Manufacturers make N483bn new investment amid tough business environment

Manufacturers defied all odds in the Nigerian business environment to pump N483.05 billion into the real sector within the first six months of 2014.

These investments were made in land and building, plants and machines, furniture and equipment, motor vehicles as well as assets under construction, latest economic review from the Manufacturers Association of Nigeria (MAN) has shown.

“From the survey of members’ manufacturing activities, it was revealed that most of the companies placed more priority on investing in plants, machinery and spare parts for retooling, with the overall objective of increasing and improving their productive capacities,” says MAN, in the January – June 2014 Economic Review.

Investments in plants and machines were worth N349.82 billion, representing 72.42 percent of the total. This was followed by investments in land and building put at N68.70 billion, representing 14.22 percent of the total. Trailing them were investments in assets under construction, estimated at N47.82 billion and indicating a 9.9 percent share of the total.

But investments in furniture and equipment were N8.96 billion, representing only 1.85 percent share of the total, while those of motor vehicles were the least with N7.75 billion, reporting only 1.60 percent.

“The level of investment indicates the confidence Nigerian manufacturers have in the economy,” MAN adds.

The data show Ogun industrial estate had the highest percentage of investments worth N376.57 billion within the period under review, representing 78 percent of the total.

“The majority of manufacturing investments were directed towards Ogun industrial axis, which consists of Ota, Agbara, Ibafo/Mowe and Shagamu industrial areas,” MAN further observes.

Ikeja industrial zone also posted a good result as it attracted N39.85 billion worth of investments, representing 8.25 percent of the total.

Kano/Sharada/Challawa attracted investments worth N19.75 billion, representing 4.1 percent of the total. Moreover, Oyo/Ondo/Osun/ Ekiti zone had 3 percent share of the total, as they collectively attracted N19.18 billion investments within the period.

Kano Bompai is next with N9.39 billion investments, representing just 1.94 percent of the total. Similarly, Anambra/Enugu zone had N5.5 billion worth of investments, representing 1.1 percent share.

Other estates such as Edo/Delta, Imo/Abia and Rivers, among others, had less than 1 percent share of the total.

On the group basis, food, beverage and tobacco manufacturers made investments worth N92.67 billion, while textile apparel and footwear makers turned in investments of N9.46 billion.

Similarly, players in the wood and wood products pumped investments worth N4.52 billion just as those in the pulp, paper, printing and publishing added N9.54 billion.

Also, chemical and pharmaceutical manufacturers added N179 billion new investments in the manufacturing sector, whereas non-metallic products group, consisting of cement, ceramics and glass pumped N14.13 billion within the six-month period, the data show.

Domestic/industrial plastic and rubber players invested N31.80 billion in the manufacturing sector within the period while electronics/electrical manufacturers added investments worth N27.83 billion.

The basic metal, iron and steel invested N111 billion while the motor vehicle and miscellaneous assembly staked N3.19 bilion within the period under review.

BusinessDay can confirm that Procter & Gamble (P&G) was among firms that invested within the period under review. In March 2014, P&G completed the construction of a $300 million plant at Agbara Industrial Estate, Ogun State, South-West Nigeria.

The investment turned out to become the United States of America’s largest non-oil investment in the country, with a promise of creating over 2000 direct and indirect jobs.

“The size of the plant here (at Agbara) is 400,000 square metres, and we are expanding by bringing in businesses that will be locally produced,’’ Yannis Skoufalos, global product supply officer, P&G, Cincinnati, told BusinessDay at the commissioning of the plant.

Flour Mills of Nigeria, through Golden Sugar Company, also invested an excess of $250 million in sugar plantations, machinery and plants within the period under review. The firm also pledged to pump in $1 billion over the next three to five years for expansion into the West Africa market.

ODINAKA ANUDU