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NLNG Subsidiary Cuts Workers’ Salaries by 50%

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NLNG

Seafarers in the employ of the Nigerian Liquefied Natural Gas Ship Management Limited, a subsidiary of the Nigeria LNG Limited, will from September 1 receive half of their current salaries.

The decision is said to be in response to the more than 60 per cent reduction in the company’s revenues occasioned by the drop in the global oil price, which has fallen from $140 to about $40 per barrel in the last one year.

The Manager, Nigerian Content, NLNG, Mr. Charles Okon, who spoke for the General Manager, External Relations, Dr. Kudo Eresia-Eke, confirmed the review of manning levels and wage scale for officers on the Bonny gas transport vessels.

The decision, he explained, was taken to minimise the need for staff lay-offs as had been the case in several companies in the industry.

Okon said, “This action is in line with the depressed global market situation and consistent with prevailing industry rates, and has been taken in the interest of the sustainability of the business.

“In reality, the reviewed wage scale cannot be said to be a salary reduction as claimed. The fact is that the company has simply adjusted and aligned wages with internationally obtainable benchmarks.”

He stated that the company’s Nigerian officers’ dollar- denominated wages, upon conversion at the existing rates, far exceeded wages for their peers who were being paid in naira.

He added that other conditions of service of all the NSML personnel, including leave days, would remain the same, while leave emoluments earned in line with current wage scales would also be unaffected.

Okon said, “Several BGT vessels have already been laid up and many more areas of reduction are being explored. This is consistent with the national oil company guideline for relevant industry operators to reduce operating costs by 40 per cent.

“Management has already communicated these developments to the staff and shall continue to engage them during the implementation process, and appeals for the continuing understanding and cooperation of all parties.”

However, seafarers with the NLNGSML have protested the decision, claiming that it was taken without proper consultation with their representatives.

Some of the seafarers, who spoke on condition of anonymity, said their counterparts from other countries like India, Malaysia, Pakistan, Russia and Croatia, who were also in the employ of the company, had challenged the 20 per cent wage cut imposed on them.

One of the affected seafarers said, “This unjust proposed wage cut could kill dreams of achieving the indigenisation plan, which is committed to ensuring that Nigerian seafarers are well represented on the board of the BGT and NLNG chartered vessels.

“We are being forced to comply with a proposed 50 per cent salary cut within seven days or risk losing our jobs. Why should Nigerian seafarers earn lower than their foreign colleagues?”

The President, Nigerian Merchant Navy Officers and Water Transport Senior Staff Association, Matthew Alalade, said the association was informed of the situation last week.

He stated, “Although the company has blamed the economic downturn for this decision, the seafarers are not happy with it. We plan to resolve the issue on behalf of the senior officers. The junior officers are already members of the Maritime Workers Union but we still intend to protect them.

“For the senior staff, it will be a 40 per cent cut in salaries, while it will be 50 per cent for the junior staff.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Appointments

Buhari Suspends Hadiza Bala Usman as MD of NPA, Appoints Koko

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Hadiza Bala Usman - Investors King

President Muhammadu Buhari has suspended Hadiza Bala Usman as the Managing Director of the Nigerian Ports Authority, according to sources quoted by Peoples Gazette.

The president immediately appointed Mohammed Koko, the director of finance to replace Ms Usman.

While Ms Usman said she was aware of her suspension, she said she has not received any formal letter or communication to that effect from the Ministry of Transport.

Ms Usman was appointed as NPA chief in 2016 and has repeatedly propagated her reform policies that sought to redirect the organisation, which is one of the top revenue-generating entities of the Nigerian government.

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FCMB Appoints Ms. Muibat Ijaiya as Independent Non-executive Director

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FCMB - Investors King

FCMB Group Plc has appointed Ms. Muibat I. Ijaiya to its Board as an Independent Non – Executive Director, following the approval of the Central Bank of Nigeria.

Muibat Ijaiya is a Strategy Development and Execution expert focused on measurable transformation and impact. She has 19 years consulting and advisory experience, working with clients across Europe, Middle East, Africa and Asia, to provide expert-led solutions that support private and public sector organisations to develop and actively implement their strategies to achieve measurable change, transformation and/or improved performance.

She holds a BSc Mathematics & Education from the University of Surrey and a Warwick Business School MSc. Management Science and Operational Research certificate. She also obtained an MBA from the University of Manchester.

Muibat Ijaiya is a partner at Strategy Management Partners, a professional services organisation focused on helping private and public organisations around the world to clarify, develop, align and execute their strategies.

