Adewale Sanyaolu
Hostilities in the oil rich Niger Delta region have created opportunities for investment in pipe production. Before now, pipelines were considered part of host communities’ assets which were highly catered for and protected.
But the situation has suddenly changed as such assets are now targets for constant attacks by Niger Delta agitators, who consistently blow up oil and gas pipelines in a bid to get attention from government.
At the end of such acts of sabotage, International Oil Companies (IOCs) usually bear the brunt most as their pipelines transporting crude oil from oil and gas field to export terminals remain under constant attacks.
A recent report from Shell Petroleum Development Company (SPDC), indicated that the company, apparently the highest producer with over 600,000 barrels per day (bpd) experienced 39 cases of vandalism and oil theft between January – April 2019.
In its latest Briefing Notes, Shell stated: “Security remains a high priority due to continued crude oil theft and criminality in parts of the Niger Delta. Illegal refining and third-party interference are the main sources of pollution in the Niger Delta today. Third party interference caused close to 90 per cent of the number of spills of more than 100 kilograms from The Shell Petroleum Development Company of Nigeria Limited operated Joint Venture (SPDC JV) pipelines in 2018”.
These thefts and destruction to oil and gas assets create investment opportunities because while some pipes are to be repaired, others would have to be replaced due to ageing factor.
Investment opportunities
Immediate past Minister of State for Petroleum Resources, Mr. Ibe Kachikwu, said at the 2017 edition of the Offshore Technology Conference (OTC) in Houston, Texas, USA, investment roundtable with US officials that the Trans-Nigeria pipeline project, the Industrial Park at Ogidigben Free Trade Zone, would cost $14-17 billion, while the revamp of LPG and building of new Compressed Natural Gas (CNG) plants across the country alongside pipeline and storage tank construction would cost $3.9 billion.
The former minister’s disclosure shows that investors in pipe mill plants could key into the Nigerian Content Development and Monitoring Board (NCDMB) pipe mill scheme in Polaku, Bayelsa State to make good money for themselves.
However as part of its human capital development mandate under the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, the NCDMB in 2015, sponsored 22 young Nigerians to China for training in Steel Pipe Mill Manufacturing skill.
The training was part of an advance preparation by the board to ensure that there are Nigerians with requisite skills to operate a steel pipe mill company currently under construction at Polaku community near Yenagoa, Bayelsa State, by Mainland Pipe Nigeria Limited in collaboration with the board.
These are certainly part of the quick wins for indigenous businesses that can take the lead by latching onto the opportunities inherent in pipe milling before foreign investors who are already waiting in the wings could enter to crowd them out again..
PVC production
The adoption of Polyvinyl Chloride (PVC) pipes technology has relegated the use of metal pipes to convey crude oil, finished petroleum products, water, sewer as well as for protecting underground cables.
PVC pipes are known to be highly durable, safer and perhaps difficult to damage and can last for longer because of their composition; being made from the combination of plastic and vinyl materials. With PVC pipes, one wouldn’t have to bother about rust and bacteria formation inside the pipes.
Taking off
Starting a PVC pipe manufacturing company would open one up to opportunities in the construction industry, because there is hardly any construction job that is done without the use of PVC pipes. No doubt, establishing a PVC pipe manufacturing company may require huge capital outlay, but the truth is that it is highly profitable, especially if you know how to position yourself in the market place.
Business plan
PVC pipe manufacturing company is not just any kind of company that you cannot start without adequate preparation. The fact that huge capital is required to establish a PVC pipe manufacturing company means that one should do a proper feasibility study before venturing into this capital intensive business in order to protect the investment.
You are not expected to start your own PVC pipe manufacturing company without having in place a comprehensive business plan that can serve as a blue print for your operation.
It is therefore imperative to get your business plan handy and review it over and over again before starting the process of building your PVC pipe manufacturing company.
Even if you have started running your PVC pipe manufacturing company, you would still need to continue to review your business plan. That is the reason you must make your business plan flexible so that you will be able to make adjustments when the need arise.
Raise your capital
If you have done your feasibility study and pooled the required capital to build your PVC pipes manufacturing company, then good for you. On the other hand, if you don’t have the required capital, then you should explore all the available means to raise the required capital.
You may consider getting a loan from the bank or you can sell your business idea to investors, and you can as well raise capital from your friends and family members. Your business plan is one major tool you would need when you are trying to convince people to invest in your business; if your business plan is well crafted, then the process of raising funds will be easier.
The minimum startup capital, depending on the size and type of PVC products to be produced, would be around N100 million because the machines are expensive and have to be imported.
Registration/licensing
If you have undertaken your research project and feasibility study, written your business plan and have the capital required to start your own PVC pipe manufacturing company, then your next port of call would be that you approach the relevant authorities to register your business and obtain the required license and permission.
Furthermore, the authority regulating the industry would have to inspect your factory before you can be issued a license and permission to start your own PVC pipe manufacturing company.
In such instance, certifications and licenses would be procured from the Department of Petroleum Resources (DPR), Nigerian Content Development and Monitoring Board (NCDMB) and the Standards Organisation of Nigeria (SON).