• Tuesday, May 21, 2024
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Seven companies that shut down over worsening economy

Ten companies that shutdown over worsening economy

Many manufacturing companies have halted their operations in Nigeria in the last 10 years over worsening macroeconomic challenges.

Lingering foreign exchange scarcity, poor power supply, port congestion, multiple taxation, insecurity, and poor infrastructure, among others have taken a toll on many businesses in the country.

High energy costs, a slowdown in industrial output, and a sluggish demand for products are also among the issues debilitating manufacturing activities in Nigeria.

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Some of the manufacturing companies that have exited the sector in the last 10 years include:

Mayor Biscuits Company Limited

Mayor Biscuits Company Limited (MABISCO), an indigenous biscuits company in Ogun State, Nigeria, shut down this year.

“We want to sell MABISCO because we want to concentrate on our area of core competence of business,’ the company said in a statement last week, adding that “to achieve that, we have to divest appropriately.”

Prior to shutting down operations in March 2023, MABISCO, situated in Agbara Industrial Zone, Ogun State had inaugurated over 300 established distributors nationwide in seven years.

Established in 2016, MABISCO, with the state-of-the-art biscuits manufacturing technologies, has a total capacity of 3.5tonnes per hour with access to Shell LNG Gas terminal. The plant has packing machines that have the capacity to do 350 packs per minute, the statement said.

Louis Carter Industries

In 2017, Louis Carter Industries shut down operations, forcing its over 40 staff members to rejoin an already crowded labour market.

Louis Carter, established in 1989 in Nnewi, Anambra State, battled with ballooning production costs, FX crunch, policy flip-flops, and high energy costs.

The company produced plastic gallons, basins, and other plastic products.

Moak Enterprises

Once one of the biggest bottled/sachet water companies in Sango-Ota, Ogun State, Moak Enterprises closed down in 2021.

Its product, ‘Meridian Waters,’ was consumed by many. Moak produced several trucks of sachet water each month and supplied it to wholesalers and retailers in Ogun State and beyond.

Moak was also one of the companies affected by the FX crisis as it shut down due to the increased cost of its raw materials.

Tower Aluminium

Aluminium was set up in Nigeria in 1959 and served several homes in the country and West Africa with aluminum products including pots, plates, spoons, and roofing sheets. It shut down operations in 2020.

GlaxoSmithKline Nigeria

Continued manufacturing became unsustainable for GSK and it decided to shut down its drug production plant at Agbara, Ogun State in 2021. The company moved into contract manufacturing arrangements with Fidson Healthcare, another local manufacturer.

In August this year, GSK, a British multinational pharmaceutical and biotechnology company, announced plans to exit Nigeria, after 51 years of operation in the country. It said GSK UK Group has informed GlaxoSmithKline Consumer Nigeria Plc of its strategic intent to cease commercialisation of its prescription medicines and vaccines in Nigeria through the GSK local operating companies and transition to a third-party direct distribution model for its pharmaceutical products

Technoflex Company Limited

Technoflex was a player in the industrial plastic and foam sub-sector. The company was shut down in 2017 due to rising production costs.

Evans Medicals

Evans Medicals was once one of the largest pharmaceutical companies in Nigeria but lost its assets due to debt.

It had procured machines and upgraded its production facilities to ensure it achieved the World Health Organization’s prequalification that would enable it to compete in international contract rounds.

In 2017, a court ordered that the drug maker’s assets be taken over by First Bank and the now-defunct Skye Bank due to bad debt. This ended Evans’ dreams.
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This company had performed optimally until funding problems started. It was forced to borrow from the now-defunct Skye Bank to stay afloat, but that decision turned out to become its Achilles heel.

The Asset Management Corporation of Nigeria eventually took over the business, but the company’s productivity fell drastically.

Other companies that have shut down include Surest Foam Limited, Mufex, Framan Industries, Deli Foods, Stone Industries, and MZM Continental.