ELLICOTT TAKES THEIR CUSTOMERS THROUGH THE LOOP.
With 38 dredgers delivered to the Nigerian market in the last 5 years, Ellicott Dredges of Baltimore USA becomes the single biggest supplier of dredgers to the Nigerian market as at today. These are mainly series 370s and 670s cutter suction dredgers. The majority are deployed to sand mining and closely related projects in the Lagos-Niger Delta axis. But in terms of the trend of demand, the more frequent order since last year has left the 370 series and is now hovering around the 670 series and higher models…an indication of increasing maturity and development of the Nigerian indigenous dredge owner and operator. It also signals an advancement of the local industry being driven mainly by huge demand for sand as various infrastructure projects are tackled in the fast-developing nation. Multinational dredging firms which use larger dredging units usually source their equipment from other manufacturers in Europe and the USA.
Perhaps as a result of perceived leadership responsibilities, Ellicott Dredges organized their first-ever customer workshop for all owners and operators of their machines in Lagos last month. The event included a Powerpoint presentation on topics like “scheduled maintenance”, and sought to touch base with the common problems faced by operators in the field. It had one of Ellicott’s field-service-and-parts officials, Andrew Queral, specially in attendance. He gave a lecture and took questions and comments. But not just owners of dredges made by the company were in attendance; other interested persons were attracted to the event perhaps because it was promoted as a workshop focused on discussing operational aspects of such dredgers. They were all welcome to the one-day event which held at Oakwood Protea Hotel in Lekki, Lagos.
Ellicott’s delegation was made up of the known and the hitherto unknown, that is, Paul Quinn and Walther Mather on the one hand plus the trio of Peter Eberle (Ellicott’s new Managing Director in charge of Major Projects and Joint Ventures), Andrew Queral (from the company’s Customer / Field Service department) and Jack Fiddis (Manager, Customer Service). Mr Queral anchored the day-long lecture and took questions, though the other delegates participated to answer questions. Overall, this was a satisfying breathe of fresh air to many these dredge owners, who however, demanded that Ellicott do something about establishing manpower training for dredge operators in Nigeria.
Quite a few interesting points emerged before the buffet lunch and the afternoon session, including the fact that most of the supplied dredgers in the Nigerian market were mainly deployed to sand-mining. This is consonant with the forces of demand and supply since the need for sand now in Nigeria far outstrips any other demands made on dredgers in this country. The sheer magnitude of ongoing construction work is mind-boggling and partly explains the attitude of the Lagos State government to get a hold on regulation of the sector before it breaks loose. Answering a pointed question, Paul affirmed that most of the Ellicott dredges they had seen in sites were deployed to the sand business. Perhaps this simplified the task of Mr Queral whose attention on the operability of dredgers in Nigeria was therefore focused on maintaining dredgers that were just pumping sand day in, day out.
Then you began to hear what to most field service engineers must be a familiar refrain: “there’s maintenance every 10 hours, every 50 hours, every 250 hours, every 500 hours, every 1,000 hours and every 2,500 hours”. Any class with such an easy chorus will be a piece of cake but soon some of the field-hardened dredge masters in the class began to come up with those far-fetched questions dredged up in some remote fields in Bayelsa state…very far from most civilizations! But a combination of Queral and Paul eventually appeared deft enough to manage them; after all, these guys were around when these machines were put together!
On spare parts and better dispensation of field service in the future, the announcement of a joint venture with Japaul Oil and Maritime Services Plc (see story) seemed to confer some extra confidence. Moreover, Paul’s announcement of Elicott’s enhanced profile of dredge building and alliances in other nations suggested that soon the lead time between payment and delivery of dredgers will be shortened. He said currently Ellicott was building 4 670-series dredgers with spud carriers for stock. He noted that the company was now allocating dredge assembly between facilities in the US and Bahrain such that 370s will be assembled in Baltimore and Wisconsin plants; 670s in Baltimore and Bahrain plants; 1170s in Bahrain and Wisconsin and 1870s in Bahrain and Wisconsin.
Other information released by the delegation can be gleaned from an exclusive interview granted DDH after the events of the day by Paul and Peter. Excerpts:
DDH: How is Ellicott’s joint venture with Japaul Oil and Marine Services Plc going to work?
