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Harmonising local raw material sourcing standard

Harmonising local raw material sourcing standard Recently, the Manufacturers Association of Nigeria (MAN) partnered the Raw Material Research and Development Council (RMRDC) on how to look inward and source raw materials locally amidst worrying foreign exchange (forex) rate crisis and other macro-economic challenges in the country’s manufacturing sector. TAIWO HASSAN reports

Recently, the hierarchy of the Manufacturers Association of Nigeria carried out a survey in which it admitted that the Backward Integration and Resource- based Industrialisation programmes of government to develop local raw-materials for industrial use has been waning. Following this setback, the association disclosed that it had led to lacuna in the country’s industrial sector, thereby resulting to forex crisis and other economic challenges. Sourcing raw materials locally for production will definitely boost capacity utilisation in the country’s manufacturing sector and help curb the difficulties experienced at the ports, while waiting longer time for the shipments of imported raw materials. In MAN’s survey, manufacturers enumerated in the fieldwork that 42 per cent of them does not agreed that local sourcing of rawmaterials have improved locally in the country’s manufacturing sector while another 42 per cent also disagreed with only 16 per cent simply not being sure on the level of local sourcing raw materials in the country.

Raw materials partnership

However, in correcting the abnormalities, the Non-Mettallic Mineral Products Sectoral Group of the Manufacturers Association of Nigeria took a bold step to partner the Raw Material Research and Development Council on the development of inward and source raw materials locally as part of the concerted efforts geared towards revitalising the manufacturing sector in Nigeria. While speaking during an interactive meeting on local sourcing of raw materials with management of RMRDC in Lagos recently, MAN Sectoral Chairman, Mr Afam Mallinson Ukatu, pointed out that the partnership will help in sourcing for alternative raw materials for the sector in both immediate short terms and long terms. Ukatu, who is also the Managing Director/Chief Executive Officer, NISPO Porcelain Company Limited, explained that the interactive meeting became necessary and imperative giving the current challenges facing manufacturing companies in Nigeria in the course of producing products. He said: “The decision was necessary, given the paucity foreign exchange, difficulties experienced at the port, high cost of foreign raw materials and the fluctuating value of naira with the recent soar in inflation rate. “Non-Metallic and Mineral Products Sectoral Group of MAN consists of industries that produce Glass, Cement, Ceramic, Chalk, Crayon, Lime and other allied products. “The sector has experienced a quantum leap in its activities in the last 5 years thereby contributing significantly to the diversification of the economy which is in-line with the Economic Recovery and Growth Plan (ERGP) initiative of the Government.”

Challenges

The Chairman said it was gratifying to note sub-sectors like cement, glass and ceramics had recorded huge improvements, leading to significant contribution to the national GDP in the last three to five years. He decried the restraints posed by COVID-19 on the sector, adding that scarcity of forex gave rise to acute shortage of raw materials as well as intermediate inputs. According to him, “it was in this regard that the sector unanimously agreed to look inward and source their raw materials locally. And, as such, acknowledged RMRDC as the appropriate agency to handle this issue, owing to the pre-existing relationship with MAN and previous research efforts in ensuring ease of sourcing raw materials for cement, ceramic and glass products in Nigeria.”

RMRDC’s inputs

In his presentation, titled: “The efforts of RMRDC in the development of raw materials for the non-metallic minerals sector with reference to cement, ceramics and glass,” the Director, PPDD, RMRDC, disclosed various locations of some of the major raw materials that are used in the nonmetallic and mineral products sector. According to him, most breakthroughs of RMRDC in the non-metallic minerals sector are development of scrubber for the beneficiation of gypsum in the cement industry. The equipment, which was test run and met the specification of 85-90 per cent purity, a standard required by cement and POP industries. This has ensured import substitution of POP by 15 to 20 per cent. Physico-chemical characterisation of limestone deposits across the country, which has revealed the suitability of high quality marble/limestone for the production of cement, powder filler for paper, rubber, paint, calcium carbon, etc.

MAN’s BIP lamentations

The association berated the Federal Government’s indisposition to the course of improving and developing local raw-materials for industry use via the ‘technically abandoned’ Backward Integration and Resource- based Industrialisation programmes over forex crisis and other economic challenges confronting the country’s economy presently. MAN stated that the initiative (BIP) had started promisingly in the country’s manufacturing sector, but was affected severely by forex crisis, thus forcing government to turn back its attention to it amidst worrying forex scarcity in the country following low revenue earning from crude oil sale at the international market. In addition, this has also prompted local manufacturers operating in the country’s manufacturing sector to raise concerns about the poor performance of local raw-materials development in the country, which is being induced by the worsening forex crisis and government’ being adamant towards the resuscitation of the Backward Integration and Resource-based Industrialisation programmes.

Last line

Local manufacturers are saying it is critically important for government to refocus on the Backward Integration and Resource-based Industrialisation in order to restore investor confidence in Nigeria’s industrialisation agenda.

 

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