Pulp & paper industry shines as local input content spikes by 17%

The pulp, paper, printing and publishing sector has shown significant progress in terms of internal raw material sourcing as local input content reported significant appreciation of 17 percent in 12 months. Local input content rose from 44.41 percent in the first half of 2012 (H1 2012) to 61.10 percent in the second half of 2013 (H2 2013), data from the Manufacturers Association of Nigeria (MAN) has shown.

In H2 2012, however, local input content was 52.24 percent, while it only gained 0.89 percent to 53.13 percent in the first half of 2013 (H1 2013).

Local input content measures the level of raw materials sourced by manufacturers locally.

Paper makers often use raw materials such as pulp, water, energy, chemicals and wood chips, among others, in production. Most firms prefer the use of wood as primary raw material as it allows them to reduce environmental footprint or impact at every step in the manufacturing process, according to Glatfelter, a global supplier of specialty paper, led by Dante Parrini.

Glatfelter says although paper can be made from a variety of fibers and even grasses, the most common fiber used is wood fiber. Some players in this industry include Africana First Publishers, International Starchem Industries Limited, Onward Paper Mill, Thomas Wyatt Nigeria plc, Epesok Paper Mill Limited, among others.

According to MAN, the major complaint of players in this group within the period under review was lack of patronage from the Independent National Electoral Commission (INEC), an institution that relies so much on papers for writing and voting purposes. In order to ensure sustained investment in envelop manufacture, the players requested the introduction of 30 percent levy in addition to 20 percent import duty on envelops.

Generally, local input content in the Nigerian manufacturing sector rose within the period under review.

As of H1 2012, only 47.56 percent of raw materials were sourced locally. This rose insignificantly to 47.57 in H2 2012. By H1 2013, local input content had risen to 50.93 percent. This, however, recorded a tremendous rise to 58.58 in H2 2013.

This sector also reported rise in capacity utilisation to 52.7 percent in H2 2013, from 46.3 percent in H1 2013. However, as of H2 2012, capacity utilisation had fallen to 46.6 percent from 49 percent recorded earlier in H1 2012. Moreover, output in the sector showed significant progress, hitting N18.41 billion in H2 2013, from N14.16 billion in H1 2013. The level of spike in the industry could only be understood when it is learnt that output only totalled N3.78 billion in H2 2012.

ODINAKA ANUDU