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Investors urged to seize opportunities at the Port of Onne before it's too late

Article - December 11, 2012
The window of opportunity at Onne is currently wide open, but it won't be forever
THE PORT OF ONNE IS RENOWNED FOR ITS HIGH SAFETY STANDARDS AND ITS CONTRIBUTION TO THE LOCAL ECONOMY
The Port of Onne, located in the Niger Delta, and situated downstream from one of the country’s largest cities, Port Harcourt, is developing at an exponential rate. Astute investors ought to seize on opportunities available now, according to Matteo Volpi, Director of Intels Nigeria Ltd, the port’s logistics operator and a driving force in the progress of the region. Economically the country is developing quickly, therefore, as Mr Volpi suggests, it is important “that any investor move as fast as possible to position themselves in this market before the barrier is completely closed or it becomes saturated.”

Established by the government in 1997, the Rivers State port is Africa’s first “free zone” dedicated to the oil and gas industry, and has effectively enabled the industry to flourish. Major incentives attracting investors to Onne include deferred customs payments and high-tech infrastructure and security, among others. Over the years it has established itself as a one-stop shop for local companies and foreign investors, and is developing its manufacturing component at an accelerating pace.

Any investor [should] move as fast as possible to position themselves in this market before the barrier is completely closed or it becomes saturated.

Matteo Volpi, Director of Intels

In addition to its advantageous free zone status, the presence of multinational oil companies at the port, such as Exxon Mobil, Chevron, Halliburton and Total, serve to ensure its growth further. As it stands, the port is one of the most modern in Africa and features well-developed facilities and stable infrastructure, according to Harm Blaauw, the General Manager of West Atlantic Shipyard, a shipbuilding and ship repair subsidiary of Piriou Group that has seen its workforce at the port increase to 200 workers. Economic and employment growth in the region will only increase the country’s competitiveness in the global market.

Onne enjoys stable and supportive government relations and Intels has also benefited from the government’s support: in 2006, it was awarded port operations management for 25 years. Since 2003, many of the port’s government-owned facilities have been privatised. As Mr Volpi puts it, companies have to work closely with various ministries and all levels of government.

The government’s role extends to its implementation of a local content initiative, which has become a successful collaboration between government and business. The Nigerian Content Development Monitoring Board (NCDMB) was established in 2010 for the purpose of building local capacity and increasing local participation in the oil and gas sector. Companies work alongside the NCDMB to foster development of the industry. Training locals is a prominent focus; companies based in Onne are increasingly investing in the local community, providing job training and transferring knowledge and technology. Intels employs 14,000 local workers, with that number easily doubling if accounting for indirect employment. West Atlantic Shipyard’s training centre aims to train Nigerians to fill high-ranking positions. Also Tenaris, a leading piping supplier for the industry with operations on every continent of the globe, offers a knowledge-sharing programme at its Tenaris University. Maintaining a local focus within these types of programmes is crucial to raising the quality bar in Nigeria’s workforce, according to Managing Director Gonzalo Troncoso. He says Tenaris, like other companies in the area, is committed to the country’s development through employment, training and investing in local content.

In addition to all of these positive developments, the port offers impeccable security. Despite a history of challenges and unrest in the Niger Delta, the Intels concept of training locals and involving the community has proved to be the right strategy, and has achieved the superior standard of safety the area experiences today; it has also set the example for other companies to follow. Local involvement, particularly through employment, guarantees the protection of the area, says Mr Volpi, and Intels’ significant investments in port security have qualified it as having “the highest safety standard of any Chevron operation in the world.” It has also contributed to improving the quality of life in the area, with the emergence of shops and restaurants and better housing.

So what lies ahead in Onne’s future? The expansion of its manufacturing sector is poised to become an important feature of the port, with companies drawn to the local content initiative choosing to manufacture on-site. Manufacturing valves, as well as maintenance and repair services, which were typically done overseas, can now be done in Nigeria, says Mr Volpi.  For example, Intels, in partnership with other companies, has invested in equipment cranes in order to facilitate industrial construction – a resource that did not previously exist in the area – and according to Mr Volpi, creating and fostering in-country projects such as this one is paramount to contributing to the industry’s growth.

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