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Operating in Nigeria since 2012, PowerPro Company Ltd sells electrical test & measurement equipment and solutions to the region’s power and manufacturing industries. General Manager, Adebayo Johnson talks here about PowerPro’s operations, growth expansion strategy, renewables, and the challenges brought on by the decline in oil prices.
owerPro Company was incorporated in 2009, but began full operation in 2012. At the time, there weren’t many companies with a specialised attention on providing test and measurement equipment to the Nigerian power industry, and through the years, PowerPro has successfully managed to stake its claim on the market.
The demand for electricity isn’t going to reduce, so surely the longevity of the company is safe The company offers its products and services to a range of industries, including power generation — from traditional thermal power plants to renewable sites. Where transmission is concerned, PowerPro specialises in application engineering and complete solutions for system and substation monitoring. Providing solutions for power distribution is another of PowerPro’s strengths, along with the provision of test equipment for the commissioning of new plants and facilities. Finally, there’s the oil and gas industry, where PowerPro provides test equipment for electrical asset management and reliability testing of both onshore and offshore assets.
“We created the versatility and flexibility that enabled us to adapt and deliver quality products and tailored solutions to our clients by forming strategic and long-term business alliance with world leading manufacturers of test & measurement equipment such as ISA Test, Phenix Technologies, Baur GmbH, Fluke Corporation, GE Grid Solutions etc. We have invested in training and acquisition of modern electrical test equipment. We also started renting equipment to other companies. Not many companies in Nigeria have done the same.”
Supply and demand
Nigeria’s electrification rate is relatively high compared to other West African countries, yet still only 55.6% of the population has access to electricity. Across the continent as a whole it is estimated that over 600 million people are without a ready and reliable source of power. At the same time, Africa’s population is continuing to climb, making the need for new generation projects more obvious.
“In the short period since we began, the company has expanded in terms of how well we’ve been able to train our engineers in order to give expert service and support to the industry,” explains Johnson.
Presently, the generation capacity of Nigeria’s power industry is below 5,000MW. To meet rising demand the country’s government has targeted a supply of 40GW, with contributions from thermal, hydro, coal, solar and other forms of renewable energy.
In order to push this forward, several memorandums of understanding (MOUs) have been signed with multi-nationals such as General Electric, Power China, Siemens AG, Electrobras, Daewoo E&C. It is hoped that this will facilitate the development, financing, construction and operation of new facilities with around 10GW of capacity while promoting private sector investment. Against this backdrop, PowerPro has spotted an opportunity in West Africa, and decided to take it. The high demand and low supply of electricity makes the region an ideal market for a company with its skills, equipment and technical expertise. “The thing about West Africa is there are so many opportunities for expansions. Just like in Nigeria, the need for electricity is rising exponentially,” says Johnson. “Here, the population of the country is about 170 million. This figure grows 2.8% each year, and with this, the demand for electricity rises.” Hence, for electrification rate to grow with guaranteed availability and reliability, facilities for power generation, transmission and distribution must be regularly monitored and maintained. “For us, the opportunity lies in partnering with the asset managers to lower their cost of operations, reduce the risk of
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equipment failure, extend the asset mid-life and minimize the occurrence of expensive and unplanned outages” Johnson explains. “System availability is critical to power generation, transmission and distribution. Today, the major causes (about 70%) of system collapse in the distribution networks include system losses and equipment failure due to ageing equipment or overloading. However, with the right test equipment we can help the distribution companies deliver sustainable services to their customers.”
A positive outlook
Oil and gas accounts for 35% of Nigeria’s GDP, and pays for 70% of government spending, so the fall in prices has had a significant impact on the economy. Despite these challenges, Johnson is upbeat about the future of his business. “Business has slowed down, and the cost of importing products has increased. I think it has affected a lot of businesses in Nigeria — even the government is reluctant executing some projects. And many clients, especially in oil and gas, aren’t doing as many projects because of the slowed economy. But for us, in the long run, we will see the economy readjusting and we have a positive forecast for improvement.”
“It’s a cyclical market, so we’d expect to see prices go up again. But the demand for electricity isn’t going to reduce, so surely the longevity of the company is safe.” One policy the Nigerian government is implementing now is to shift from financial reliance on hydrocarbons, with a view to diversifying and investing in other areas. Additionally, plans to attract over $16 billion in investments to the oil and gas industry in the next four years were outlined in the 2015 Budget, alongside intentions for much needed refinery repairs and rehabilitation, which should boost the domestic power generation sector. Much of this will be aided by the passing of the long awaited Petroleum Industry Bill, which could be brought into law early next year after eight years of revisions and contests, and should lead to a spate of high profile investments. With all this in mind, PowerPro’s services will be in even higher demand.
There are also significant propsects outside traditional fossil fuelled projects. “There has been a lot of agitation for renewable energy sources in Nigeria,” says Johnson. “Nigeria is rich in natural energy resources, and to date we have only exploited a little of this. I think it holds a lot for the future of electricity in Nigeria. Recently there has been interest,
but the challenges have been the low level of investment and knowledge about some of the areas we can tap this renewable energy from. But for us as a company the idea of energy equals a lot of promises because I see a lot of investments come into this, so for us this creates more opportunities.” “One of the challenges we have in place is the absence of calibration laboratories and service centres. It is usually cumbersome to get the equipment back to the manufacturing plants for recalibration. What we’re doing is putting these calibration centres and laboratories to work, so we can provide even more services for our clients.” “One of the things we have done recently is to stock portable test and measurement equipment in order to facilitate prompt delivery to our clients and as earlier mentioned, we have a plan to put up service centres and calibration shops that will support the products we are delivering to the industry,” he explains. “At PowerPro, we are very passionate about solving the problem of power collapse in Africa and we are playing a strategic part in ensuring that unplanned outages become a thing of the past.”
POWERPRO COMPANY NIGERIA LIMITED 3, Obasa Street Off Oba Akran Avenue Ikeja Lagos Tel: + 234-909 737 4588 | +234-909 019 8004 Email: firstname.lastname@example.org
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