Manufacturers defy economic slump to expand operations

Manufacturers are raising investments and expanding local and international operations despite economic slump that has hit Nigeria.

“We are confident in Nigeria and we just set up a cold-rolled plant in March. It is now fully stabilised and is producing already. It is a big investment and it will also be good for the Nigerian economy,” Aniket Singal, Aarti Group’s vice chairman, told Real Sector Watch in Lagos.

Aarti Steel Nigeria Limited, a Nigerian steel maker, has completed a cold-rolled mill in Ota, Ogun State, with a capacity to produce 120,000 tonnes of products per annum.

The steel maker spent roughly N11 billion to complete the mill, which is expected to serve the downstream steel makers in Nigeria using cold-rolled steel products for the production of home appliances, roofing sheets, metal furniture and filling cabinets, tables and chairs, among others.

Aarti, which has captured part of the West African market, is expanding exports to East and Central Africa.

However, Singal wants long-term stability in the foreign exchange market to enable the company cut costs and prices.

Standard Metallurgical Company Limited (SMC) is set to launch a billet mill to produce standard wire rods in Nigeria. The mill will likely create 1000 jobs in the country.

“This will be the first factory to produce billet suitable for producing standard wire rods in Nigeria. All wire rods produced today in Nigeria are being made from imported billets, but in three months from now, we are going to start producing billets in Nigeria,” Mohammed Saade, managing director, SMC, told BusinessDay.

“Currently we are producing 300,000 tonnes of wire rods per year. With phase two, we would produce 260,000 tons of billets in Nigeria. Nigeria today is a big market and we are committed to meeting local demands and the surplus can go to the ECOWAS market,” he said.

FrieslandCampina WAMCO, producer of Peak Milk and Crown Milk, has expanded its milking plants to five in Oyo State to satisfy the Nigerian market saturated with imported milk products.

“Our company has taken a strategic and comprehensive approach to developing the Diary Development Programme (DDP), focusing on key projects, programme content and enabling facilities,” said Ben Langat, managing director of FrieslandCampina WAMCO, at the commissioning of the firm’s 5th milk plant at Saki, Oyo State.

“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.

Dangote Group is consistently raising its stakes in the economy through aggressive expansion in sugar plantations, rice production, cement, flour and pasta making, among others.

Dangote Group is pumping close to $2 billion into sugar plantations to tap into opportunities in the industry currently enjoyed by Brazil, which is responsible for most of sugar imports into Nigeria.

Aliko Dangote, president of Dangote Group, is investing $700 million in Nasarawa State in sugar projects. He signed a memorandum of understanding (MoU) with Nasarawa State Government in June this year.

Flour Mills, which is one of the most diversified Nigerian conglomerates, is pumping billions in sugar, oil palm, flour and feeds, among others.

Flour Mills believes local production saves Nigeria foreign exchange.

Beta Glass is a subsidiary of Frigoglass Industries Limited, exporting glass packaging materials to 13 countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that exceed 600 tons of produced glass containers per day.

The company is investing in a furnace cold repair at its Ughelli plant to extend its life-span and raise production capacity.

Through its United Cement Company of Nigeria (UniCem), Lafarge is pumping $565 million into the economy to add 2.5 million metric tonnes (mt) capacity cement plant in Mfamosing, Calabar, Cross River State.

Honeywell Flour Mills Plc is putting N64 billion into an integrated processing facility in Ogun State.

PZ Wilmar, which is a subsidiary of PZ Cussons, is not left out.

The firm has been expanding its backward integration projects in Cross River State for some time  now  and is not ready to stop.

“We have invested something close to the region of $300 million in backward integration projects in Cross River State. This year, our plantations are going to start fruiting,” Christos Giannopoulos, managing director/CEO, PZ Cussons Nigeria Plc, told Real Sector Watch in Lagos.

The firm acquired over 50,000 hectares of oil palm plantation in Cross River State. It equally secured  the defunct Calaro Oil Palm Estate, formerly owned by the Cross River government, as well as the 12,805 hectare Kwa Falls oil palm plantation, formerly owned by Obasanjo Farms. It also bought the 5,450-hectare Ibiae Oil Palm Estate and another 8,000 hectare estate in Biase.

 

ODINAKA ANUDU

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