40 manufacturing sub-sectors risk collapse

Unless there are urgent policy interventions by the federal and state governments, 40 sub-sectors in Nigeria’s manufacturing industry may collapse.

While some of these sectors are down and almost out, many others are at their lowest ebb and need urgent policy intervention and direction to stand, BusinessDay research has shown.

Some of these endangered sectors are paints, pharmaceuticals, primary aluminium, ceramics, footwear, rubber, domestic/ industrial plastics, toiletries and cosmetics, chemicals, pulp and paper, glass and foam.

Others are electronics, carpet/rug, fabrication, metering, cordage/rope/twine, boat/ship, steel pipe, welding electrode, galvanised iron sheets, miscellaneous machine and equipment, nail and wire, wood products and horolgicals, among others.

The collapse of these sectors will lead to the loss of millions of jobs and exposes the country to unbridled importation and dumping. It will further put pressure on the already depleting foreign reserves, while creating more socio-economic crises in the nation, experts say.

BusinessDay gathered that while some sectors require inter-regional dialogue to remain alive, some others either need clear-cut policy frameworks or specific interventions to haul them out of danger zone.

Except the Federal Government imposes some tariff on finished imported drugs from other countries, Nigeria’s pharmaceutical industry may go the way of the textile sector.

The ongoing Common External Tariff, which Ghana is yet to implement, places no duty on imported finished medicines, while imposing five to 20 percent tariff on excepients and packaging/ raw materials. Already, pharmaceutical firms are losing contract bids to importers and are planning to sack thousands of staff within three months, as a result of this.

“We are really dying,” Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (PMG-MAN), told BusinessDay.

“Why must we kill a sector that has invested N300 billion and employs one million people?  China closed its economy until it was ready. India and the United States closed their economies until they were ready. Why can’t we do the same here?,” Akpa asked.

Nigeria’s ceramics industry is on the edge, as the few surviving industries are competing unfavourably with importers. The firms are also poorly patronised by Nigerian consumers who have high penchant for foreign products. This has caused some local ceramics companies to falsely brand their products as foreign.

Ceramics include bricks, pipes, clay pipes, floor and roof tiles, table wares, pottery products, spark plugs, sanitary wares, wall tiles and earthenware, plates, among others.

“The ceramics industry is at its lowest ebb,” Patrick Oaikhinan, CEO, Epina Technologies Limited and professor of ceramics engineering, told BusinessDay.

“The raw materials are here. Everything is here, but there is no appropriate strategy in place for the development of this industry that can create an estimated 1.2 million direct and indirect jobs in Nigeria,’’ Oaikhinan said.

Failure to replant old rubber trees has crashed production from well above 130,000 metric tons per annum (tpa) to between 65,000tpa and 60,000tpa. The price of rubber has also fallen by over 50 percent in the international market in the last 18 months.

Consequently, there is yet no hope that the country can have tyre manufacturing companies such as Michelin and Dunlop return in the next ten years, as the conditions that sent them packing still prevail.

Ede Dafinone, CEO, Sapele Integrated Industries, a crumb rubber processor, said import of cheaper ‘Tokunbo’ or second-hand tyres and smuggling, which pushed these to giant makers out of the country, have not yet changed.

Also, footwear makers are struggling to get raw materials such as adhesives and  hides and skins. More than 50,000 of shoe, belt and trunk box makers also say they find it hard to access financing from relevant institutions.

“We sincerely need finance to drive this industry. We also find it difficult to buy skins from the North because they prefer to sell to foreigners and make hard currency,” said Nnabugwu Osondu, secretary, Abia State Shoe, Bag, Belt and Trunk Box Association.

ODINAKA ANUDU