Fabrics manufacturing firms whittle down to 10

As the textile, garment and cotton industry totters, the number of companies producing fabrics continues to whittle down. At the moment, the number has hit an all-time low of 10, from 34 reported by 2010.

“Those that are really producing fabrics are 10 in number. Most members now produce Baco bags, carpets, rugs, blankets, yarns, among others,’’ said Paul Jaiyeola Olarewaju, director-general, Nigeria Textile Manufacturers Association (NTMAN), in a chat with BusinessDay’s Real Sector Watch.

The surviving firms include African Textile Manufacturers Limited, Angel Spinning and Dyeing Limited, and Spinners and Dyers Nigeria Limited. Others are Tofa Textiles Limited, Lakhi Textiles, among five others, he said.

By late 1980s, the Nigerian textile market had become the third largest in Africa, with over 160 vibrant mills and more than 500,000 direct and indirect jobs generated in the industry.

By 1985, the number had risen to 180, while over 1 million Nigerians had been gainfully employed in the sector. Companies like United Nigerian Textile Limited (UNTL), Aswani Textile, Afprint, Asaba Textile Mills, Edo Textile Mills, among others, were at the forefront, while the country’s textile capacity in West Africa was about 60 percent.

Policy somersaults, poor research and development (R&D), lack of competition in the supply of cotton (raw material), smuggling and poor power supply, absence of black oil in the Northern part of the country, among others, dealt a big blow to the industry with an annual market potential of $1.3 billion, say analysts.

Consequently, many big players in the industry could not survive. Many divested to other interests, while others leased their premises to other companies. Aswani Textile leased its premises to Chellarams, manufacturer of diary products. Afprint went into oil manufacturing and car business as Enpee Industries became a packaging industry.

Information from NTMAN showed that the number reduced to just 34 by 2010. So far, analysts estimate job losses from the languid sector to over 850,000

“Job estimates in the sector in the 1980 was 1 million. With the closure of 170 firms, nothing less than 850,000 jobs have been lost from the sector,’’ said Stanley Eze, industry analyst, saying “this is how it works. 24 percent of Nigerians are unemployed, meaning that out of 170 million people 40.8 million are out of job. If 850,000 are put back to work, it means there is 2.1 percent reduction of unemployment rate.’’

The National Industrial Revolution Plan (NIRP) was recently launched by Goodluck Jonathan, Nigeria’s president, with a view to making the country an industrialised economy. Activities of the NIRP had begun before the official launch and impacted growth to sugar and cement sectors.

“They said the NIRP will affect the textile industry, but for now, nothing much is happening,’’ said Olarewaju.

The N100 billion Cotton, Textile, and Garment (CTG) Revival Fund was established to assist textile manufacturers with loans at 6 percent interest rate. This is currently managed by the Bank of Industry (BoI) and according to the bank, over 60 percent has been disbursed. Olarewaju said the Fund had helped the few manufacturers, as it had served as working capital, while enabling them refurbish their machinery.