• Sunday, May 19, 2024
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BusinessDay

Closure of ginneries stifling textile industry – stakeholders

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Stakeholders bemoan the continuing closure of ginneries in the Northern part of the country, stressing that it is stifling the few number of textile mills that are still alive in the country.

According to them, ginneries, which are establishments where cotton is ginned, are closing shop in reaction to the state of textile industry, where few existing players have either resorted to skeletal textile production or diverted to customised manufacturing. Hence, it is no more lucrative for ginneries, which produce cotton that are raw materials for textile companies, to remain in business.

Usman Garba Saulawa, director-general, Kaduna Chamber of Commerce and Industry, told Real Sector Watch that the effect of such closure was that the price of cotton was becoming too high in the local market as there were now few suppliers.

“People are no more into cotton production. Only few ginneries are involved in cotton,” he said.

The inability to protect the textile industry has had grave consequences on the industry as players can hardly compete in the international market, while they suffer low patronage and poor financing, among other challenges, Saulawa said.

In a chat with Paul Jaiyeola Olarewaju, director-general, Nigeria Textile Manufacturers Association (NTMAN), earlier told Real Sector Watch that the number of companies producing fabrics was whittling down.

“Those that are really producing fabrics are 10 in number. Most members now produce Baco bags, carpets, rugs, blankets, yarns, among others,” he said.

Some of the surviving firms include African Textile Manufacturers (ATM) Limited, Angel Spinning and Dyeing Limited, and Spinners and Dyers Nigeria Limited, Tofa Textiles Limited, Lakhi Textiles, among five others. Stakeholders say United Nigeria Textiles plc is doing skeletal production, while ATM produces only customised textiles for customers on demand and for specific occasions.

As of 1985, the number of textile firms had risen to 180, while over 1 million Nigerians had been gainfully employed in the sector. Companies like United Nigerian Textile Limited (UNTL), Aswani Textile, Afprint, Asaba Textile Mills, Edo Textile Mills, among others, were at the forefront, while the country’s textile capacity in West Africa was about 60 percent.

Policy somersaults, poor research and development (R&D), lack of competition in the supply of cotton (raw material), smuggling and poor power supply, absence of black oil in the Northern part of the country, among others, dealt a big blow to the industry with an annual market potential of $1.3 billion, say analysts.

The N100 billion Cotton, Textile, and Garment (CTG) Revival Fund was established to assist textile manufacturers with loans at 6 percent interest rate. This is currently managed by the Bank of Industry (BoI) and, according to the bank, over 60 percent has been disbursed.

 

ODINAKA ANUDU