• Thursday, May 30, 2024
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BusinessDay

Indorama’s polymer resins saves 350 Nigerian plastic firms from imports

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At least, 350 Nigerian companies in the plastics, automobiles and allied industries have stopped importation of polymer resins for their factories, and now depend largely on Port Harcourt-based Indorama Eleme Petrochemicals Limited (IEPL) for their raw materials.

Two major components of the polymer resins used in the manufacture of plastic products are polyethylene (PE) and polypropylene (PP).

Before the 2006 privatisation of the then Eleme Petrochemicals Company Limited (EPCL), Port Harcourt, most Nigerian companies imported more than 85 percent of their needs for petrochemical products because the former Federal Government-owned multi-billion naira EPCL operated in fits-and-starts, and could hardly produce to meet domestic demands.

The Raw Materials Research and Development Council (RMRDC) says presently, over 350 companies are operating in the plastics sub-sector in Nigeria, with Indorama Eleme Petrochemicals Company (IEPL) being the largest and sole producer of the major industrial PE and PP.

“This indeed is a significant contributor to the Gross Domestic Product (GDP), which needs protection from foreign competition,” says RMRDC.

The RMRDC, in a survey it jointly carried out with the Association Plastics Manufacturers in Nigeria (APMIN), an arm of the Manufacturers Association of Nigeria (MAN), reports that current domestic consumptions of PE and PP are 9,273 tons/month and 16,179 tons/month, respectively, excluding imports.

Whereas, monthly production figures from the Indorama Eleme Petrochemicals Limited (IEPL) are 30,000 tons/month for polyethylene and 5,500 – 6,000 tons/month for polypropylene.

Meanwhile, the Nigerian Foreign Trade Summary (NFTS) report (2008) of the National Bureau of Statistics (NBS) puts the overall export value of plastics and articles at about N67 billion, corresponding to about 231 million kilograms annually.

The Raw Materials Council says its recent collaboration with the MAN saw the emergence of APMIN as one body with Indorama Eleme Petrochemicals Company Limited (IEPL), which is a major breakthrough for the sector.

“This alliance led to increase in total annual production of polyethylene and polypropylene from 205,000 metric tons (mt) in 2008 to 330,000 mt in 2009, in the company’s drive to satisfy the local market and meet some of her export commitments.”

The collaboration also set up a Demand and Supply Monitoring Committee to harmonise indigenous supply of polyethylene and polypropylene with demand in 2010.

The Raw Materials Council said it was observed that IEPL’s polyethylene production is far in advance of national consumption and polypropylene is far below the consumption rate, which is attributed to shortfall in feedstock supply.

Despite the huge quantity of PE exported out of the country, import value of PE is still high – about N35 billion corresponding to 142 million kilograms annually and value of PP imports is about N30 billion corresponding to 129 million kilograms, said the National Bureau of Statistics.

But IEPL says it had been exporting its surplus production, which earned it a 2010 presidential award for export.

The company, in the October 2014 edition of its in-house Impact Magazine, said it is now maintaining “a new marketing policy of satisfying all domestic demands before any consideration for the export market.”

To this end, the firm said, apart from its main warehouse in Port Harcourt, it maintains warehouses in Lagos and Kano, which ensure that all parts of the country are fully serviced through direct marketing, with no middle men required.

In 2012, the petrochemicals company commissioned its new PET reins plant built onside the existing complex. PET reins are used by bottling companies for water, beverages, beer, fruit juices and pharmaceuticals containers.

Indorama-EPL is the nation’s excellent model of public private partnership (PPP), in which its shares are owned by the core investor (Indorama) – 65 percent; the Federal Government through the Bureau of Public Enterprises (BPE), 5 percent; Nigerian National Petroleum Corporation (NNPC) – 10 percent; Rivers State government, 10 percent; the six host communities, 7.5 percent, and the employees, 2.5 percent.

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