Capacity in food and beverage industry rises to 60%

Capacity utilisation in the food, beverage and tobacco sub-sector rose to 60.3 percent in the last six months of 2016, from 53.7 percent recorded in the corresponding  period of 2015, data from the Manufacturers Association of Nigeria (MAN) show.

This indicates 6.6 percentage point increase over the period.

When compared with 49.8 percent point obtained in the first six months of 2016, the difference becomes 10.5 percentage point increase.

The rise also affected the textile apparel & footwear subsector, whose capacity increased to 56.9 percent in the period under review, from 52.7 percent recorded in the corresponding half of 2015, signifying a 4.2 percentage upsurge over the period.

The rise is more significant when compared with 41.6 percent obtained in the first six months of 2016, meaning that there was a 15.3 percentage point rise between the two halves of 2016.

Food and beverage sub-sector involves players in industries such as fruit juice, bread, confectionery, flour, dairy, palm oil, and noodles, among others.

The sub-sector has witnessed dramatic growth as Nigeria’s population and urbanisation remain on the upsurge.

Nigeria’s population is currently 183 million, with a growth rate of 2.6 percent.

In 2012, the United Nations Organisation (UN) put Nigeria’s urbanisation rate at 51 percent, suggesting that over 80 million people lived in the cities. The UN says this number is growing at an annual rate of 3.5 percent.

Urbanisation has forced many city dwellers to resort to convenient packaged foods sold by ‘fast food’ vendors and retail stores.

The food and beverage industry is the only sub-sector in manufacturing that grew above four percent in the first quarter of 2017, according to the National Bureau of Statistics (NBS) data.

Similarly, the footwear industry in the country is growing, with Aba shoe hitting almost N100 billion, according to Real Sector Watch’s calculations.

ODINAKA ANUDU