Two machines quoted at very different prices can cost the same to own, and the cheaper one frequently costs more. The purchase price is simply the first payment.
What follows are the six costs that decide the real figure, and how to compare machines properly before you commit.
1. Buying the wrong specification
The most expensive mistake is made before anything is shipped, by buying a machine that does not match the work.
Too large, and you pay for capacity that never produces. A line at twice the size you need does not sit idle for free: it carries the capital cost, the depreciation and often the energy draw of a plant serving customers you do not have.
Too small, and you cap the business at a level you will hit within two years, and buying again is far dearer than buying correctly once.
Wrong for the conditions is the subtler failure. Equipment specified for stable voltage meets Nigerian supply and burns out its controls. A machine that assumed clean, dry air runs in dust and humidity and wears through consumables at several times the rate the manual predicted.
Specify against your actual power supply, your actual ambient conditions and your realistic demand, not against the best case in the brochure.
2. Energy, priced properly
Energy is the cost most often estimated from the tariff and paid at the generator.
Band A grid power runs at 209.50 naira per kilowatt-hour across most distribution companies, and 160 on EEDC. Diesel at roughly 907 naira a litre, through a generator yielding three to three and a half kilowatt-hours per litre, works out near 260 to 300 naira per kilowatt-hour.
The grid is cheaper, but you cannot rely on it, so the honest planning figure is a blend weighted toward the generator rate rather than the tariff.
Run the number for the machine in front of you. A 10 kilowatt line over 8 hours a day, 300 days a year, consumes 24,000 kilowatt-hours. At grid rates that is about five million naira a year. On diesel it is closer to seven million. Over five years the difference between those two assumptions is roughly ten million naira on one machine, which is more than many buyers imagine the whole energy question is worth.
Motor efficiency, correct sizing and power factor correction all move this number, and they cost very little at the point of purchase.
3. Spare parts and the lead time behind them
A machine is only as available as its parts.
When a bearing, belt or control board has to be ordered from abroad, a two-hour repair becomes a two-month stoppage once shipping and clearing are counted. Local conditions accelerate wear on exactly the consumable items that are hardest to source quickly.
Before buying, ask which parts wear, how often, whether they are standard sizes obtainable in Nigeria, and whether anybody in the country stocks them. A machine using common components from a supplier with a local agent is worth paying more for than one that is cheaper and orphaned.
Buy the critical spares with the machine. They are never cheaper than at the point of order, and they are never more valuable than the day the line stops.
4. Downtime
Every hour a machine is stopped, the wages, rent, financing and overheads continue and the output does not.
Plants commonly lose between 5 and 20% of available production time. A line contributing 200,000 naira an hour that is down 400 hours a year has lost 80 million naira of contribution, against a preventive maintenance budget that would have been a small fraction of it.
Most of that is preventable with unglamorous work: a written service schedule, voltage protection, and repairs done when they are due rather than when they are urgent.
5. The operator
The same machine in two pairs of hands produces different economics.
An untrained operator scraps more material, runs below rated speed, and treats each fault as a fresh emergency rather than something to prevent. A trained one produces more from the same equipment and the same power.
Scrap makes the point plainly. A 5% scrap rate against 1% is four times the material loss, and material is usually the largest cost in the plant. Training is measured in days and its return is measured in months.
Insist that operator training is part of the supply, in writing, before you pay.
6. Financing and the exchange rate
Borrowing at Nigerian commercial rates can approach or exceed the price of the machine over a five-year term. A facility at 30% over five years roughly doubles what you ultimately pay.
Currency movement sits alongside it. A machine quoted in dollars and paid for months later is a different naira number, and the difference is not small when the rate moves.
Build both into the decision from the start. Hold your comparison in dollars, settle the rate question deliberately rather than by default, and treat the financing cost as part of the machine price rather than a separate matter for the accountant.
Comparing machines properly
Sticker price tells you almost nothing. Total cost of ownership over five years tells you what you will actually pay, and cost per unit of output tells you which machine is the better buy.
A cheap machine that runs slower, breaks more often and drinks more diesel can cost more per unit than an expensive one that runs reliably. It can also cost less. The point is that you cannot know without doing the arithmetic.
| Over five years | Include |
|---|---|
| Purchase | FOB price, freight, duty, VAT, ECOWAS levy, CISS, clearing and haulage to site |
| Financing | Interest over the full term, plus any exchange rate exposure |
| Energy | Rated draw times realistic running hours, at a blended grid and diesel rate |
| Maintenance | Servicing, consumables and wear parts at the manufacturer’s stated intervals |
| Downtime | Expected stoppage hours times contribution per hour |
| Then divide | By realistic output, not rated output, to get cost per unit |
Use realistic output. A machine achieving 60% overall equipment effectiveness, which is the manufacturing average, produces far less than its rating, and comparing two machines on their brochure figures compares two fictions.
Seven questions before you pay
What throughput do I actually need, and for how many hours a day?
What is the total connected load in kilowatts, and what will that cost me at grid and at diesel rates?
Which parts wear, how often, and can I obtain them in Nigeria?
What is the full landed cost including duty, clearing and delivery to my site?
Who is this supplier, who else has bought from him here, and what happens when something fails in month seven?
Is operator training included, and in writing?
What does the financing add over the full term, and what happens if the rate moves before I pay?
A supplier who answers all seven clearly is worth more than one who is cheaper and vague.
What to watch once it is running
Overall equipment effectiveness, monthly. Downtime as a percentage of scheduled hours, weekly. Energy consumed per unit produced. Time between failures and time to repair. Scrap rate. Finance cost as a share of revenue.
Six figures, reviewed on a schedule, will show a machine drifting long before the accounts do.
The first ninety days
The habits set immediately after installation determine what the machine costs for the rest of its life.
In the first month, confirm everything runs under full load, train the operators properly rather than briefly, and start a daily log of stoppages and faults from day one. By the second month, have a written preventive maintenance calendar in place and check actual energy consumption against what the supplier claimed. By the third, review the data you have collected, find where the losses are concentrated, and fix the procedures rather than the symptoms.
Hidden costs take months to surface on their own. Ninety days of deliberate attention finds most of them while they are still cheap to correct.
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