Manufacturers initiate strategies to exploit bulging consumer market

As the country’s consumer coast continues to enlarge, with the potential of reaching 160 million, large manufacturing firms are coming up with newer strategies to ensure they tap into the huge market, Real Sector Watch investigations have shown.

Currently, Dangote Sugar Refinery plc, a leader in Nigeria’s sugar industry, has adopted the strategy of building plants close to the customer, in order to beat competitors and enable consumers feel at home with its products.

“Ultimately, we see the demand is in the North. Our main customers and demand come from the North. That is why we build many of our plants over there,’’ said Graham Clark, group managing director, Dangote Sugar Refinery plc, in an exclusive interview with Real Sector Watch.

Dangote Cement is also expanding faster, recently launching the 52.5 grade as well as 3X, which is a 42.5 variant. Devakumar V.G Edwin, group managing director/CEO, Dangote Cement (DangCem) plc, recently told Real Sector Watch that the firm would soon launch another 42.5 variant while also looking forward to increasing capacity to 35 million metric tons (mmt), from about 21mmt. Dangote Group, a well-diversified conglomerate, has also gone into juice, noodles, sacks, tomato paste, salt, pasta, among others.

With growing infrastructure and housing demands, Lafarge Group, second largest cement maker in the country, is on the verge of reaping the dividends of consolidation, having already concluded plans to transfer its shareholdings in businesses in Nigeria and South Africa to Lafarge Wapco, to form Lafarge Africa. The intended transaction will increase capacity to 12mmt and explore more opportunities in the undeveloped Ready Mix Cement business, which Lafarge Wapco has developed more than any other cement maker in the country, according to CSL Equities, economic and market research firm, in its June report.

The United Cement Company of Nigeria is also investing N84 billion to add 2.5mmt, making it capacity reach 5mmt by 2016. Ashaka Cement is equally investing N100 billion, to hike capacity to 4mmt, from the current 1mmt.

Flour Mills of Nigeria, another well-diversified conglomerate, has now moved into noodles and pasta, impulse food, fertiliser, sugar, packaging and packaging industries. Massive work is done on the company’s 750,000MT capacity plant, said Jacques Vauthier, chief financial officer, recently. Its Golden Sugar, Noodles and Pasta are also catching consumers’ appetite, according to findings.

PZ Cussons Nigeria plc has invested not less than $130 million in strengthening and expanding its businesses, including household and electronic appliances operations, in Nigeria, according to Richard Harvey, chairman, PZ Cussons, United Kingdom.

Harvey inaugurated an additional refrigerator production line to expand the distribution of cooling products in Nigeria and Ghana and to meet surging demand.

Real Sector Watch has also found that mega firms now extend their production plants to areas where there are better tax laws, industrial clusters and external economies of scale. Procter and Gamble (P&G), which is currently in Ibadan and Lagos, for instance, has established a $300 million mega plant at Agbara, Ogun State, to meet consumer demands and have better top-line and bottom-line performances.

Also, the West African Ceramics Limited (WACL) has also extended from Ajaokuta, Kogi State, to Agbara, having announced a plan to establish a $50 million plant there.

ODINAKA ANUDU