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Cement, paper, metal lead 121% jump in manufacturing output in 12 months

Manufacturing sector output rose 121 percent year-on-year to N483.53 billion in the second half of 2013 (H2 2013) against the N218.64 billion recorded in the corresponding period of 2012, latest data released by the Manufacturers Association of Nigeria (MAN) have shown.

Three key sectors which drove this push include the non-metallic products, the paper and the basic metals sectors.

Output in the non-metallic products sub-sector, comprising cement, ceramics, glass and chalk industries, rose to N215.79 billion in H2 2013, from N8.49 billion recorded in H2 2012. This implies that this sector reported a 2,440 percent spike in 12 months.

Similarly, output in the pulp, paper, printing and publishing sub-sector rose by 386 percent to N18.41 billion in H2 2013, from N3.78 billion recorded in H2 2012.

Furthermore, the basic metal, iron and steel output rose by 196.9 percent to N63.14 billion in the period under review, from N21.26 billion recorded in H1 2012, MAN data show.

MAN attributes the increase in output to the recent multi-purpose uses to which cement is put.

“The preference for ceramic tiles dictates an intensive use of ceramics for housing constructions and beautification. This has pushed up patronage for ceramic products, thereby creating a quantum leap in the industry. Considerable expansion in basic metal industry indicates that the potentials are huge and yet to be tapped,” says MAN while explaining the reason for the surge in the industries.

There was also a significant rise of 56.45 percent in output among players in the food, beverage and tobacco sub-sector. Output rose to N83.72 billion in H2 2013, from N53.51 billion posted in H2 2012.

Another sector that reported an appreciable increase was the electrical/electronics sector whose output was ramped up by 101.1 percent to N9.07 billion in H2 2013, from N4.51 billion posted in H2 2012.

However, the pharmaceutical and chemical industry reported a 28.51 percent drop in output in H2 2013, falling from N30.26 billion in H2 2012 to N21.63 percent in H2 2013.

Nnamdi Okafor, managing director/chief executive officer, May&Baker, while explaining the drop in output in the industry in Lagos yesterday, said, “You must know that between 98 and 99 percent of raw materials we use in the pharmaceutical industry is imported. By the time you finish manufacturing in Nigeria, you are already 40 percent at a disadvantage, considering the power cost and other challenges.”      

But the pharmaceutical and chemical sub-sector recorded a rise in others areas such as capacity utilisation and investment.

Capacity utilisation rose to 53.6 percent in H2 2013 as against 52 percent in H2 2012. Investments in the sector rose significantly to N218.76 billion in the same period, from N4.53 billion posted in H2 2012.

The chemical and pharmaceuticals sub-sector grew by 38.5 percent in the second quarter (Q2) of 2014, according to the National Bureau of Statistics (NBS).

Nigeria’s manufacturing sector has continued to drive the economy which grew to 6.54 percent in Q2 2014, as against 6.21 percent growth posted in Q1. Capacity utilisation rose to 53 percent by H2 2013 as against 47 percent in H2 2012. About 59 percent of raw materials are sourced locally, while unplanned inventory of finished products fell from N33.17 billion in H2 2012 to N17.34 billion in H2 2013.

“We are an economy of traders not manufacturers, a nation of importers of finished goods. When will the power sector come to our aid, the manufacturers?” asked Babatunde Odunayo, immediate past CEO, Honeywell Flour Mills plc, and currently chairman of MAN, Apapa branch, while speaking on the greatest problem faced by manufacturers at a luncheon in Lagos.