• Sunday, March 03, 2024
businessday logo


Manufacturers cut costs by 25% with switch from diesel to gas

Manufacturers cut costs by 25% with switch from diesel to gas

Polyfilm Packaging Nigeria Limited, a manufacturer of flexible packaging focused on the food and consumer sectors, has recorded over 25 percent savings in energy costs after switching from diesel to gas, at a time when rising diesel prices are forcing businesses to adopt gas as an alternative fuel.

Vikram Gursahaney, co-founder and executive director at the Ibadan-based firm, said the company was spending nearly half its operating costs on buying diesel and maintaining equipment, which proved unsustainable as diesel prices hit the roof.

Manufacturing includes addressing daily operational challenges encompassing various facets of the business, particularly energy costs that have become burdensome for industries.

“Energy costs have risen significantly in the manufacturing industry and can contribute up to 50% of your operational expense, followed by labour and other overheads.”

Read also: Rising diesel, jet fuel costs spell trouble for Nigerian industries and airlines

The company started operations in 2008 as a privately held business established by the family, who first settled in Nigeria in the I970’s. The business searched for alternative energy solutions for two years before eventually turning to Clarke Energy’s range of gas plants.

But there was another challenge: there was no pipeline that brought gas to Ibadan. So when Polyfilm settled on the first engine it bought from Clarke Energy — a 1 MW containerised gas engine — it entered a deal with a gas supplier to supply compressed natural gas (CNG) to the plant.

“Although CNG is expensive it is inevitably more economical than running on diesel,” said Gursahaney. He added, “Since we made the first purchase years ago, we have expanded the plant’s capacity in line with the company’s expansion plans and now run primarily on gas.”

Speaking on the services provided by Clarke Energy, Gursahaney said, ” They have a very responsive after-sales team available to attend to us when we call. We have realised a substantial increase in value, specifically in terms of the energy yield measured in kilowatt-hours per standard cubic meter of gas. Furthermore, since we do not have access to piped gas yet, which is cheaper than compressed natural gas, it is imperative to consider a very efficient engine to compensate for the difference in cost.”

Clarke Energy designed the entire power solution from front-end engineering design, engine delivery, installation, commissioning, and equipment maintenance over the life of the asset.

Yiannis Tsantilas, the Managing Director of Clarke Energy in Nigeria, expressed, “The partnership with Polyfilm Packaging Nigeria Limited aligns with Clarke Energy’s drive to extend value to manufacturers in regions further away from the piped gas network but can access bottled gas, in this case, the ancient city of Ibadan, in the south-western region of Nigeria”.

Packaging remains a critical process in finishing food and consumer products that are part of our daily lives, directly impacting the global supply chain, food sustainability and human health, requiring a focus on quality, durability, and safety. Polyfilm has continued to meet this demand as it expands its investments and adopts backward integration in Nigeria through its extraordinary leadership and commitment to delivering value to Nigerians.

Read also: Dangote Refinery to start with Diesel, JetA1 in January

The power plant solution supplied to Polyfilm Packaging Nigeria Limited has helped the business remain competitive and reduce its carbon footprint on its journey towards environmental sustainability.”

“Apart from the cost savings, the gas engine exhaust emissions are significantly lower when compared with diesel generators. In addition, the diesel generators require maintenance every 250 run hours, while the INNIO Jenbacher engine purchased from Clarke Energy requires maintenance every 3,000 run hours, helping to improve the plant’s availability to power our operations,” said Gursahaney.