Manufacturers in Nigeria self-generate 20,000MW of energy

Reginald Odia, chairman of Economic Policy Committee of the Manufacturers Association of Nigeria (MAN) and director of the MAN Power Development Company, has said that members of the association generate more than 20,000 megawatts (MW) of energy themselves.

Odia disclosed this to Real Sector Watch after a presentation by Negris Group for the supply of up to 80MW to manufacturers at Odogunyan in Ikorodu industrial cluster, Lagos.

“At the last audit we did, which was three years ago, we had an estimated 15,000MW in terms of generators and diesel. But now it should be up to 20,000MW,” he said.

“The importance of power to manufacturers cannot be overemphasised. For you to do any production, you need to run your plant and those plants need energy, which takes about 40 percent of our production cost and that is not good for our business, especially when you have to compete with imported products. Therefore everything we can, we must do to ensure we bring our costs down,” he said.

He said Nigerian manufacturers were now looking at getting private companies to supply them with energy through sources such as hydro, gas, solar and wastes, among others.

Nigerian manufacturers are hard hit by poor power supply, which gulps 40 percent of their expenditure.  They spent N25 billion in 2014 and N59 billion in 2015 on power, including alternative sources such as USP and Inverters.

Adeola Adenikinju, a professor of economics, carried out a survey in 2014 to determine the power generation capacity of manufacturers in the country. Funded by the European Union and German government, the survey showed that manufacturers’ self-generation capacity was 13,223MW as at 2013, while the self-generation produced was 8,708MW.

As power distribution companies (DisCos) fail in meeting industries’ expectations, manufacturers are now shifting to private companies that can supply them with quality, regular and cheap energy.

Wole Ayoola, president of Negris, said Negris Group would enable manufacturers to get quality power.

“Our power is relatively cheaper than self-generation. In self-generation you have to think about spare parts; you have to think about operation and general wears and tears and you have to replace equipment. But in this case, if you are a manufacturer that makes paper, you are not in the business of generating power but making paper. Rather than having a team of power engineers,  in the long run you have a number of people who come together and take the power supply headache away from you and enable you to focus on the ones that generate you money,” Ayoola said.

 

ODINAKA ANUDU

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