August 11, 2022

…Governor also in Mushin to inspect State-owned leather production factory

A vehicle assembly plant being jointly set up by Lagos State Government and CIG Motor is getting ready for completion, it was learnt. Governor Babajide Sanwo-Olu, on Thursday, visited the plant on WEMPCO Road in Ogba area, where he inspected the progress of the automobile facility.

The Governor was received by the chairman of the CIG Motors Company Limited, Chief Diana Chen, a Chinese investor.

Sanwo-Olu’s visit came 17 months after the Governor formally sealed a Joint Venture Agreement with the automobile company for the establishment of a Vehicle Assembly Plant in the State.

The plant, expected to be delivered by the end of the year, will have a jointly-run factory for the production of different classes of brand new cars.

Establishment of the Vehicle Assembly Plant in Lagos was part of the bilateral agreements reached by the State Government and Chinese Investors’ Community in November 2019 during Sanwo-Olu’s business trip to China.

IBILE Holdings Limited, a State-owned corporation, is supervising the investment on behalf of the Lagos State Government.

The Governor inspected the fully equipped assembly halls already constructed in the assembly yard. The plant is expected to produce 5,000 units of new vehicles when it becomes operational.

Other ancillary facilities already in place in the yard include wheel balancing chamber, spray booths, maintenance hall, noise testing chambers, sprinkling arena to test for roof leakage, staff lounge and auto parts warehouse.

Sanwo-Olu said: “This is one of the things we promised Lagosians. Apart from our relationship with CIG Motors, there is a partnership in which we are setting up a vehicle assembly plant. This is becoming a reality, as the site is live with structures and assembly equipment. The place has been well prepared for the production of vehicles. We initially agreed it would be SKD (Semi Knocked Down) but now the facility has moved to CKD (Completely Knocked Down).

“We are hoping that their first plan is to have a production capacity of 5,000 vehicles, after which it will be pushed to 10,000 vehicles per year. We are happy with the level of work at the site and the commitment of our partner to this project.

The plan is that we want to stop buying fully built vehicles from abroad; we want to be able to have an assembly line where we can employ our citizens in an automobile production chain.”

The Governor said the automobile assembly plant would create employment opportunities for local skilled workers, as 95 per cent of the workforce would be sourced locally.

Also, some of the parts used in the assembly plant would be sourced locally, including air conditioning system, valves, ball joints, bolts and nuts, and batteries.

Sanwo-Olu also made a visit to the site of the Industrial Leather Hub being constructed by the State Government in Matori Industrial Area, Mushin.

The tannery project was conceived by the Sanwo-Olu administration in 2020 for the production of leather products, such as shoes, belts, bags and upholsteries. The facility will also offer training opportunities for youths to learn skills in leather manufacturing and earn a living in the value chain.

The Governor disclosed that there would be 42 lock-up shops in the hub, where finished leather goods would be traded.

Sanwo-Olu said: “Raw leather exported to China and Europe are brought back to Nigeria in finished goods and they are more expensive. We initiated this idea of a leather hub to break into this economic cycle and add values to raw leather materials produced locally.

The hub would be a primary manufacturing source for retailers in the ecosystem. There is a large leather market in Mushin to take up the produce to consumers; traders would no longer be burdened to turn tanned skins to finished products.

“The hub is about 65 per cent complete; the contractor has committed to the December deadline. We will give him two additional months, because we are expecting the equipment to be used for the leather production to start arriving from October. Economic value of this is that we can start and end the entire production process here in Lagos. Jobs would be generated and businesses would be developed.”

The Governor said the completion of the hub would translate to generation of direct and indirect jobs for Small and Medium Enterprises (SMEs) in the ecosystem.