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Costain: How We Survived Global Financial Crisis

Category: Capital Market

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Costain: How We Survived Global Financial Crisis

By Crusoe Osagie, 06.21.2010


Costain West Africa has stated that although it was not directly impacted by the financial crisis that has rocked Nigeria and other parts of the world between 2008 and 2010, some small scale suppliers and service providers in its chain took a hit with indirect implication for their own operations. 



Managing Director of the company Mr. Ayodeji Karim said they had to take steps to cushion the effect of the crisis on many of the companies with strategic relevance to them to ensure that Costain West Africa's operation continued without hindrance in the thick of the crisis.According to Karim, the construction giant had to provide credit lines for some of the small companies in its chain to enable them fulfill their obligations, which were strategically relevant to their own objectives.

Karim  disclosed  that the company's  ambition is to  hit N100 billion revenue base in a couple of years. He told THISDAY in Lagos that the company is  poised to hit their substantial target despite the setback in 2009 as a result of the global economic recession and the Nigerian banking sector reform, which had indirect impact on the company.He said  that even though there were serious uncertainties in the market in general and in the banking sector in particular, Costain's structure, which enables it play effectively in both the public and private sectors allows it to hibernate in one sector when the other is not doing well.

“The banking crisis took its toll mostly on the private sector and we had a few of our client running out of funds to continue with their project but during this period our projects in the public sector enabled us to stay above water because the public sector was not affected much by this crisis,” he said. Noting that the  situation  had been making it almost impossible to predict the economic climate for the subsequent 12 months, the company was able to secure some reasonable amount of businesses that have further fuelled the prospect for success and profitability.

According to him, with the Nigerian Railway's N7.5 billion contract awarded recently, the company has a “looking forward order book in excess of N25 billion, which is a record for the business over the last two decades.” Karim listed the new Nigerian Stock Exchange building in Port Harcourt; the construction of a multi-storey block for Cityscape in Rainbow City, Port Harcourt; construction of Abakaliki Market in Ebonyi state; the new Head Office for Media Trust in Abuja and the rehabilitation of the railway line between Jebba and Kano approximately 650 kilometres as some of the reasons for the buoyant outlook.

The Costain boss added that the company was merely interested in lifting its operations without impacting on the industry.For this reason, he said the company decided to fill a void in the local construction industry, by making huge financial commitments to the development of masonry. 
According to Karim, about $50,000 is required to bring in masonry personnel into the country yearly, as Nigeria still lacks the much needed capacity and quality in this area.

To this end, he said the company had invested in the training of all manners of masonry through specialised workshop construction, where young Nigerians were trained to fill the gap. He said,” One big area of need in the industry is the lack of skilled personnel in the local construction industry. We have decided to tackle this headlong by establishing training workshops in the various aspects of our operation.We have a furniture and joinery division that is the second to none. The products of these training workshops are of beneficial impact to the industry.”



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