UNTL, Angel Spinning, Nigerian Ropes spend N32m monthly on gas, LPFO

On the average, textile, apparel and footwear makers, that are members of the Manufacturers Association of Nigeria (MAN), spend a minimum of N31.917 million on fuel and low-pour fuel oil (LPFO) monthly. Players in this sector that bear the brunt include African Textiles Manufacturing Limited (ATM), United Nigeria Textiles plc, West African Cotton Limited (WACL), Angel Spinning and Dying Limited, and Nigerian Ropes plc, among others.

Apart from textile or apparel makers, this group also includes rope (cordage), footwear and leather products manufacturers as well as carpet and rug producers, MAN’s July to December 2013 Economic Review has shown.

“At the end of 2013, electricity supply in Nigeria remained a major supply to manufacturing. In December 2013, power supply dipped by 450MW from the peak generation of 4,517MW,’’ says MAN.

The November 2013 handover of the moribund Power Holding Company of Nigeria (PHCN) to distribution (discos) and generation companies (gencos) is yet to improve the electricity fortunes of the 170 million Nigeria’s population.

According to MAN’s survey, the average number of hours of electricity supply in the first half of 2013 (H1 2013) was 7.8 hours, while that of the second half (H2 2013) was 8.3 hours.

The World Bank rates Nigeria 170 out of 178 countries in terms of capacity and efficiency in power generation, transmission and distribution. The country’s per capita kilo watts (KW) consumption is 149 KW per annum as against the global weighted average of 3,128KW per annum. While the country targets 40,000MW by 2020, India has reached 223,344MW by middle of 2013. Annual electricity generated in 2012, by Nigeria expressed in kilowatt-hours was about 20.13 billion, whereas, that of South Africa was 238.3 billion, said Olugebenga Olufeagba, chief economist at Edward Kingston Associates.

Currently, most manufacturers use either gas or LPFO, which is a fraction obtained from petroleum distillation. This impacts production cost and lessens competitiveness of local products in international markets.

“We have between eight to 16 hours of power outages in the country at the moment. Why are we surprised that most manufacturing firms post high operating costs here,” said Seni Adetu, CEO, Guinness Nigeria plc, who added that in order to have uninterrupted power for the brewery, his firm spent $3 million.