LADOL FTZ: Destination for developing mega industrial and offshore projects in W/Africa
The concept of Free Trade Zone (FTZ), is no doubt, critical to industrialisation and it has significant impact on economic growth due to the fact it offers ease of access to infrastructures that are not readily available in other parts of the country, but needed to drive business, writes UZOAMAKA ANAGOR-EWUZIE.
By building Free Zones, countries like Nigeria can become industrialised because it helps solve the infrastructure and bureaucratic issues, and also provides businesses with the needed security and facility that not only aid operation but present Nigeria as an attractive place for business.
Many developed and emerging economies have used the concept of Free Trade Zones (FTZ) to drive industrialisation. This is owing to the fact that well managed free zones have the potential to attract foreign direct investment (FDI) and create jobs and wealth for both the government and the governed.
Recently in Nigeria, a good number of investors are putting in resources into developing FTZ across the country for the sole aim of building industrial clusters that would help diversify Nigeria’s economy from depending solely on oil, to earning revenue from other sectors.
According to the Nigeria Export Processing Zone (NEPZ), Nigeria has about 32 registered Free Zones that specialise in areas such as oil and gas logistics, manufacturing, food processing and packaging, fabrication, repair, trade services and among others. Some are in operation while others are still under construction.
Notable among these zones is the Lagos Deep Offshore Logistics base (LADOL) that is strategically located at the entry point to the Lagos harbour. The FTZ provides a one-stop-shop facility for industrial, oil and gas logistics service companies as well as maritime firms operating in West Africa.
LADOL, which is currently the West African largest base for rig and vessel repair, provides 24/7 operations with a wide range of services and facilities that ranges from cargo handling and inventory management to onsite hotel and recreational facilities.
The 100 percent private indigenous-owned facility is currently playing host to the integration yard of the Floating, Production, Storage and Offloading (FPSO) oil platform, known as Egina, built in partnership with Samsung Heavy Industry (SHI) as technical partner for Total Oil Company. The Egina project, which has received many commendations from companies and government representatives across the global, is worth over $3.8 billion.
As an emerging Free Zone, the over $500 million facility focuses on heavy industrial projects, given its heavy quay wall that enables operators in the zone to bring in larger vessels of equipment and plants needed for their operations, and to also move large volume of export products to other markets.
The FTZ is also well fortified with all necessary government agencies such as the Nigeria Customs Service (NCS), Immigration Services, the Nigerian Navy, NPA officials and a host of others who oversee due diligence in its operations.
A recent visit to LADOL base reveals that it currently has the second to the tallest crane in the world and there is plan to install the highest crane capacity in the whole of West Africa, projecting the FTZ as the utmost location for mega industrial project in Nigeria, given the available of needed infrastructure and equipment for executing heavy industrial projects.
The promoters of LADOL recently embarked on building a 50 megawatts power plant to ensure regular power supply to aid smooth operations in the zone. This is in addition to the training facility being built at the base to train Nigerian engineers, who will specialise on working on heavy industrial projects. The environment also operates with world-class HSE standards and it reduces the cost of operation and increases the size of projects the investor can work on.
Describing LADOL as a huge investment that can create thousands of jobs as well as revenue for the economy, Emukowhate Charles, a member of the Nigeria Ports Authority (NPA) board of directors, who visited the base recently, said the FTZ would not only help to industrialise the nation, but would become a huge foreign exchange (FX) earner and also play critical role in helping the Federal Government curtail the lingering scarcity of FX.
“We are impressed by what we have seen here and it shows that there is hope for this country. The fact that LADOL FTZ has an integration facility (the only one of such in Africa) that is capable of becoming a huge foreign exchange earner for the country makes it a win-win situation for all especially now that Nigeria needs people and organisations that can generate FX,” said Charles.
Despite the volatility in the price crude oil, promoters of LADOL have continued to invest in the developing critical infrastructure in the Zone because, to them, the best time to invest in infrastructure is actually when prices are low.
“By operating in LADOL, deep offshore oil and gas companies into production and drilling support can cut their cost of operations, which amounts to billions of dollars annually for the shareholders. It is also good for Nigeria because it presents her as a competitive and attractive destination for investment,” said Amy Jadesimi, managing director of LADOL in an interview with BusinessDay.
Jadesimi, who stated that Free Zone is the ultimate vehicle to making Nigeria an industrial hub in West African region, added that operating in a Zone like LADOL, enables the operators to take finished products to any market in West Africa with minimal bureaucracy.
This, according to her, is helping to change the global perception of Nigeria from a troublesome place with bureaucratic bottlenecks that stunt business growth, to a competitive business place with trainable population and serious industrial clusters like LADOL base that enable investors to operate at relatively low cost.
As a company in the forefront of changing the existing business model of exporting jobs out of Nigeria, to ensuring that jobs that can earn Nigeria foreign exchange are done in-country, LADOL believes that it is no longer acceptable for foreign companies operating in Nigeria to be exporting jobs that have potential for earning foreign currencies.
Recently, due to the coming on-stream of FTZ like LADOL, Nigeria is beginning to gain traction in the international community such that some Norwegian and UK trade delegates comprising oil and companies, general industrial and manufacturing firms, who have been trying to figure out the way to get into Nigerian market, visited the LADOL FTZ recently.
“We are here because we have heard about LADOL and we are impressed by what we have seen and we are confident that what we have seen will enable us to properly advise those companies back home. There was no doubt the capability of Nigeria to play the role of West African hub in oil and gas operations,” said Gulbrand Wangen, head of the Norwegian delegation to Nigeria recently.
John Howell, British Prime Minister’s Trade Envoy to Nigeria, who visited the base few months back, had this to say, “We are impressed with LADOL’s facility and it speaks volume about Amy’s visionary approach to the whole of the development and we are sure that it is going to be advantageous in the future. Being the first of its kind in the whole of Africa tells me that we are dealing with somebody who is very visionary and at the forefront of being able to address critical points.”
For industry close watchers, the implementation of rule of law and transparency as well as running of sustainable democracy, have also helped in changing Nigeria’s perception abroad and bringing back investors’ confidence.
“Our international publicity is to sell Nigeria and we are trying to attract companies into Nigeria because many of the companies that visited LADOL recently, would end up investing in Nigeria and this would give them access to one of the biggest market in the world,” the LADOL boss added.
To ensure that Free Zones like LADOL succeeds, there is need for the Federal Government by way of legislation, to help create win-win business model by resolving the lingering issues of monopoly among FTZ operators through the creation of a level playing field for all.
There is also need to encourage more companies to flourish through collaboration, and government can achieve this by engaging operators in a round-table to resolve the lingering industry issues.
Government needs to encourage the quick passage of the Nigerian Petroleum Industry Bill (PIB) and other necessary legislature to encourage foreign investors to invest in the Free Zones.
UZOAMAKA ANAGOR-EWUZIE