Peter: Probably the question before that is why the joint venture? Customers here like customers anywhere in the world want local representation, availability of parts and availability of training. And we feel that the best way to service that, the best way to keep people on the water dredging, is through a joint venture where we combine resources from Ellicott of the design, engineering and manufacturing with a company like Japaul Oil and Marine Services. That way they have the local representation. They know the market and they bring more than just an office space to the equation. So with this design, the way that it should work and the way that we are hoping it works and the way it is designed to work is that the joint venture will take care of the service and maintenance of not only the existing fleet of Ellicott dredges in this area but new dredges as the joint venture brings them along. This also leads us into sharing of resources, allows us to open up new markets where we can have a greater presence in other countries in Africa and given the amount of business going on, that’s very attractive to all entities. Down the road, in a few months perhaps, there will be an inventory of parts here, available to everybody as a community instead of a one-on-one situation. And probably the most important part too, is the ability to provide a consistent and constant training programme to the operators of the dredge, something that is followed through. And our intent will be to have a programme that is module-based. So we wouldn’t take people through all dredging in one day, that’s overload. But to concentrate on two or three aspects of dredging and then the next month, have those people go to the second cycle and have a new group start on the first cycle and have the second cycle in the afternoon…so that we are constantly having a flow going through and that way it’s effective for the people coming to the training and they can retain more. It’s effective for us from Baltimore supporting this. At the same time, there’s an overlap train-the-trainer program, so we have more people available to train future operators. More people will be trained how to operate and more people will be trained how to service and maintain (the dredges).
DDH: Where are these students going to come from, off the street or from your customer base?
Peter: It should come from our customer base. I think that is a readily available market. And I also believe that there are a lot of people that would do more dredging if they could find competent people. So they may find people with a certain skill set, whether it’s driving a bull-dozer or a crane, and say this is somebody that I want to send to this programme. It’s a great way because it’s not a large commitment of time to start the apprentice programme.
DDH: What of the lecturers, are they going all come from the US or combined with any local resource persons?
Peter: Until we have people trained locally who are competent and have the ability, this programme will be designed by Ellicott and implemented by Ellicott. One of our commitments to the joint venture is to provide that. The other thing that we understand by doing that is that we have control over this training, as the mother-ship, if you will. When we have controlled the training and then when we have the confidence that it’s in place, and it’s rolling, I am sure that we will still be here very often, but we will like it to be a self-sustaining programme.
DDH: Is it going to be paid for?
Peter: In the initial term, I am sure that Ellicott and the joint venture, in some form, will pick up their training. If it is an elected programme, somebody who just wants to send somebody there, they would probably have to pay but that hasn’t been decided yet.
DDH: Will the model of training involve the use of a dredger?
Peter: It should use a dredger because there are so many available. Also, our joint venture partner, Japaul Oil and Marine Services Plc, is in the dredging business, so we have the availability of dredgers. We feel very committed to the Nigerian market; this is the first true operating joint venture that we have signed. We are committed to this marketplace, to the success. What we are also bringing in and Japaul also, I believe is bringing in, is the flexibility to change our model as the market needs change.
DDH: Do you see this arrangement evolving one day into Ellicott establishing a dredge coupling or assembling plant in Nigeria?
Peter: Ellicott constantly evaluates our efficiencies and the many variables that have to be considered in making such a commitment.. We may start with side tanks at some point but our task at hand is to provide the training for the operators of the dredges and provide a local resource to support the dredge operations.
DDH: And to Paul- sir is it a challenge that Ellicott dredges in Nigeria by unit numbers are predominant in the market now. Is it a challenge to maintain this kind of record?
Paul: There is something I ask myself constantly because there is always a fear of saturation. I ask this regularly but the need for infrastructure development here in Nigeria is so great that probably I don’t think we are going to reach a point of saturation for many years. There are just too many projects, too much need for dredging.
DDH: So you don’t feel any incumbency of a challenge for now?
Paul: No, of course, there are always challenges but to maintain the amount of business that we have we are actually looking to increasing not just to maintain an existing…We expect increases in business. And not just by increased market penetration but just because these projects, like the East-West Road (in Port Harcourt) and other projects, requiring huge amounts of sand. The geography of Nigeria lends itself to a large amount of dredging.
