Star Auto carries on despite daunting challenges

Star Auto Industries Limited, the only surviving brake pads and lining manufacturing firm in the country, has continued to run skeletal production at its plant located at Satellite Town, Lagos, despite threatening odds.

The company currently runs its production processes for about eight hours daily, in spite of the fact that it can do so for over 20 hours, had production costs been low and machinery working at full capacity. Currently, the firm’s plants consume 1000 litres of diesel every eight hours, meaning that the total cost of energy alone is N155,000 every day.

Chidi Ukachukwu, CEO, Star Auto Industries, tells Real Sector Watch that output is often infinitesimal when production runs on small generators, while energy cost will be too high if it runs on giant-sized generators. The effect of this energy challenge is that machines work below capacity, while costs are eventually transferred to products, thus making it difficult for them to compete favourably with imported products from China and other Asian countries, he says.

Currently, the firm boasts of 100 staff members, but has the capacity to create more direct and indirect jobs if these odds are surmounted.

“We can have over 200 direct workers and much more indirect workers, as people have to do the supply, marketing, among other things. I have a passion for creating jobs for a number of unemployed graduates roaming the streets but that can only work if there is government support,’’ he says.

There has been serious government assistance in the cement and sugar industries, resulting in expansion activities by Dangote, Lafarge, UniCem, Ashaka and Northern Cement Company. Consequently, Nigeria has become largest cement manufacturer in the sub-Saharan Africa (SSA).

Apart from backward integration, there was reduction in tariffs on equipment, while interested importers were asked to establish local plants. Ukachukwu believes that it is improper to have only one brake pads and lining manufacturer in the country, suggesting that government needs to extend hand of fellowship to interested investors in the industry.

“It is not right to have the same tariff for finished goods and raw materials. We have the National Industrial Revolution Plan (NIRP) and I believe something will be done in this direction,’’ he states.

He further adds that government should encourage ministries, departments, agencies and car users to patronise local manufacturers, stressing the need to ease off difficulties in access to funds.

Ukachukwu hails the automotive policy of the government, but adds that emphasis should be truly laid on manufacturing.