Stories by Adewale Sanyaolu
dESPITE having a large, growing and sustainable market for polypropylene sacks,the
comatose state of the petrochemical industry in Nigeria may have made the realisation of the full potentials impossible.
The development is not only a national embarrassment for the country but also an economic loss as failure to develop the petrochemical plants is costing Nigeria over $10 billion ( about N3.6 trillion yearly at an exchange rate of N360 to a dollar). This figure was N2 trillion in February 2016 when the exchange rate was N200 to a dollar.
More worrisome is the fact that these opportunities are being hampered through revenue loss as majority of the manufacturing companies now import about 80 per cent of their raw materials.
All the foam, plastic, paint and textile companies in the country depend on derivatives most of which are imported because the local petrochemical industry has not received due attention.
Products made from petrochemicals include plastics, soaps, detergents, solvents (such as paint thinners), paints, drugs, fertiliser, pesticides, explosives, synthetic fibres and rubbers, and flooring and insulating materials. They are also found in such common products as aspirin, cars, clothing, compact discs, video tapes, electronic equipment, and furniture.
Need for a petrochemical plant
The inability of the Nigerian government to utilise its refineries to full capacity has led to the abysmal deterioration of the petrochemicals industry, making the country to lose about N3.6 trillion annually in revenue.
The significance of a vibrant petrochemical industry to an economy with daily crude consumption of about 445,000 barrels but still largely dependent on product exports cannot be over-emphasised. For Nigeria, the petrochemicals industry, a sub-sector of the petroleum industry, occupies a key place in the world economy as it produces the crucial raw materials from petroleum, including kerosene, liquefied natural gas (LPG), diesel, ethane, plastic, rubber, yarn and other intermediary goods consumed across the world.
The failure of government to harness these resources has left many companies that should depend on raw materials from domestic petrochemicals firms in comatose state, while those struggling to survive are doing so at a huge cost in the face of the nation’s dwindling foreign exchange in-flow.
That explains why demand for petrochemicals products is driving activities in the end-user segments, which include a well-developed manufacturing sector that provides a ready market for end-products of the industry.
For Nigeria, the challenge has not been the lack of investment but that even a firm like Indorama Eleme Petrochemical Limited (IEPL) located in Port Harcourt, Rivers State, has remained a lone ranger in Nigeria’s petrochemical industry.
As at 2013, the firm had an annual installed capacity of 300,000 metric tonnes of ole-fins, 250,000 metric tonnes of polyethylene and 80,000 metric tonnes of polypropylene, which are high value raw materials that could earn the country so much in reserve if exported.
Even the Warri and Kaduna refineries that ought to provide the much-needed leap for the country’s petrochemicals indus-try appear to have failed to pro-duce products that will meet the yearning of their stakeholders.
For instance, at inception, the two refineries were designed to produce Carbon Black and Linear Alkyl Benzene (LAB) used in the manufacture of deter-gents. But this capacity has also been affected by the low crude oil refining capacity in both firms.
Observers have often lamented that despite the country’s large deposits, it still depends on imports of petrochemical products for raw materials for its manufacturing companies. It is estimated that Nigeria utilises less than 40 per cent of capacity utilisation, which results in lower petrochemicals yields, thereby creating a need to augment with imported raw materials.
Petrochemical products like olefins (ethylene, propylene, bu-tadiene) and aromatics (benzene, toluene, xylene) are used in end-user markets such as paints, plas-tics, explosives and fertilisers sub-sectors.
That explains why demand for petrochemicals products is driving activities in the end-user segments including a well-developed manufacturing sector, which provides a ready market for end products of the industry.
Opportunities in polypropylene
According to Research and Markets, the global production of polypropylene was 56.44 million metric tonnes (MMT ) in 2016 and is estimated to reach 75.72MMT by 2022. On the other hand, in terms of demand, the market was $ 105.46 billion in 2016 and would reach $151.38 billion by 2022 growing at a rate of 6.21 per cent compounded annually.
Older packaging methods like multi-ply paper sacks, cotton bags and jute bags, among others, had been used to cart awaystorage of agricultural produce and industrial products. Due to the inadequacy of these packaging methods to withstand various atmospheric conditions, much of the produce spoil, to the financial loss and frustration of farmers and producers.
A heavy loss occurs to the economy through the non-utilisation of the available agro-based raw materials inputs, great fluctuation in prices of food stuff and industrial products, etc., is the result.
Polypropylene sacks are suitable for almost all the products that have used paper sacks, cotton bags and jute bags for packaging. These sacks are better suited for storage due to their strength, durability and ability to withstand water and pests.
The use of polypropylene sacks is steadily increasing in the agricultural and manufacturing sector, with increasing agricultural yields and related industries, the scope of the industry is increasing.
Synthetic woven sacks made from HDPE or PP are one of the bulk packaging materials. These sacks are presently being used for packaging of bulk commodities like cement, fertilisers and some other applications like sugar, salt, chemicals, wheat flour, starch, poultry products, bulk drugs, among others.
They are are immune to the effect of corrosion, decay, moisture, atmosphere, rats, rodents, moths and insects. Being superior in quality and economic as compared to the traditional jute material, these modern sacks have gradually captured a large market.
Raw materials needed for woven sacks
•Extrusion tape lines for raffia tape manufacture; circular weaving machines; laminating machines; cutting machines; stiching machines and printing machines.