Starting a Granite Mable Company in Nigeria - Assignment Example

Starting a Granite Mable Company in Nigeria This paper is about the creation of a granite and marble company in the federal republic of Nigeria. It highlights the culture of the Nigerian people and how a foreigner is supposed to react to different scenarios. The paper also shades some light on the numerous challenges that one is bound to encounter and what is the best evasive technique to use. The essay also gives advice to the new entrepreneurs on issues that may have been left out. Introduction. Granite is a rock that is light in color and has grains large enough to be visible to the unaided eye. It will be formed during the slow cooling of magma under the earth’s surface. Its main components are feldspar and quartz, even though, there are small amounts of amphiboles, mica, and numerous other elements. Due to the varying composition of the granite rock, it comes in various shades and colors such as white, pink, red and gray. Mable, on the other hand, is the metamorphic rock that will be formed when limestone is exposed to the pressure and heat of the metamorphism. Its main component is calcium calcite and normally can have other minerals such as quartz, clay minerals, graphite, iron oxide, pyrite, and micas. Under the intense condition of metamorphosis, the calcite components of the limestone rejoin each other and form larger calcite crystals. The Nigerian Culture. Nigeria has its unique culture that is also in cooperated into their business world. One is likely to find self spending in the first two hours of a first conversation just exchanging pleasantries and talking about matters of family and health. To them, these matters are of great importance. One might find himself trying to rush things at this stage. Something that is worth noting is that Nigerians often work as a team and closed door meetings are bound to be frequently interrupted by phone calls, emails, and errands. Effects of politics on businesses in Nigeria. Some scholars have argued that the law of supply and demand is enough to shape the business world in any region, however, others argue that politics is very vital for business in any region of the world. However what is now known to be true is that lots of political factors determine which direction the economy swings. The ruling government in Nigeria often introduces new rules and regulations or eliminate old ones that determine how business transactions in the country are to be countries out. By this, may include; waivers, import promotion decrees, tariffs, import duties and industrial promotion policies. It can is best illustrated by the 2004 import waiver of Dangote Industries that enabled the firm to catapult and were a primary supplier of imported cement. The same firm was granted a 10-year tax holiday that made it become the leading manufacturer of cement in the country. Another illustration of how negatively a business firm can be affected by rules and regulations introduced by the ruling government are the 2005 import embargo lberti cement, which cost the firm its market share (Ibpus.com, USA International Business Publications, 2007). How religious issues affect business in Nigeria. State plateau has an elevation of 4000 feet above sea level and is the closest Nigeria has had to a hill. The soil in the plateau is very arable, and numerous agricultural produce comes from these part of Nigeria. It is because of this that Jos, the capital of Plateau state, was considered the paradise of West Africa. This, however, is not the case today. Religious violence has killed thousands, and as the assault by the military against civilians and Boko Haram continues; there are other unreported cases of conflict in villages of Jos. The result are inadequate security, incomplete respect for the law, increased cases of a weak government. All these are not favorable to businesses in the region and tend to scare away people leading to scarcity of labor and employment of under qualified workers since the qualified workers tend to seek better working environment. The impact of mining on the economy. Mining has the potential of shaping the economy of any nation and Nigeria is no exception. Mining creates employment opportunities, and this makes it better for some people to be able to fend for themselves. In addition, mining tends to increase a country’s gross domestic product. These are because the minerals that are produced in abundance tend to be exported to other countries that have imported the minerals. In return it earns the country foreign exchange. Because of the high abundance of granite and marble in Nigerian soil, a sensible amount of them is exported. However, mining comes with some negative impacts on the job market. A good example is that the prices of minerals tend to fluctuate at times and this leads to low job security since. Hence, companies are forced to lay workers off, impacting the economy negatively. The importance of team work over venturing into the business alone. a) There will be more shared ideas in a team. b) A team is more efficient than a single person. c) The weak areas of members is accounted for in a team. d) There is going to be better office relations in a team. Resources available. Nigeria has valuable stones such as marble, granite, dolomite, and basalt. It is in numerous towns such as Osun, Enugu, Ekiti, Ebonyi, Kogi, Oyo, and plateau. Among the numerous minerals that Nigeria has, granite and marble are amongst the most valuable and affordable. Other resources include both human and machinery. People. Marble mining like every other form of mining is labor intensive. However, it is not a major issue since Nigeria has a population of 170 million, of which a considerable number are unemployed. However, there are some people who are not qualified to provide specialized labor and they are made to do manual labor in the mining sites. Even with the population of 170 million, there are cases where the Nigerian population cannot provide the specialized labor required in the mining of marble of granite. This forces the employers to seek qualified applicants from neighboring nations and if there still lack the skilled labor required, countries like China tend to be a great source. In fact, some employers do not look for labor in the neighboring nations; they head straight to China when they lack it in Nigeria. Materials. Mining in Nigeria is like in any other parts of the world. It requires some very sophisticated machinery in order to save both time and money. International companies that sell this equipment have realized the demand of their products in the country and have decided to start exporting them into the country with the hopes of raising some profits. These have led to a stiff competition between rival companies that manufacture the equipment; the result is the equipment being sold at lower