Manufacturers ramp up expansion amid economic slump

Manufacturers are aggressively expanding their investments in Nigeria despite economic downturn and naira devaluation that hit them hard in 2016.

Dangote Sugar Refinery (DSR) Plc is investing N106 billion in its sugar operations in more than six states in six years. Its target is to produce 1.5 million tonnes of refined sugar from locally grown sugarcane during that period.

Beta Glass, a subsidiary of Frigoglass Industries Limited, which exports glass packaging materials to 13 countries, has scheduled to invest huge funds into a furnace cold repair at its Ughelli plant to extend its life-span and raise production capacity.

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, according to Abimbola Ogunbanjo, chairman of Beta Glass Plc, who spoke with Real Sector Watch at its recent annual general meeting held in Lagos.

Aarti Steel Nigeria Limited, one of the biggest steel mills in Nigeria, 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 in March this year. The mill 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.

“The mill just started in March and it is now fully stabilised. It 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 BusinessDay in Lagos.

Nigerian manufacturers suffered in 2016 due to lack of access to dollars needed to import inputs. Many companies sacked their staff last year as operations were grounded at factories due to acute raw materials shortages.

Life is slightly returning to industries as dollar access is now better than the corresponding period of 2016.

Nigerian manufacturers pumped N614.55 billion in new investments last year.

This number represents a 25.55 percent point increase from N489.45 billion recorded in 2015, data exclusively obtained from the Manufacturers Association of Nigeria (MAN) show.

Industry players expect more investments in 2017 owing to an improving business environment.

Flour Mills of Nigeria is ramping up its sugar investments through Golden Sugar Company as well as palm plantations in Edo and flour milling capacity in Lagos.

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.

ODINAKA ANUDU