POWER GENERATION 70% OF PORTFOLIO

Nigeria 2019 | ENERGY | VIP INTERVIEW

TBY talks to Said Hmaidan, Managing Director of Mikano International, on priorities for the firm, the generator segment, and improving customer relations.

You have recently been appointed MD of Mikano International. What is your priority and where do you want to bring the company?

I came here to transform the organization. Part of the transformation is setting up the company to work as a well-oiled machine, to be able to scale the business, the products, and the services we provide to the community and the market, as well as expanding Mikano into different business lines. To do that, I needed to assess the current situation from all aspects, from how we do things, what is our market share, what people say about us when we talk to customers, and our strengths and weaknesses. We also have a lot of responsibility to the community, as Mikano is well-known for its CSR initiatives with schools and the police. We realize Nigeria has a lot to offer; it is still a niche market and a rich country with huge potential. We have to put the structure in place, then the right people in place, then train the high potential people that will elevate us to a leading the company for the next generation, and fill the gaps with external skills as needed. We are working to structure the company at a higher level in terms of performance and governance. Money can be made in many different ways—we have to have the right product for the right market, to service our clients better, and then make it affordable so we can stay competitive.

How can you scale the business?

There are many different ways. One is through establishing stronger presence on the ground like opening new branches. We are opening branches in Lekki and in Ibadan. Other ways by producing, assembling and selling new products here as well and also grow our existing businesses with high potential such as IPP, Gas, Rental, and Steel Fabrication. For steel, we created different products and are scaling the products to 20 items. Next year, we are going to double them to 40 items and will start selling and branding them. We also changed the branches to showrooms now. The branches were focusing on only selling generators and servicing generators, so we added showrooms to the branches. Each showroom will showcase all products but will be dedicated to a specific product depending on its target market. Our R&D team designed new products that will enter the market in the near future that will capture different market segment and grows existent clientele. Also, we are expanding our businesses and entering new business lines next year.

How is the portfolio of operations divided?

The brand Mikano today refers to the generators. My mission is to make people aware that Mikano is beyond the generator business and is more for the entire power industry. We spent so much effort building the brand Mikano, and now we want to build the product that Mikano sells. From day one, Mikano has been number one in generators and has been dominant in electrical and mechanical work; our mission is when someone is designing a house or building a building, they think of Mikano immediately when they need to buy something.

Is the generator segment still the main revenue stream today?

Absolutely; it is 70% of the portfolio. Approximately 80% of steel manufacturing is for Mikano generators. The remaining 30% of the business is the electric equipment and the rental business. We want to grow all of this but Mikano is known for high quality generators.

What are Mikano's plans to shift away from generators into direct power supply?

Our IPP is basically the megawatt solution, which has provided for many clients in gas and diesel. Gas is cheaper for them, and they pay as they go instead of making heavy investment costs. The generator itself is a capex, so they pay from an opex perspective. We now have Intercontinental, NNPC, MTN, and other major players as clients, and Mikano is running on a gas IPP. The problem is the infrastructure for gas is not fully available everywhere, and this is where the government and the private sector need to step in. There is another liquid type of gas that is coming up and we are hoping that it will be available everywhere so we can grow the gas generator business.

Do the low power tariffs make for an attractive investment, and how difficult is it to be profitable?

There is always a way to make profit. Service is one of them, as are growing relationships with the client and enabling repeat business. With some products, we do not have to make high profit but the relationship will bring long-term and sustainable business for which each partner can grow profitability. Talking about MTN or any telecom, if we provide a big power supply, then we build a relationship and will have more than 1,000 generators being replaced constantly. The low tariffs are a challenge but not a problem.

How would you assess the business environment in Nigeria?

I find it fascinating and promising. It is the network of people that makes things move; the relationship, connection, and trust that you build within your brotherhood that keeps things going within your industry. Of course, the know-how of how to navigate through the challenges of the country is also a major success factor for us. If you live in a remote area, then it is challenging from every different aspect. I have never seen such an environment before but it has unbelievable potential because they know how to do things right and this country has so much to offer.

What is your outlook for 2019?

I hope we all believe in the priorities and the mission of the company. I hope we all work together to achieve better customer satisfaction. One of the things I am working on is redesigning our customer interaction so that we are able to break down the level of support into three different buckets. I want to increase transparency and use technologies to monitor response time, resolution time, and eventually manage the performance of our employees in response to clients' needs and measure how productive they are. By having automation in place when we streamline the customer interaction, rather than silo ways of addressing the customer, we break it into layers and have centralized first, second, and third levels support.