Manufacturers retool, buy locally fabricated machines from FIIRO

Nigerian manufacturers are retooling their factories and are buying locally fabricated machines from the Federal Institute of Industrial Research Oshodi (FIIRO), Real Sector Watch has learnt.

“Many local manufacturers are now changing their imported machinery and are coming to us to buy local equipment,” Dele Oyeku, director of extension and linkages at FIIRO, told Real Sector Watch during a factory tour of Interstreet Messenger Limited in Lagos.

Oyeku, who represented Gloria Elemo, director-general of FIIRO, confirmed that the action of manufacturers was being driven by foreign exchange scarcity, which had now pushed companies into using local raw materials. The local raw materials would naturally need domestically fabricated machines designed deliberately to suit them, he said.

“Most of the machines used by manufacturers are fabricated abroad. They are not suitable for the Nigerian environment. The worst is that if you import a machine, you will need technical experts of the company from where you bought them to fly into the country if the machine develops a fault. So they fabricate the machines in such a way that you will keep depending on them when the equipment develops faults,” he said.

Though Oyeku declined to name the companies, a source who does not want to be named in FIIRO told Real Sector Watch that May & Baker as well as Dangote Group had bought locally fabricated machines from FIIRO. Another source said there had been many inquiries from manufacturers, adding that flour millers had also asked for specially fabricated machinery from the institute.

Retooling is a process of equipping a factory with new or adapted tools. FIIRO was established to conduct research that would advance Nigeria’s industrialisation drive. FIIRO’s website contains a number of companies that have benefitted from its research activities, including Cadbury Nigeria Plc, International Breweries Limited, Texagric (Texaco Nigeria) Limited, and Unilever Plc, among others.

Frank Udemba Jacobs, president, Manufacturers Association of Nigeria (MAN), told Real Sector Watch that manufacturers were changing their machines to suit local inputs,”

“We are increasingly looking inwards, embracing resource-based and import-substitution industrialisation. While we keep exploring local inputs, we know this could need retooling and adjusting of machinery. We encourage those with the capacity to go into backward integration due to foreign exchange challenges,” Jacobs, who is the CEO of Jacobs Wines, said.

According to John Kachikwu, CEO of John Tudy Interbiz, a food processor and exporter to the United States, “Manufacturers are changing machines because the foreign equipment they have cannot blend with local raw materials they are now getting.”

ODINAKA ANUDU