• Thursday, May 23, 2024
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Nigerian furniture industry threatened by investor apathy, technology deficiency

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Nigeria’s furniture industry is under threat owing to lack of investor interest as well as technology deficiencies. The captive sector is also bedevilled by unbridled import of sub-standard products, lack of clear-cut sector-driven policy, absence of tools for small-scale operators and poor finance access, among others.

Out of the total investments worth N566.33 billion made in the manufacturing sector in the first half of 2013 (H1 2013), only N231.63 million worth of investments berthed in the furniture (wood and wood products) industry. Similarly, out of N1.43 trillion worth of investments in the second half of the year (H2 2013), only N132 million worth of investments were directed towards this sub-sector, Manufacturers Association of Nigeria’s (MAN) recent data have shown.

This compares poorly with investments in the food, beverage and tobacco industry which totalled N32.52 billion in H1 2013 and N49.95 billion in H2 2013. Pulp and paper industry reported far better investments value of N15.85 billion and N103.06 billion in H1 2013 and H2 2013, respectively. Similarly, the chemical and pharmaceutical industry dwarfed the furniture sub-sector, with N4.54 billion investment value in H1 2013 and N218.77 billion in H2 2013, respectively.

Investments in the furniture industry were also outpaced by the domestic/industrial plastic and rubber’s N39.69 billion in H1 2013 and N125.27 billion in H2 2013. In the basic metal, iron and steel sub-sector, there was total investment value of N143.87 billion in H1 2013 and N922.12 billion in H2 2013, respectively.

Moreover, investments in the furniture industry were bettered by those in the wobbling textile sub-sector, which had N2.72 billion worth of investments in H1 2013 and N2.71 billion in H2 2013, respectively. In fact, the data confirmed that the sector attracted the least investment value among all the sectors within the year.

Apart from ivestments, analysts say many players in the furniture industry still use simple technologies and have low technical know-how and capital input, stressing that a number of small-scale furniture producers are technically inefficient as they fall below efficiency level of 60 percent.

According to the analysts, the implication is that the average furniture producer needs 48 percent cost-saving devices to attain the status of efficiency, while the least furniture producer needs about 88 percent cost-saving devices to be on the same pedestal, adding that most of the small-scale operators in this sub-sector are still more interested in quick profit rather than quality control and expansion.

“Deficiencies in technologies and finance, lack of qualified manpower and their rapid turnover are major problems militating against optimal development of this sub-sector,” said Abimbola Ogunwusi and Olife Ifeyinwa, of the Raw Materials Research and Development Council (RMRDC), in a recent research.

“Thus, technical training is a priority to promote production to international standards and customers requirements,” they suggested.

Industry watchers say the sub-sector needs to be made attractive to beckon interest from large-scale firms and investors, wondering why the industry should be left for firms that import semi-finished products from Europe or Asia.

“Some of these firms tell you they produce here, whereas their products are completely foreign. Of course, this is still good for the market, but there has to be some intervention from the government to make local furniture markers compete effectively,” said an industry player in Lagos, who did not want his name in print.

Stakeholders add that there are other enormous issues that need to be tackled frontally in the sub-sector.

Amechi Asugwuni, president of the National Union of Civil Engineering Construction, Furniture and Wood Workers (NUCEFWW), said the government should ensure that there was adequate security in the forests and put measures to check deforestation as well as the use of casual workers (non-permanent staff), as “it stifles productivity and demeans labour value.”

Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), said the tight credit situation was a major inhibiting factor to the capacity of domestic enterprises to take advantage of the robust Nigerian market, especially the SMEs, stressing that the situation must improve if the country was desirous of seeing significant positives in the real sector.

Experts advise local furniture makers to seek cross-border partnerships just like Sokoa Chair Centre in Lagos, which has strong ties with a French firm. They say such partnerships can enhance the value of their products, quality, prices and even encourage exports to other markets.

Odinaka Anudu