Nigeria Production Value, Manufacturers hit N870bn mark

The cement, metals and foods sectors contributed 87 percent to Nigerian manufacturers’ production value which stood at N870 billion in 2014.

The total production value in 2014 surpasses that of the preceding year, which was N836.73 billion.

The cement industry, classified under the non-metallic products sector, pushed N351.87 billion worth of products into the Nigerian and West African markets within the year. But this was lower than the 2013 figure of N359.66 billion.

 

The cement industry is driven by a housing deficit of about 18 million units, infrastructure gap and rising rural-urban migration.

The decline in the production value in the industry may be attributed to the cement grades war which affected most players. Another drawback to the industry has been insecurity in the north-east which intermittently shut down Ashaka Cement’s plant in Gombe State.

“It is very challenging. But we see this as a tremendous opportunity for investment and we are delighted to see that the president has made the North-East his focus and priority for himself, starting with the improvement of the security situation.

“ That is something you will agree with me is key as an absolute precursor to investment,” said Peter Hoddinott, Lafarge Africa’s area manager for Nigeria  and West Africa, recently.

The basic metal, iron and steel group put out goods worth N211.26 billion as against N111.71 billion in 2013.

Similarly, the food, beverage and tobacco group churned out goods valued at N192.70 billion in 2014,  different from N148.12 billion worth of goods in the preceding year.

This sector saw innovations, expansion and new entrants in 2014. Flour Mills, Dangote, McNichols expanded sugar plantations and production, while Nigerian Breweries and Guinness innovated new value brands. SABMiller invested $110 million in its production capacity in Onitsha, as Union Dicon Salt went into cassava starch.

Most of the successful expansion projects in the group could be attributed to agro-allied policies like backward integration and local content which enhanced productivity in the industry.

Santosh Pillai, managing director, PZ Wilmar for West Africa recently said in a bid to produce vegetable oil, the firm has acquired 26,500 hectares, adding that with more land available, the company will soon do 50,000 hectares.

The chemical and pharmaceutical sector produced goods worth N36.61 billion within the period under review. But this was less than N38.26 billion worth of goods made by players in the sector in the preceding year.

The sector is stifled by non-availability of a functional petrochemical industry where raw materials could be derived.

Productivity in the sector is also hindered by foreign exchange volatility, as most raw materials in the industry remain imported.

“The pharmaceutical industry is already facing a lot of challenges. The industry needs to be protected,” said Okey Akpa, chairman, Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), said.

In an industrial blueprint, Frank Jacobs, president, MAN, said absence of core industries such as steel complexes and petrochemicals are stifling productivity in many areas of the manufacturing sector.

“The petrochemical industry has the potential of spin-offs that would enlarge the industrial base of the country. Despite the huge market that exists for petrochemical-based products in the country, investment in the industry has been limited,” said Jacobs.

The domestic and industrial plastic/ rubber sector produced goods worth only N25.93 billion. But this was insignificant compared with the N80.35 billion value delivered in the previous year.

Apart from increase in tariff for imported raw materials used by plastic makers, prices of rubber in the international market nose-dived.  Prices which were above $4,000 per ton the previous year, hovered between $1,970 and $1,700 per ton in 2014.

Sunday Kolawole, president, National Rubber Association of Nigeria, told BusinessDay that rubber plantations across the country have ageing trees which need to be replaced, and that rubber processors and players are having a hard time because the fresh crop has a gestation period of between six and seven years.

 ODINAKA ANUDU