Sales in local plastics, foam to hit N6.7trn in 2019

The domestic/industrial plastics, foam and rubber industry is set to have robust results by 2019, as value of sales in the sub-sector is estimated to hit N6.72 trillion.

The industry is also projected to grow by 700.5 percent even as sales in 2014 was put at N156.14 billion, Adeola Adenikinju, professor at University of Ibadan, said in a report entitled ‘Survey of Power Demand and Energy Consumption in the Industrial Sector in Nigeria.’

According to Adenikinju, who read the report to manufacturers in Lagos at the weekend, put sales in basic metal, iron and steel at N267.7 billion, while estimating the five-year growth at 34.3 percent. He also put value of sales in the industry in 2019 at N818.5 billion.

“Overall, there is huge potential for growth across the various subsectors. The domestic and industrial subsector is the most upbeat, while basic metal, iron and steel has the least optimism,“ he said, while reading the report he prepared along with the Nigerian Energy Support Programme and Deutsche Zusammenarbeit (GZ).

Data from the Manufacturers Association of Nigeria (MAN) show capacity utilisation in the industry in the first half of 2014 (H1 2014) was 52.4 percent as against 51.7 percent in the first half of 2013 (H1 2013) and 59.5 percent obtained in the second half of 2013 (H2 2013).

Similarly, local input content in the industry was 41.1 percent in H1 2014, while unsold inventory of finished products was esimated at N2.68 billion, as against N447.7 billion in H2 2013 and N1.27 trillion in H1 2013.

Also, investments in the industry were put at N31.80 billion, while those of H2 2013 were pegged at N125.26 billion.

Moreover, the data show players in the sector sourced credit from banks and other financial institutions in H1 2014, at an interest rate of 22.2 percent.

The growth of the packaging industry has boosted that of the plastic/rubber industry.

Plastic is the most common packaging material and one of the most difficult to dispose of. The factors common to all plastics are that they are light, strong and cheap to manufacture. Plastic containers are often used by cosmetics and pharmaceutical firms such as N.N Fems Industries Nigeria Limited, Emos Best Industries Limited, Imperio, among others. Soft drink makers like La Casera, 7-Up, Nigerian Bottling Company, are also in this business.

The packaging industry has witnessed 40 percent expansion in the last five years, according to Naomi Peterson, managing director, Nampet Ventures Nigeria Limited, producer of disposable plastic materials, based in Port Harcourt, Rivers State.

The industry has also accounted for 12 percent of the $4 billion recorded by the Middle East and African markets in the last five years, says PCI Film Consulting.

ODINAKA ANUDU