Prior to this, she was a director with Palladium Group Inc (United Kingdom & Middle East) and previously worked directly with Drs. Kaplan & Norton, the co-creators of the Strategy Focused Organisation and Balanced Scorecard concepts. Other advisory experience was in Corporate Finance with Ernst and Young (UK) focused on Transaction Advisory Solutions, Restructuring, Turnaround and Commercial Due Diligence. She also worked with Robson Rhodes RSM Business Consulting (EMEA) focused on Transformation and Change Management.

Muibat continues to work in advancing the science of strategy execution, particularly for organisations in complex industries and public institutions focused on transforming key sectors, and the Board is assured that her wealth of experience would be of great impact to the FCMB Group.

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Is a ‘Tesla’ About to Eat Construction Equipment Makers’ Lunch?

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Tesla Model 3 - Investors King

With digitalization, electrification and autonomy all set to change the industry, could construction’s established players be wrongfooted by a new market disruptor? Industry thinkers Alan Berger and Carl-Gustaf Goransson discuss who’s in the strongest position: Old guard or Newcomers.

In 2008 no one saw Tesla Motors as much other than a niche electric sports car company. Certainly not other car companies – in 2009 Tesla only made 147 cars. Fast forward 12 years and Tesla is making 500,000 cars a year and is valued higher than the top six car manufacturers combined.

Of course, much has been written about the unexpectedly and disproportionately large disruptive effect Tesla has had on the global automotive industry. Like construction equipment, the car business has been consolidating, with no significant new entrants in a long time. This raises the question as to whether the same thing could happen in the construction equipment world – could a disrupter barge into the sector and win? Indeed, the industry is trying to digest the triple challenges of digitization, autonomous operation and electrification – creating an opportunity for new players to emerge.

Central to the success of today’s OEMs is their extensive product, customer and application knowledge. But given the technical changes that are coming, is that going to be enough to save them from a digital disruptor?

Product

The new era of machines will require a completely new architecture, one that is designed around the capabilities of an electrical drivetrain. It will also be adapted from today’s equipment in order to transfer power with cables instead of belts, and shafts and hoses will enable new ways to optimize performance and productivity. Such a platform will be largely software controlled, moving a portion of feature development from relatively slow-moving mechanical changes to faster and more easily upgradable software changes. That said, by nature, construction equipment does physical work, and the working tools will remain similar to that used today. A disrupter would develop a completely new machine, while existing OEMs could do so only if they resist the temptation to take the ‘easy’ path of adapting current machines. Indeed, OEMs would be able to leverage their vast portfolio of intellectual property to speed this along. Advantage OEM.

Supply chain

Large parts of the supply chain will remain the same, as many components and raw materials of tomorrow’s machines will be like today’s. However, new components will be needed as well, particularly in the drivetrain and hydraulic systems. (If there is a hydraulic system). This has triggered a competitive scramble that is now pitting traditional engine manufacturers against transmission/axle manufacturers and hydraulic component suppliers. While this new competitive dynamic will take time to sort itself out, clearly the traditional supply base is positioning itself to offer the needed new parts. Therefore, existing OEM-supplier relationships – and access to the latest technology – will favor existing OEMs over newcomers. Advantage OEM.

Distribution network

With new, digitally enabled sales models, the traditional role of the dealer is likely to change, and a new player could greatly accelerate this. Just look at the success of Tesla’s direct selling model. That said, construction equipment requires responsive and intensive access to service, which is a vital part of the dealers’ offering. A disrupter could build a service-only network, leveraging established dealers while moving most of the sales activity on-line. This is difficult for existing OEMs and therefore the newcomer has an edge. Advantage disruptor.

Parts/service

It is well known that parts and services drive a large part of total operating income for OEMs. Simplified, software-driven machines require less maintenance and this will negatively impact the traditional business model and reduce the value of existing OEM’s captive parts distribution networks. Indeed, there is no need for a newcomer to develop their own parts network, since there are now third-party solutions such as Amazon. A newcomer can then more easily focus on other sources of high margin recurring revenues – such as offering features-as-a-service. Advantage newcomer.

Access to capital

To fund their existing portfolio and prepare for the technical transformation today’s OEMs have to balance R&D, capital expenditure and operating income – not an easy balancing act. Not so startups, whose compelling business models and few external dependencies can get access to significant capital. All they need to worry about is being focused on developing the new products, services and business. Advantage disruptor Before concluding, there is one additional and important consideration. Tesla was founded well before the automotive industry recognized the need and technology availability. Clearly, this is not the case for the construction equipment industry today. Taking all of these factors together, it seems that the existing OEMs can drive the disruption themselves if they are willing to commit to the extensive and complete transformation needed. But, if none do so, don’t be surprised if someone else decides to do it for or to them.

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