Unitower and Mass Power integrated services limited.

MTI Engineering, deals with supply, installation and commissioning of cellular network for both GSM and CDMA operators; MTI Unitower, is a collocation and site sharing provider, while Mass Power integrated services takes care of provision of transformers, generators and turbines for the downstream sector.

Nwuche while addressing the investors, noted that the management has been able to x-ray all the sectors of the Nigerian economy, from telecommunications, oil and gas to the power sector and discovered where the deficiencies are, and was able to prime the company's services towards filling those yearning gaps.

For him, the big boom that was coming to the company was its plans to site a transformer assembly plant in Abuja Nigeria to bail both the energy, oil and gas and telecommunications sectors of the economy out of the gulag called power problem they are going through at the moment.

Corroborating his Chairman, Karkitie, said that telecom operators in Nigeria, for instance, needed about 50,000 base stations to be on top of their operations in terms of quality of service, but could only at the moment, boast of about 14,000 to 15,000 base stations in the aggregate.

That perhaps could be the reason he believed that not only did more work needed to be done to ensure that the quality of service improved, but there should also be a strong synergy and coalition between operators, equipment manufacturers and infrastructure vendors to fast track deployment of telecommunications facilities like fibre optics, base stations, among others.

But for the group heads who gave insight into what their subsidiaries had done and projected to do, there was a whole lot of future for investors in the company to hope for.

Chief Executive officer of MTI Engineering Mr. Selwyn Watkins, said his company had won several purchase orders to build cell sites for different telecom operators even as it projects revenue of about $6.6 million in the 2009 financial year.

According to Watkins, "we won purchase orders to build 91 sites out of a possible 500 green

Field sites for MTN Nigeria; also purchase orders to build 121 sites of a possible 400 collocation sites for Zain; 10 sites for Multi-Links with a further 20 sites depending on performance; 24 sites for Nokia Siemens Network with a further 50 sites underway and 10 sites for Starcomms with a further 20 depending on performance".

He also boasted of also doing fibre optic maintenance for Glo as well as building 30 cell sites in Ghana.

For Mass power integrated, AGM operations, Engr Isiaka Taiwo did not hide where the company was going and why. "Within three years ,the company will acquire a large expanse of land in a well accessible location in Lagos that will house its generator assembly plant, soundproofing factory , painting shop, workshop , warehouse storage facilities, and the administrative building.

"The need for assembly plant is that it will save the company a lot of cost and enhance our competiveness. For instance, the duty paid on CKD is 5% , basic generating set is 20% and imported soundproofed generators attract 50% duty. Difference of 15% or 45% reduction in cost is not a small saving .

The CKD will also reduce handling charges by 2% , giving a total 17% or 49% savings which will greatly increase our profitability. The cost of CKD will be cheaper than basic generators which will also reduce our finance charges as the cost of importation will be reduced

It does not end there, currently local sound proofing of generator (16-30KVA) costs around N250,000.00. Assembly plant will afford us the opportunity to produce sound proof canopies directly at a maximum cost of N130,000.00 , given a saving of N120,000.00 (48%) per canopy.

"Besides, Nigerians spend about N1.022tn yearly to purchase imported power generators as a result of the failure of the power supply in the country. The Yar' Adua administration is promising 6,000MW of electricity by December 2009, but the power generation is dwindling to the extent that in March 2009, it was said to have reduced to 400MW.

All projections on our energy needs are based on guess work and the fact of the case is that nobody knows the actual power requirement of the nation".

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