Plastic, foam makers highest energy users in manufacturing sector

Players in the domestic and industrial plastics, rubber and foam sub-sector are the highest consumers of energy in Nigeria’s manufacturing sector, according to the latest survey carried out by the Nigerian Energy Support Programme and Deutsche Zusammenarbeit (GZ).

The survey, based on 2013 indices, measures energy intensity by sub-sectors and identifies three types of energy used by manufacturers as electricity, liquid fuel and gaseous fuel.

According to the study, funded by the European Union and the German government, the domestic and industrial plastics, rubber and foam manufacturers collectively consume 5,646,000.001 tons of oil equivalent in kilo (kgtoe). A break-down shows that players in the sub-sector consume 332,000.565kgtoe of electricity, 101,000.269kgtoe of liquid fuel and 5,212,000.167kgtoe of gaseous fuel annually.

“This report shows that domestic and industrial plastics; food, beverages and tobacco; and basic metals, are the highest users of energy in the manufacturing sector,” states the report, which was presented by Adeola Adenikinju, professor of economics at the University of Ibadan, who was part of its preparation, at the headquarters of the Manufacturers Association of Nigeria in Lagos.

Similarly, manufacturers in the food, beverages and tobacco consume 883,000.472kgtoe of energy, broken down into 103,000.091kgtoe of electricity, 621,000.905kgtoe of liquid fuel and 158,000.476kgtoe of gaseous fuel.

Also, producers of basic metal, iron, steel and fabricated metal products collectively have energy intensity amounting to 508,000.319kgtoe, broken into 43,000.080kgtoe of electricity, 35,000.486kgtoe of liquid fuel and 429,000.753kgtoe of gaseous fuel.

More so, manufacturers in the chemicals and pharmaceuticals use 260,000.447kgtoe of energy, comprising 7,000.212kgtoe of electricity, 61,000.080kgtoe of liquid fuel as well as 192,000.155kgtoe of gaseous fuel.

Again, makers of textile, apparel, carpet, leather and footwear consume a total energy of 26,000.361kgtoe, consisting of 6,000.241kgtoe of electricity, 19,000.915kgtoe of liquid fuel and 1000.205kgtoe of gaseous fuel.

Moreover, those in the pulp, paper, paper products, printing and publishing collectively consume 25,000.71kgtoe of energy, which involves 2,000.512kgtoe of electricity, 20,000.463kgtoe of liquid fuel and 2,000.735kgtoe of gaseous fuel.

Energy supply ranks top at the Nigerian manufacturer’s scale of preference. Poor supply of electricity to the productive sector of the economy has driven manufacturers to opt for the liquid and the gaseous fuels.

Nigeria’s Federal Government recently privatised the defunct Power Holding Company of Nigeria (PHCN), but the new managers, comprising the generation and distribution companies, have not been able to ramp up supplies, prompting manufacturers to spend 40 percent of their income on energy.

Nnamdi Okafor, managing director, May & Baker, told Real Sector Watch at the firm’s 70th anniversary in 2014 that the drug maker spent N20 million monthly on energy.

Joe Hudson, former CEO of Lafarge Wapco, said the cement maker spent 40 percent of its revenue on energy.

A survey was recently conducted to ascertain which among power (energy), raw materials, capital and patronage, was the greatest impediment. Seventy-seven percent said power was the biggest gridlock.

 

ODINAKA ANUDU

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