prices. However, one has to take care not to purchase refurbished equipment from the locals thinking that they were new, as many have been duped and ended up losing colossal amounts of money (Hilson, 2006). In addition, the machinery should be bought from a trusted supplier since they could be fake or stolen. Energy. Nigeria is one of the few African countries that is endowed with an enormous amount of mineral resources. Even though, it is a big nation with a vast population of a staggering 170 million people. A considerable majority of the mineral resources are viable sources of energy and these includes; petroleum, coal, tar sand, natural gas. Other sources of energy are; biomass, solar, hydro and wind. However, the exploitation of such energy resources has been skewed, and those that have been well exploited are a few. These are; natural gas, hydro and petroleum. Transportation. Nigeria like most African countries faces a major issue when it comes to infrastructure development. This is because the infrastructures that are to be used for transportation are not well looked after and end up in poor conditions. The main reasons as to why the infrastructures are in this condition is because of missappropriation of funds by the relevant authorities, lack of financial support from the government, poor skills or lack of specialized labor in the country and neglect of the government and the private sector (IBP USA Staff, International Business Publications, USA, 2008). The primary source of transport for minerals is road transport that is not in a great shape. The biggest issue facing the mineral industry is the lack of a suitable means of transport. Issues to be a plan for. One of the biggest challenges facing the economic state of the country is the poor infrastructure of the state. Hence, it will be of the entrepreneur’s best interest to set up the company with a good transport system and connection. These could include road or a functional railway station. The other alternative is to construct a suitable road to connect the firm’s suppliers, the firm and consumers just to enhance the efficiency of running things. Corruption is also a major issue in the western African country and at times, the popular alternative to completing missions both illegal and legal is through paying someone a bribe. Strategy to consider. Business strategy is the science, art and craft of implementing, formulating and evaluating decisions that will enable an organization to achieve both its long term and short-term goals. A suitable advice to a potential entrepreneur in the granite marble business in Nigeria is to be ready to start small. In addition, is to have a considerable amount of money as a precaution (Ibpus.com, USA International Business Publications, 2007). Recommendation to ensure the venture. The entrepreneur should not be over-ambitious and not to be over precautious in that they let go of suitable opportunities. They should consider hiring specialized labor from abroad and have a well-qualified managerial team. They should locate their firm close to the suppliers and most important of all be in proximity with the proper transport system. Government issued permits The following permits are required; Reconnaissance Permits (RP); it is the permit to do some exploration for a mineral and is are strict to a certain zone (Hilson, 2006). Exploration license (EL); it is the permission to determine the characteristics, market value and cost of mining a mineral and, it is restricted to an individual zone. Small Scale Mining Lease (SSML); it is the permission to do some mining in a maximum are of 3km. It does not allow for intensive and sophisticated machinery. Mining lease (ML); it is the permit to a firm and pertains the zone listed in the EL and SSML. Quarry Lease (QL); it is the permission to carry out a quarry operation for one’s permit, and it is given to holders of EL. Water Use Permit; it is the permission to use land for the obtaining and conveyance of water. It is given to holders of EL, OL, ML, and SSML. It is important to know that the titles mentioned above and licenses are transferable except for RP only that, it has to be approved by the MCO and the minister (Ibpus.com, USA International Business Publications, 2007). Importance of making it a group project over being an individual project. a There will be a lot of shared ideas. b There is greater efficiency since things get done faster. c The weakness of group members is accounted for. d There is going to be better office relationships. Religious concerns. Nigeria is made up of two main religions that seem to have developed strong rivalries towards each other over the past one decade. It is because of this that any investment in areas affected by the resultant bloodshed needs very keen consideration. These include the plateau state and its capital Jos. Relevant Supporting Documentation. The following are documentation that may be required to do business in Nigeria; Business license. Fire department permit. Air and Water Pollution Control permit. Sign permit. County permit. State licenses. Federal licenses. Sales Tax Licenses. Health Department licenses (IBP USA Staff, International Business Publications, USA, 2008). Make up of Nigeria. General statistics for the Nigerian population is as follows; The current GDP per capita is $2,800. The current population of Nigeria is around 170 million. Nigeria’s source of income is agricultural output (70%) which is mainly used for domestic purposes. It is a Federal Republic consisting of 36 states and an additional capital territory. It has a Bi-cameral Legislature and an elected president. The Federal Republic of Nigeria has three different but complementary organs, and each checks the other two. Namely the organs are; Executive, Legislature and Judiciary (Falola & Heaton, 2008). The main religions are Christians and Muslims, who have recently been bitter rivals. The greater majority of the population are Muslims. How to create businesses in Nigeria. The following are requirements for a company to be in cooperated with Corporate Affairs Commission (CAC); Conduct availability search CAC. The preparation of Articles of Association and Memorandum. Stamped and completed papers handed with the true copies of relevant documents. (IBP USA Staff, International Business Publications, USA, 2008) References. Falola, T., & Heaton, M. M. ( 2008). A History of Nigeria. New York: Cambridge University Press. Hilson, G. (2006). Small-scale mining, rural subsistence and poverty in West Africa. Rugby, Warwickshire: Practical Action Pub. IBP USA Staff, International Business Publications, USA. (2008). Nigeria Mining Laws and Regulations Handbook. New York: Intl Business Publications. Ibpus.com, USA International Business Publications. (2007). Nigeria Mineral & Mining Sector Investment and Business Guide. New York: Intl Business Publications. Read More