DDH: Right now, you have let the audience at the workshop know that it’s not just Ellicott 370s and 670s that you do but higher models. As you see more orders for the higher models, do you anticipate more orders for bigger Ellicott dredgers?
Paul: Absolutely. That trend has already started. I noticed this change on my last visit. It was very obvious that there was a definite shift in the market towards larger machines. And we expect that to continue. That is one of the reasons we are expanding the plant in Wisconsin. Specifically after my last visit, I reported that there a very definite indefinable shift in the market to the right (if you lay out our machines in a line). Because of that they have been expanding the factory in Wisconsin which was only at that point, three months old. So, it’s already doubling its size.
DDH: In terms of the service centre you mentioned with Japaul Oil and Marine Services Plc, is the centre going to include some Nigerians? We ask this because we see that you have used some indigenous technical experts in the past to couple dredgers for your customers here in Nigeria.
Peter: Absolutely, we believe that people that are currently contracted with Ellicott will be contracted by the joint venture. We believe this to be absolutely transparent. The main thing that will change is the name on the letterhead. But, if anything, this is an additional resource, you know. The resource is local, quicker, and by combining the two companies, is bigger.
DDH: How is your order-book now affecting time of deliveries? The last time we spoke the lead time was about a year to a year and plus. Is it now increasing or decreasing?
Paul: Our order-book right now is probably very large but at the same time, we have increased manufacturing capacity. The order-book is probably the largest in Ellicott’s history but then the manufacturing capacity is also the largest in Ellicott’s history. So the effect on lead time has not been that dramatic. Recently, it started to come down a little bit because the new facilities are gearing up. So, very good order-book but also very good manufacturing capacity.
DDH: So, people can eventually expect dredgers to be delivered in six months or nine months?
Paul: Less than that.
DDH: For all classes of dredgers?
Paul: Our goal is to have some available in stock, all classes, up to 20-inch dredges. That is our goal. And our management has been very focused on placing orders on speculation; we are building dredges on reasonable market assumptions..
DDH: In the last edition of DDH magazine, there was a report based on an Ellicott press release about a name change and some workers added, etc. Do you want to comment on this?
Peter: I think the name change speaks for itself. You know, Ellicott is a brand, it’s recognized around the world. So, to solidify that through the change makes sense. As Paul mentioned, with our order-book growing and our capacity growing, we needed more people to handle that. So, we have our increased our engineering. We have increased our customer service. Jack Fiddes whom you met today has been brought in. His group is increasing, our engineering group is expanding, and our purchasing group is expanding. It’s all growing the shoe a little bit bigger than the foot and allowing the foot to grow into it. We want to be ahead of our demand.
DDH: Paul, any other comments…?
Paul: Yes, because of Nigeria, we have to, really, increase manufacturing capacity because of this market; it’s significant. On the joint venture, it’s also better if one is to have a joint venture in Nigeria to have one with one who has experience in dredging, who has also marine experience and who has actual infrastructure already such as waterfront facilities, cranes, and workshops. That’s the best combination rather than just any investor with money but no knowledge of the dredging business itself or how to find staff or workshop facilities.
Peter: We also believe in Japaul, that we picked the best partner available, with the resources that they have and the scope of the work that they do and what they bring to the table.
DDH: On the training programmes, are they going to have curricula, like say for engineering, four or five courses, for technicians, such a number of courses and then for all other branches of dredging?
Peter: The way I described it before is a module programme where you take three aspects of dredging and say, this is the first module. So, on day one, you learn the basics of dredging and when you return each time you learn additional aspects of dredging. We anticipate starting new classes every other month so there will constantly be new groups beginning the training and always have people progressing through the training.. The other thing about the training that is very important is that it allows us to encapsulate the market place and identify hotspots for issues that we can cure or promote as a group.…It is a very effective way for us to communicate to our customers..
DDH: How is the information about the training programme circulated? Is it by news media advertising or what?
Peter: We are going to start out with our existing customer base, by phone, by email. We do from time to time have mailings that go them. So, it would be many different mediums carrying the message.
For more information on Ellicott Dredges please visit www.dredge.com