The American Business Council had a chat with Ahmed Raghab, CEO of Mantrac Nigeria Limited to have an overview of the business landscape in the new normal and the business opportunities post COVID-19.
Ahmed has practical experience in developing and managing sustainable businesses, in emerging and frontier economies, as he has worked in several African countries, the Middle East and Russia. He has garnered over 23 years of experience with Mantrac and Caterpillar. In 2017, he began managing the operations of both Mantrac and Delta Nigeria Ltd.
He has a BSc in Mechanical Engineering from the Cairo University and an MSc in Management from the Florida State University. He has attended various management programs and is currently attending the Executive program at the London Business School. Ahmed has been a member of the Egyptian Engineers Syndicate (EES) since 1997; he is also member of the American Business Council (ABC) and of the Manufacturing Association of Nigeria.
Mr Raghab, thanks for making out time for this discussion. For the general public kindly share who Mantrac is in Nigeria?
Mantrac is a business with long rich history of providing value and service to customers in Nigeria and different parts of the world. We are the authorized Caterpillar dealer in Nigeria distributing and supporting Caterpillar construction machines, power systems and material-handling equipment and we have been in the country for over 70 years.
We pride ourselves in our expertise, technicality, skilled workforce and customer focus. We consistently strive to exceed our customer’s expectations.
How has the business grown since inception and how is it adjusting to the new normal?
The business has seen significant growth since inception, not only the expansion of our customer base but also a diverse line of products and business segment to include Mining, Agriculture, Renewable Energy, Rental and customized solutions curated to meet our customer’s needs. Definitely, there have been challenges, but we have some of best people in the industry that guide the company, to navigate effectively through difficult times.
The year 2020 has its own unique set of challenges, from the global pandemic disrupting the lives of millions, to the crash in crude oil prices that led to the devaluation of the Naira, putting many businesses in Nigeria in a precarious situation.
We have had to adjust by ensuring our employees’ health and well being in the Coronavirus outbreak. This remains our priority and by following official NCDC as well as FG guidance, we have a greater chance of making it safely through this global pandemic together.
We are also focused on safeguarding the well being of our company during this crisis, to ensure financial health of the business in these difficult circumstances, by devising an action plan to manage our customer’s needs. The plan has been formulated to prepare the business to operate as digitally and virtually as possible, managing teams remotely, timely adoption of integrated remote working processes; to guarantee the necessary delivery, compliance, and our business is running efficiently with minimal interruptions to our processes.
Mantrac does business in the Agric, Energy and mining space. The deficit of infrastructure is quite high, what kinds of infrastructure projects should be considered critical for investing?
Some progress has been made in closing this infrastructural deficit over the past few years. However, there is a lot of work that remains to be done and a huge opportunity remains largely untapped. Agriculture and power infrastructure remain critical areas for investing.
These would be critical to driving economic growth and positioning the country to take advantage of obvious opportunities. Mechanization of farming is still in its rudimentary stage in the country. Also, a workable structure for Power has to be developed, to help the nation bridge the deficit in the power infrastructure.
Agric contributes about 22% of Nigeria’s GDP, what role is Mantrac playing in the Agric value chain?
Agriculture is a critical part of the Nigerian economy, with food sufficiency and economic diversification being one of the goals of the Economic Recovery and Growth plan (ERGP).
Across the value chain, we have identified land clearing as one of the key challenges for small and medium scale farmers. We designed an initiative, partnering with private, federal and state governments.
Currently, Nigeria generates a small amount of energy from renewable sources such as hydro power, solar, wind and biomass. In 2005, the Energy Commission of Nigeria developed the Renewable Energy Master Plan (REMP), which suggests ideas for renewable energy policies, as well as possible technologies that can be used to fulfill their goals. Nigeria is targeting to expand its energy access to 90 percent of the population by 2030 and 30 percent of its total generation to be from renewable sources.
Could you share insights on the renewable energy market as well as the challenges?
We absolutely believe that renewable energy would play a major role in filling the current deficiency in the energy space in Nigeria. Caterpillar is one of the leading manufacturing companies in energy and in new technologies. As the authorized dealer for Caterpillar, we have entered the renewable space in the last couple of years, investing actively and working to provide tailor made solutions designed to meet the customer needs. Our solutions range from bio-gas to hybrid systems utilizing solar panels and batteries. There are a number of challenges facing the renewable market today. One of the major challenges is that the initial cost of investing in these units can be daunting, preventing many potential users from adopting the products. However we do understand that this is just a transit phase to expand and fulfill the maximum usage in the near future.
In the mining sector, there are lots of upcoming mining companies which require intensive capital for machines. In what ways has Mantrac been able to bridge the finance gap?
Well aware of the capital intensive nature of machine needed in mining, over the years, we have worked to continuously diversify financing options open to customers. A number of product financing options are available to our customers. One is the Mantrac Rent to Purchase Program (RPO), which give customers a rent to Purchase/Own option for our machines. Another is the financing agreement we have signed with a number of commercial banks to provide facilities that helps Customers Bridge the financing gap.
What activities has the company embarked on to resolve the challenges of COVID?CSR, partnership with Govt. et. Al.
Covid-19 pandemic has had a significant impact on the community and we at Mantrac are doing our part in joining in the fight against Covid -19. We have been part of several initiatives to fight against the virus. Some of these include donation of medical supplies to the NCDC and government task force across several States in the country. Our contributions were spread across different sates and geo-political regions. We covered several states including some of the hardest hit regions like Lagos, Abuja, Kano and Rivers state. Apart from the medical supplies, we have also sponsored different awareness campaigns educating people on how to take the necessary precautions and prevent the spread of the virus.
What opportunities has Mantrac identified post COVID-19?
Despite obvious challenges, we have identified a number of growth opportunities post Covid -19. An example of one of these opportunities is in power generation, KW/hr model. We know many businesses and organizations would looking to bring down capital investment not associated with their core business. Thus, we have built a robust business line to partner with them and help take the stress of power generation off their shoulders. There are huge opportunities and projects for agricultural development across different regions in the country. In addition to the aforementioned, the lock-down gave us an opportunity to hasten our New Content Strategies based on the necessary move to digital platforms. Like many businesses, we have embraced this for sometime now, and it has been under development with measured progress. However, in the last three (3) months, we have made rapid advancements, based on the need brought about by current global circumstance. We are confident that this has positioned us to take advantage of several opportunities that would emerge post Covid-19.