We Are Pioneering Dry Construction in Nigeria – Toyin Gbede, marketing director, Nigerite
Nigerite Limited is no longer content with manufacturing, marketing and installation of cement fibre roofing and ceiling sheets, compressed sandcrete roofing tiles, vinyl floor tiles as well as integrated roofing solutions, which it has done successfully for over 50 years in Nigeria. Toyin Gbede, marketing director of the company, speaks with Boye Ajayi, property consultant, on why the company is pioneering dry construction in Nigeria, and other related issues as Nigerite recently launched a campaign on dry construction, mortgage and housing finance as well as other initiatives. Excerpts:
What is the rationale behind the campaign on dry construction recently launched by Nigerite Limited?
Based on years of research and analysis of the housing market, we are in the process of launching an integrated building solution using modern building materials in the construction process. As a manufacturer of building materials who understands industrialisation process, we know that if various components of the building can be pre-manufactured, leaving assembling to construction site, there will be substantial gain in construction time and, by extension, new skills will be created, while existing skilled labour will be retooled for improved efficiency. This is why we are pioneering the dry construction process in Nigeria. Our approach is first to create awareness about dry construction as a necessary method worth considering in our quest to resolve the housing problem. This explains why we brought all stakeholders together in January to discuss the method.
Can dry construction compete favourably, in terms of cost benefit, with other conventional building processes?
Yes, dry construction will compete favourably with conventional methods by reducing cost of construction. However, it is important to note that innovation and attendant changes everywhere in the world are strictly not assessed from the point of view of price alone though price is important. Price could not have been the main consideration in the development process of aircraft by the Wright brothers. If price was the major consideration, I don’t think they would have succeeded. Our guiding principle is innovation, newer processes, new skills and skill retooling, among others. Ultimately, even if it is not cheaper today, it will become so based on economy of scale. For instance, imagine when we were building houses with mud and thatch. When there was need to transit to block and mortar, I can imagine this same question being asked: Is it going to be cheaper than mud? And the answer would be, no. But if you want a mud house now, it will be much more expensive than the brick house because the skills are no longer available; the logistics of obtaining the material is now high. Most international hotels in Nigeria that create ethnic touch by erecting outdoor huts with thatch roofs within their complex spend a fortune now to get it done.
With conventional wet construction process, for example, if you go to the bank to borrow money to build a three-bedroom house, it will take an average of six months to one and half years to build and occupy it. However, the bank begins to charge interest from the principal from the day the loan is approved. So for the duration of the construction period, you are not gaining anything but gaining bank interest in addition to rent if you are a tenant. In contrast with dry construction method, the same three-bedroom (apartment) takes one or two months to construct, the investor will stop paying rent and start repaying bank loan. So, we think of the innovation and modern technology first. Ultimately, as acceptability increases, it becomes more affordable. Ultimately, from experience in other leading economies where this method is used extensively, the cost comes down by 25 per cent to 30 per cent.
Have you been able to carry the government along to drive this initiative?
Indirectly we can say yes, to the extent of calling all stakeholders to discuss the way forward in meeting the 16 million housing deficit. All stakeholders in efficient housing delivery have different roles to play, private sector and government alike. We all have to be very careful in not repeating the mistake of the past that government should be responsible for everything. On issues relating to housing delivery, government should be content with creating appropriate enabling environment for private initiatives to drive the industry except may be at the social housing level. Government should resolve the bottleneck surrounding issues of mortgage; provide sites and services schemes; moderate provision of adequate skill manpower, including retooling of existing pool of available construction workers including artisans. This is already more than enough assignment for the government.
What about the training of artisans to master the technology of dry construction?
We are currently working with the Lagos State Vocational Educational Board and MCS at the Government (Trade) Training College Ikorodu. The Nigerite Centre for Building Solution Excellence is currently under construction. When completed, it will be equipped with modern equipment to aid learning of modern construction method with special emphasis on dry construction. MCS, a knowledge and skill acquisition consultancy outfit working with the City and Guilds of London, will run the centre. The centre, when completed, will also serve as a training centre for retooling of artisans in Lagos State. The centre will thus assist in creating a pool of required skilled manpower necessary to drive dry construction in Nigeria.
Is there any special housing project Nigerite is undertaking as example so that other stakeholders can follow?
We are not a property development company and we are not planning to be one. We are basically interested in providing innovative construction solution for property developers and private owners. Our roles as major player in the real estate sector are to create awareness and drive acceptability of dry construction method, to create an integrated building solution product, which can be purchased off the shelf. We have built models of dry construction buildings in our premises at Ikeja to enable our consumers to experience it first-hand. All stakeholders need to experience the dry construction building, the consumers, financiers, developers, people in government for acceptability of the complete value chain. This way all benefits, attributes, objections and fears can be fully addressed.
In what ways do you think government can resolve the bottlenecks associated with housing and mortgage financing in Nigeria?
The construction sector and much of the housing sector need a lot of funding to increase output and improve affordability. Regular commercial banks with higher interest rates cannot service this sector under the same financial regime applicable to day-to-day banking. The construction sector all over the world requires long-term funding at reduced interest rate. This is why mortgage has been the engine that drives construction sector, especially the housing sector. Government involvement and intervention in mortgage can therefore not be over-emphasised. Government intervention is usually in the primary mortgage institutions, which become a vehicle to drive the secondary mortgage sector. This is, therefore, a very important sector which government must address as a matter of urgency to stimulate housing delivery. In other places governments intervene by providing long-term funds from natural resource/endowments to the primary mortgage to stimulate construction sector. Housing issues can be summarised into the basic factors of production: land, labour, capital and entrepreneurship. Government should bother about easy access to land at affordable rate, midwife access to fund through funding primary mortgage directly or indirectly while secondary funding, labour issues and entrepreneurship should be driven by the private sector. This should be the direction of PPP in construction and housing sector.
What would you say is the mainstay of Nigerite?
The driving force is our mission to be the number one building component solution provider in Nigeria, a one-stop shop for building materials and solutions. We started out over 50 years ago before independence, as a roofing company. But today we manufacture and market international brands in roofing, ceiling, partitioning, cladding, flooring and integrated building solutions. Our belief in the entity called Nigeria is not in doubt because while majority of contemporaries have relocated to other countries or shut down altogether because of Nigeria’s various economic challenges, we are still keeping faith with the objective of our founding fathers to help in the industrialisation of Nigeria. We believe this market needs us as a multinational company to leverage on international best practices in product offerings. We know that Nigeria will soon move from the realm of being a potential economic power into an industrialised nation.