Wemy Industries Limited plans to export diapers to West African countries to earn foreign exchange. The firm urges the government to provide incentives in the form of tax holidays and import restrictions on cheap but inferior items to save few existing firms
“We intend to export to ECOWAS countries,” Paul Odunaiya, managing director, Wemy Industries, told BusinessDay in an interview.
Wemy Industries, founded in 1978, is a manufacturer of adult, feminine and baby diapers, sold under Dr Brown’s and Nightingale brand names. The company was hard hit by recession of 2016, as it was heavily exposed to foreign exchange risks, being an importer of raw materials and finished products.
But opportunities exist in the industry as seven million children are born each year, according to the United Nations International Children’s Emergency Fund (UNICEF). Data from the National Population Commission in 2015 said there were 32 million under-five children born in Nigeria that year, which could potentially rise to 58 million in 2050.
However, Odunaiya said in the face of economic realities, government needs to provide incentives to save the industry.
“We still have a low penetration rate in the industry,” Odunaiya of Wemy said.
“There is multiplicity and duplication of functions by government agencies which needs to stop.”
“Players need to be encouraged,” he added.
The diaper industry was once dominated by Procter &Gamble’s Pampers, manufactured in its Ibadan and Agbara plant. P&G shut down its $300 million Agbara plant in July 2018 and insiders told BusinessDay that the company is now importing pampers. Until July 2018, it had been the biggest US non-oil investment in Nigeria. Sources close to the company told BusinessDay that the company faced multiple taxation and harsh treatment in the hands of Nigeria Customs Service, which regularly acts as a revenue earner rather than a business facilitator.
Industry sources say today’s industry leader is the Agbara, Ogun State-based Hayat Kimya, which makes Molifix, preferred by a number of mothers.
The Lagos-based Kimberly Clark is also a key player, producing Huggies, which is also a major brand. But insiders told BusinessDay that the company is leaving Nigeria.
The insiders said the company would leave Nigeria and return in 18 to 24 months.
“There are many substandard diapers flooding the Nigerian market. They pack them in white bails, sell them to Nigerian merchants at ridiculously low prices and bring them into this market. What we need is to stop this kind of products from coming into this market because they cause rashes and infections and there could be leakages because they are not of good quality,” Wemy MD added.
It was a facility from the Bank of Industry (BoI) that resurrected the company. The development finance institution provided funds for Wemy at a critical stage when it was struggling to survive.
“We have been able to deploy the funds into our business. The impact of the BoI intervention fund and the investment we got from BoI will come to light this year. We have started seeing some impact on baby diapers. Remember, we are the pioneers of baby diapers in Nigeria. We started in 1979. The future of Wemy Industries is better today than it was in 2015. We are also bringing in an adult diaper machine so we are going to be pioneer adult diaper manufacturer whereby we are going to service the Nigerian market and that of the whole West Africa by exploring these regions. We are also the pioneers of baby wipes in Nigeria,” he stated.
ODINAKA ANUDU
