…Says Nigeria can surpass China in production

The Managing Director, Mallinson & Partners Ltd, Mr. Afam Mallinson Ukatu, has blamed Nigerian governments for the near comatose condition of manufacturing industry in Nigeria.
Speaking during the opening of the First Buildingmart @mallinson recently in Lagos, Ukatu said poor power supply has hindered the efforts of manufacturers to compete favourably with foreign producers.
He said government should encourage manufacturers, adding that it should stop charging gas in foreign currency since it is used for manufacturing in Nigeria.
He also queried the rationale for paying gas bills to power generators for manufacturing in Nigeria in US dollars, saying, “there is no place in the world this is done except in Nigeria. That is the issue.”
While giving insight on the competition posed by foreign products, Ukatu said, “the benchmark is something good to monitor the quality of goods. It does not have to do with locally produced goods in Nigeria because if we have what it takes, all the goods manufactured abroad will be produced here in Nigeria. In those days, we were expecting to have goods made in Nigeria by Nigerians not goods made by Indians. That was what we expected to have. It has happened in China those years where all the goods in China were manufactured by Taiwanees but in today’s market, it is goods made in China by Chinese and that is what we want to do in Nigeria. It will come to pass if there is improvement in electricity generation.”
He stated further that, “our aim is to have a one-stop-shop for all building materials. We are trading online. In this regard, you get to our site and in the comfort zone of your house, you can order for any material and you will have them sold and delivered to you.
Currently, we have our manufacturing company in Agbara, Ogun State and we intend to open other branches in Lekki and Ajah in the first quarter of next year.


How power supply’s frustrating manufacturers of building materials

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Poor power supply has been described as the bane of Nigeria’s manufacturing sector, considering that the challenge has forced most manufacturing industries in the country to relocate to neighbouring countries where power supply is stable. This situation has continued to raise the cost of doing business as well as that of building materials.
Nigeria is blessed with abundant raw materials that could be processed to serve the construction industry but lack of power to run the millers and other heavy duty machines has left the sector comatose for decades.
Over the past 10 years, there has been a dramatic increase in the cost of building materials in Nigeria and this development threatens the performance of the construction industry. There is, therefore, a dire need for objective assessment of the implications of the rising cost of building materials in Nigeria with Lagos as pilot. Lagos as a macrocosm of Nigeria can sum up the feelings of all microcosm in the country. So most respondents were in tandem with the fact that what is felt in Lagos could be felt in Enugu, Onitsha, Kaduna, Zamfara, Edo or Borno states.
According to Mr. Mike Ojide, if there is stable power supply, there will be an avalanche of cottage industries manufacturing building materials like paints, tiles, cement, industrial blocks, roofing sheets of various kinds and irons. Ojide said that these, among other things, are areas an amateur engineer could try his hands on and within a short while, perfect the art of manufacturing these materials.
Going by their economic effects, the most rated factors responsible for the rising cost of building materials are the exchange rate of the naira where we have Mean Rated Average (MRA) at 4.4; cost of fuel and power supply, MRA at 4.3; changes in government policies and legislation, MRA at 4.2; fluctuations in the construction cost with MRA at 2.8; reduced volume of construction output, MRA at 2.52, while risk of project abandonment, MRA stands at 2.51.
According to Afam Mallinson Ukatu, Managing Director, Mallinson & Partners Ltd, a company that manufactures iron rods and other steel products, hardboard, paper products, tiles, granite, metal and non-metal minerals, plywood and stone roofing tiles, government should encourage manufacturers.
“They should stop charging gas in foreign currency because we are the ones using this gas for manufacturing. It is horrible that we are paying gas bills to power our generators in US dollars in Nigeria. There is no place in the world this is done except in Nigeria. That is the issue. Our prices have gone up because dollar has gone up locally. Our prices have increased by up to 25 to 30 per cent of production cost. We don’t have 24 hours or 30 days gas supply. For the past four months, our production has gone down by 70 per cent because of blow up of gas pipelines and others. This has caused a lot of havoc to manufacturing industries,” he said.
Reacting to the power supply situation in the country, the Manufacturers Association of Nigeria (MAN) lamented that member companies, in the past three years, spent about N20.8 billion monthly on power generation to run production process.
MAN President, Frank Jacobs, said the ripple effects of incessant pow­er shortages are numerous,including production cuts, job loss to outright closure or relocation to other countries by industries, adding that companies have had to bear so much loss as the outage often occurs when goods are in the middle of production.
He said, “when you are pro­ducing and power is taken unannounced, goods in line of produc­tion would be destroyed.” As a result of this, Jacobs said many members of MAN have resorted to generating power privately and completely cut off their operations from the national grid.
“Most companies, like Coca-cola, Wampco, Nigeria Flour Mills and especially the multi-na­tionals self-generate their power; they don’t rely on the national grid. And for the last three years, our study shows that our mem­bers spent an average of N20.8 billion per month. In this wise, any company not capable of generating its own power is tactically out of business,” he said.
Corroborating this, the Direc­tor General of the Nigeria Employers Consultative Association (NECA), Mr. Segun Oshinowo, said generating alternative power to run the manufacturing sector is expensive and invariably increas­es the cost of production.
Oshinowo said as Nigerian companies operate in the global market, the consequence of in­curring high cost on power generation would make the nation’s industries less competitive.
He said, “the products our companies would be churning out would be compet­ing with others coming from abroad whose countries have good infrastructure. Definitely, the prices of those products com­ing from outside will be cheaper, while ours will be higher and less competitive due to cost of production. The same goes for companies exporting their products. Their products will still be less com­petitive and it’s really a serious problem.”
In his contribution, the Director Gen­eral, Lagos Chamber of Com­merce and Industry (LCCI), Mr. Muda Yusuf, said members of the Chamber, including multi-nation­al or Medium, Small or Micro Entrepreneurs (MSMEs), have all resorted to alternative sources of energy, ranging from gas, diesel or PMS, which he said is affect­ing their cost of operation and overall effectiveness.
According to him, “some of the big companies have completely cut off from the national grid to private gas supply as means of providing power for their operations. This is be­cause some of their operations and productions cannot work with the epileptic power we are experiencing in the country. All the multinationals are generat­ing their power themselves right now.”
Yusuf said although some of the companies still manage to oper­ate on public electricity, they have to revert to diesel to power their generators any­ time there is an outage, which he said is more expensive.

Fashola