Nigeria’s weak automotive and battery industries are preventing it from tapping into $17.56 billion graphite market, BusinessDay has gathered.
A new market research report, entitled ‘Global Market Study on Graphite: Battery Segment to Witness Highest Growth by 2020,’ published by Persistence Market Research, values the global graphite market at $13.62 billion in 2013 while anticipating growth to $17.56 billion between 2014 and 2020 (at a compound annual growth rate of 3.7%).
The market is expected to hit 4.48 million tons in terms of volume between 2014 and 2020.
Graphite is an important material used in making car batteries, gaskets, clutch materials, motors, exhaust systems, and cylinder heads. It is also an important element in the manufacture of ultra-lightweight carbon-fibre reinforced plastic (CFRP).
But the country’s weak battery industry and a struggling automotive sub-sector mean the country is not tapping into growth potential in graphite. The auto policy has not taken deeper roots as no component maker has yet set up a full-fledged factory in the country.
“Nigeria is not there yet in terms of car component making,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), in a breakfast meeting late 2014 held in Lagos.
Remi Bello, president, LCCI, had earlier argued before the introduction of automotive policy that the industry does not have local value addition and capacity for backward integration as of then.
“There must be ancillary industries for the production of batteries, glass, radiators and tyres. There must also be affordable finance for the investors, because development of the sector would not thrive in an environment where the cost of fund is between 25 and 35 percent,’’ Bello had said.
Increasing the use of graphite in the automotive and battery industries is the major factor driving the demand for graphite, according to Persistence Market Research. Asia-Pacific is the largest market for graphite globally. Rise of technologically advanced applications of graphite in pebble-bed nuclear reactors, fuel cells, solar power systems, and automotive and aerospace industries is driving the graphite market in the Asia Pacific region.
“China and India are the major markets for graphite in the region. Rising demand for steel and other metals has increased the demand for graphite electrodes in Asia Pacific,” the report says.
According to China’s Twelfth Five-Year Plan, the government plans to have around 5.0 million battery-electric vehicles plying on the roads by 2020. This is expected to increase demand for graphite in the Asia Pacific market during the forecast period, analysts say.
In terms of revenue, the global graphite market grew from $12.30 billion in 2010 to $13.62 billion in 2013 at a CAGR of 3.4 percent. In terms of volume, the global graphite market grew from 2.19 million tons in 2010 to 2.68 million tons in 2013 at a CAGR of 7.1 percent. Under regional segment, the Asia Pacific graphite market (the largest market in 2013) increased by 3.8 percent CAGR during 2010–2013 to reach $9.17 billion in 2013.
Major companies operating in the global graphite market are Triton Minerals Limited, Lamboo Resources Limited, Mason Graphite, Focus Graphite Inc. and Energizer Resources Inc. Others are Northern Graphite Corporation, Alabama Graphite Corp., Flinders Resources Limited, Syrah Resources Limited, SGL Carbon SE, GrafTech International Holdings Inc, Graphite India Limited, Nippon Graphite Industries, Co., Ltd., Asbury Graphite Mills, Inc, Showa Denko K.K., and Tokai Carbon Company Limited. None of these firms is Nigerian.
ODINAKA ANUDU
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