Amid economic turbulence, shining spot industries make export progress

Amid economic recession that has hit Nigeria, shining spot industries are making significant progress in export business, repatriating foreign exchange into a country going through its worst FX scarcity.

These industries gain momentum on the back of local raw materials sourcing, which enables them to stay afloat in an economy where over 50 manufacturers have shut down operations in the last 14 months, owing to FX issues.
In spite of lack of support, Fata Tanning Limited exports leather shoes and bags to several markets, including West Africa. The Kano-based firm is well known for sourcing animal skins from local farmers in the north. The animal skins are processed, sold as leather or finished shoes in Europe, the Americas and China. The company brought in $38 million into Nigeria in 2015 through export, and promises to bring in more with more government support.
West African Tannery Company Limited is also well known for sourcing animal skins with which to produce leather and shoes for export. This year, the company is gaining momentum in African and European market, helping to shore up the foreign reserves.
“Nigeria shares over 70 percent of the West African market,” said Tunde Oyelola, chairman,Manufacturers Association of Nigeria Export Group.
“We export leather, shoes, bathroom slippers and many others. We can do more if the government prioritises export,” said Oyelola.
John Tudy Interbiz processes locally made foods and snacks, packages them for export to the United States.
John Kachukwu, CEO of John Tudy Iterbiz, told BusinessDay that his company packages foods to the US and brings in significant revenue into the country.
“But now, the economic situation is affecting us,” Kachikwu said.
“This is why we need clarity in the economy and resuscitation of the Export Expansion Grant,” he added.
Nassos Sidirofagis, deputy managing director, Tempo Paper Pulp & Packaging Ltd, producer of packaging materials, said it exports packaging materials to West Africa.
According to him, the inward-looking policy initiated by the Federal Government has seen many firms buy packaging materials from the company. “We have been able to increase our production capacity from 50 percent to 70 percent.The demand for our products has suddenly increased. We have also raised our export volumes to repatriate foreign exchange into the economy,” Sidirofagis said.
Olam is a major exporter of foods to Africa, Europe and the Americas. The foods maker is known for high quality food and packaging, which enabled it to bring in $88 million in 2015. The company sources most of its raw materials locally, as it has been in the forefront of backward integration policy.
Ade Adefeko, head of corporate affairs and government relations for Olam, said the Export Expansion Grant is needed at a time the country is going through FX scarcity.
Last month, Flour Mills concluded the registration of its Daily Delight and Semolina in the ECOWAS Trade Liberalisation Scheme (ETLS).
The ETLS is a necessary registration that enables products to be moved from one ECOWAS country to another without payment of duties/tariffs. Registration in the ETLS means that the product is ready for export.
Flour Mills has registered its Rom Oil, Spread and Margarine brands for export, while another subsidiary Northern Flour Mills, has enrolled Massa Flour and Massavita for export.
Guinness Nigeria plc has enrolled its Orijin drink for export into the regional market, just as Mamuda and Nasco registered new sacks and biscuit brands respectively for export.
Erisco Foods Limited is hoping to join the new crop of exporters, having registered its tin tomatoes in the ETLS.
“We will begin to export tomato pastes in 2017,” Eric Umeofia, CEO, Erisco Foods, which sources its fresh tomatoes from local farmers.
“We are investing $150 million and hope to hit one million tonnes in Katsina,” Umeofia said.
Royal Mills and Foods Limited, has also expanded outside the Nigerian shores with its noodles and spaghetti, while Mapleleaf Press is now in the ECOWAS market with some of its exercise and textbooks.
“Indeed many manufacturers are looking into the export market,” Ede Dafinone, CEO, Sapele Integrated Industries, a crumb rubber exporter, told BusinessDay recently.
“Importers are recognising that dollars will be scarce for a long time to come. You can imagine a situation where a manufacturer cannot source enough FX to import. So it is a logical progression for a manufacturer to look to export. I know a lot of them that are moving into this space,” Dafinone said.