$500m LADOL logistics facility thrives despite tough business environment

Despite the challenging business environment in Nigeria’s maritime as well as oil and gas servicing sectors, business activities, especially demands for vessels and oil drilling rigs repair operations, are currently on high ebb at the Lagos Deep Offshore Logistics Base (LADOL), an indigenous-owned logistics service provider.

This is happening in the face of LADOL’s lawsuit with Samsung Heavy Industries over the proposed $3.8 billion Egina oil platform project, a contract awarded to Samsung and LADOL by Total for the integration of a Floating Production Storage and Offloading (FPSO) platform at LADOL base in Lagos. The litigation resulted from the alleged schemes by Samsung to exclude the indigenous firm from the juicy job.

BusinessDay recent visit to the base revealed that despite the ongoing litigation, the logistics base, which has delivered on its services to the IOCs in the past without compromise, has been growing strong in the business of oil drilling rig repair and vessel dry-docking such that the facility has become the largest rig maintenance and repair facility in Nigeria. This has also succeeded in making Nigeria the hub for rig repair in West Africa such that the company has recorded 100 percent completion of rig repair from other West African countries such as Ghana.

It was also discovered that two huge oil drilling rigs – by names ‘Onome and Oritsetimeyin’ – are currently undergoing repair and maintenance services at the base.

These multi-million projects with huge benefits to the economy add to numerous rigs that have been serviced in the base since inception of the facility.

LADOL’s investment in Nigeria

The $500 million facility located next to the entrance of the Apapa harbour at the LADOL Free Zone was developed to deliver multi-logistics services that include vessel dry-dock and repair, oil drilling rig repair and fabrication services to maritime and international oil companies (IOCs) operating in the upstream sector of the economy.

LADOL logistics facility has 8-hour vessel turnaround time. It was developed with high load-bearing quay of 8.5 metres draught with a workshop, warehouses, hotel, offices, passenger jetties, marine craft and certified handling equipment.

The development of logistics bases, according to Amy Jadesimi, managing director of LADOL, is one of the keys to making Nigeria the hub for deep offshore oil and gas in West Africa, because logistics bases provide the support and the environment needed to enable all upstream petroleum-related activities to take place in Nigeria.

“This includes the full spectrum of activities from engineering, procurement and fabrication to personnel support, drilling and production, which will in turn bring billions of dollars of long-term investment, create thousands of jobs and enable long-term and sustainable economic growth in the country,” she said.

Harnessing new opportunities

In its next phase of development, the management of LADOL is also perfecting plans to invest into human capital development, which the LADOL boss said go hand-in-hand with physical capital development.

“We are pushing ahead to build our training school in LADOL, which is aimed at filling the skills gap in high value industries, allowing products currently not manufactured in Africa to be built in Nigeria for the first time, by Nigerians in a Nigerian facility,” Jadesimi said. Free zones are a way of attracting billions of dollars into Nigeria through lowering the costs of doing business in Nigeria. So far, they have proved to be essential to meeting the economic goals of the country just as was done in countries like China and the United Arab Emirates.

“We expect that with strong government support and continued widespread indigenous investment and with a robust free zone regime in place over the next decade, over 50,000 direct and indirect jobs will be created through LADOL, many more facilities will be created, with indigenous investors turning greenfield areas into industrial parks and building other strategic infrastructure that would create more jobs, and Nigeria will become West Africa’s hub,” said the LADOL boss.

Government support

Olusegun Aganga, minister of industry, trade and investment, visited LADOL at the weekend as part of his ministry’s oversight functions.

While conducting the minister round the free zone, Jadesimi applauded him for encouraging the growth of indigenous businesses in Nigeria through the recently developed Industrial Revival Plan. She pledged LADOL’s support in ensuring that the plan becomes a reality, through continued investment in building critical and strategic infrastructure in the country.

Jadesimi expressed belief that building of critical infrastructure by LADOL would result to creating thousands jobs through the development of related industries such as steel manufacturing and engineering.

According to her, government needed to support private indigenous investors, including LADOL, through creating a level playing field that allows free and fair access to the market to all investors and operators, particularly the indigenous operators; actively encouraging the use of indigenous investors to develop facilities; strict enforcement of the Local Content Act to its fullest so as to protect indigenous investors and encourage collaboration among private infrastructure developers in the country.

In his response, Aganga lauded the management of LADOL for investing largely in the development of the base, while appreciating the firm for the over 1,000 jobs created so far in the base as well as thousands of jobs that the facility aims to create in the future.

The minister observed that an investment such as LADOL has the opportunity to not only provide jobs but to also provide backward integration, such as high-level skill development among youths. He also said there was need for private investors to partner government in closing the gap between job availability and skill development, given that there were so many jobs available in the country which Nigerians lacked the skills to tap into the opportunities.

“There are huge opportunities in the country and the Federal Government is committed to ensuring that Nigerians and indigenous companies take full advantage of the opportunities. We would continue to create enabling environment for businesses to thrive and to give incentives such as tax holidays to companies operating in free trade zones,” Aganga assured.

Making Nigeria part of G20

LADOL base, just as other privately-owned infrastructure in Nigeria, is committed to promoting Nigeria into becoming one of the G20 economies of the world. To achieve this, Jadesimi said the government needed to provide enabling environment for private indigenous investments in infrastructure development and industrialisation across Nigeria to grow. This, in her view, would result in developing long-term economic growth, poverty reduction and entrance into the G20 economy with Nigeria exporting finished goods, engineering, technology and other high value products and services to other parts of the world.

“It would also result to job creation and exponential increase in economic activity in the country,” she said.

Uzoamaka Anagor