Nigeria sees new factories emerge as economy rebounds
by ODINAKA ANUDU
December 11, 2017 | 1:30 am| | | Start Conversation
Gradual economic rebound in Nigeria is bringing with it the emergence of new factories as Africa’s most populous country seeks to diversify away from oil and minerals.
The Nigerian economy exited recession in the second quarter of 2017 after suffering contraction for five consecutive quarters. The gross domestic product (GDP) grew 0.6 percent growth in Q2 and 1.40 per cent in the third quarter of 2017 in real terms, signalling a gradual rebound for an economy earlier characterised by severe dollar crunch.
Unilever Nigeria, a Fast-Moving Consumer Goods (FMCGs) firm, last week opened its Blue Band factory at Agbara Industrial Estate, Ogun State, which is the latest addition to investments the company has made in Nigeria.
“Prior to the siting of this factory, we have also had cause to exploit economies of scale and ensure consistent access to reliable sources of raw material input. I am delighted that the result of our painstaking efforts and the support we enjoy from our stakeholders has led to the commissioning of an ultra-modern Blue Band factory today,” Yaw Nsarkoh, executive vice president, Unilever Ghana Nigeria, said.
On December 1, Kellogg’s and Tolaram Nigeria Limited commissioned a N6 billion naira factory, which has a capacity to produce 10,000 metric tonnes of cereals per year.
Kellogg’s, an American multinational food manufacturing company, set up a joint venture with the African arm of Singapore’s Tolaram Group to bolster its breakfast and snack food offerings in West Africa in 2015, with a promise to pay $450 million for a 50 percent stake in Nigeria-based Multipro, a food sales and distribution company owned by Tolaram.
In June this year, dairy maker FrieslandCampina WAMCO commissioned a milk collection plant in Saki, Oyo State, with a capacity to hold 12,000 litres of raw milk daily and 4.32 million litres annually.
This is FrieslandCampina WAMCO’s fifth milk collection plant in Oyo and will see over 10,000 small-holder farmers participate in the process and earn good income, said the company.
“Our company has taken a strategic and comprehensive approach to developing the Dairy Development Programme (DDP), focusing on key projects, programme content and enabling facilities,” said Ben Langat, managing director of FrieslandCampina WAMCO.
“But these investments must be supported by policies and socio-economic infrastructures to realise a robust dairy farming sector that can serve over 180 million Nigerians,” Langat said.
Also in June, Procter & Gamble, the largest American non-oil investor in Nigeria, commissioned a new production line for its Always brand in Agbara, Ogun State, south-west Nigeria.
On August 30, vice president Yemi Osinbajo commissioned a 60,000 metric tonnes per annum Edo State Fertilizer Plant, Auchi, which had already created 500 direct jobs, with a capacity to create more.
On the same day, BUA commissioned its second cement plant located at Obu, Okpella, Edo State. BUA has invested some $2 billion dollars in the Nigerian cement industry with capacities in excess of over 8 million tons per annum within nine years of existence.
“Our investments in the two cement lines in Edo State represent the largest non-oil and gas related investment in the whole of the Southern region of Nigeria. Our technology has the latest filtration with capacity of less than 10 milligram per normal cubic meter. We use natural gas, which is a very clean energy for both our kiln as well as the power plant in addition to having a very green environment,” said Abdulsamad Rabiu, chairman of BUA Group, at the commissioning.
In late November, FoodPro Limited commissioned its cashew processing factory in Ilorin, Kwara State.
“Through domestic processing of raw cashew nuts, we have created more than 400 direct jobs and several thousand indirect jobs for farmers, vendors, suppliers and artisans who form the heartbeat of FoodPro’s value chain. With 90 percent of FoodPro’s employees being women, we are humbled by the role we play in impacting communities and improving economic and social development conditions in our host community,” Ayo Olajiga, co-founder/CEO of FoodPro Limited, said.
Manufacturers were hard hit by dollar crunch in 2016, resulting from a combination of global oil price slump and militancy in the Delta that cut production targets.
The Manufacturers Association of Nigeria (MAN) claimed in 2016 that it lost 54 of its members whose firms went under owing to dollar crunch. Multiples of small-scale businesses were also shut down, while firms such as Truworths and Clover left Nigeria.
However, more liquidity in the foreign exchange market and the introduction of investors and SME windows have eased dollar access for manufacturers as confirmed by Frank Jacobs, president of MAN.
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