The Nation Newspaper

Category: Industry

  • How lack of standardisation hurts non-oil economy

    How lack of standardisation hurts non-oil economy

    Despite the renewed focus on non-oil export, following the plunge in oil prices, Nigeria has no functional laboratories for testing and certifying products before export. Experts say that lack of standardisation of made-in-Nigeria products and services frustrates efforts to leverage the non-oil sector to grow the economy. Assistant Editor CHIKODI OKEREOCHA reports

    It would go down as, perhaps, the most embarrassing setback in Nigeria’s renewed push for non-oil export. Recently, five containers of beans exported from Nigeria to the Republic of Ireland were rejected and returned by the importers.

    The products were reportedly filled with weevil. Consequently, the European Union (EU) slammed a ban on beans from Nigeria. The EU did not stop there. It also warned that if appropriate measures were not taken, it would extend the ban to other products.

    For an economy severely battered by crashing oil prices at the international market, requiring urgent stimulation of the non-oil export sector to give impetus to the economic diversification agenda, this was certainly bad news and a major setback.

    The Minister of State for Agriculture, Mr. Heineken Lopobiri, admitted this much when he described it as “a national embarrassment”. He, however, tried to calm the anxiety generated by the issue, saying, for instance, that the EU ban is only on beans and that it would expire by June this year.

    He said the five containers of beans were returned to Nigeria because weevils were detected in them by the Republic of Island Quarantine Service. He said the containers were exported without the knowledge of the Nigerian Agriculture and Quarantine Service.

    Lopobiri hinted that the government would return the Quarantine Service back to the ports to partake in the examination of import and export containers. He added that henceforth, for any agro-product to leave the country, it has to be certified by the Quarantine Service, as this is the global practice in the United States (U.S) and other developed countries.

    But it is doubtful if stakeholders and operators in the non-oil export business were swayed by the minister’s explanations. Their fear is that the EU might extend the ban to other products, and this could hurt Nigeria’s renewed export promotion drive.

    Such fear is hinged on the plethora of challenges that have continued to hold back the non-oil sector from taking its pride of place as hub for rapid revenue base expansion, sustainable growth and employment generation. For instance, Lopobiri’s hint on possible return of the Quarantine Service to the ports underscored the challenge of inconsistent policy framework and lack of inter-agency collaboration with regards to non-oil export business.

    In 2011, the former Minister of Finance, Dr. Ngozi Okonjo-Iweala, sacked about nine agencies, including the Quarantine Service from the ports to reduce bureaucracy. Now, the Service, including Standards Organisation of Nigeria (SON) is pushing for a return.

    While Lopobiri argues that the return of the Quarantine Service to the ports would allow the Service partake in the examination of import and export containers, the Acting Director-General of SON, Dr. Paul Angya, believes that returning the agency to the seaport would stop the importation of sub standard goods into the country.

    However, whether or not the agencies return to the ports, it still does not resolve the more fundamental issue of lack of laboratories for testing and certifying made-in-Nigeria products before export. The lack of quality infrastructure especially laboratories to aid certification of locally produced goods for export market, has continued to erode the competitiveness of locally made products in the international market.

    “A quality infrastructure for export trade is vital and a laboratory is the way to go. If we do not have the laboratory to test those products and to verify their standard conformity to the standards obtainable abroad, they cannot be exported overseas,” Dr. Angya said. He expressed concern over Nigeria’s lack of capacity to test and certify products in the country.

    The Acting DG, who spoke during a recent working visit to Lagos, lamented that Nigeria still depends on its neighbouring countries particularly Ghana to verify compliance of suspected seized goods. “… because our laboratory is yet to be completed, some of these seized goods have to go for testing in Ghana,” he said.

    He, however, explained that the agency is speeding up the construction of this facility to make Nigeria self dependent in testing and certifying locally made products before they are exported. He said the laboratory, located at Ogba, Ikeja, Lagos, is 85 per cent completed and that when completed, it would ensure that locally made products become exportable and acceptable anywhere in the world.

    Dr. Angya projected that the facility, when completed, would also aid the Federal Government’s drive for alternatives to oil export by more than 50 per cent. According to him, the laboratory will house about four different kinds of laboratories to help the country test and certify products before they are exported.

    “This laboratory is going to house about four different kinds of laboratories, which include the chemical, food and engineering laboratories and it is only when these laboratories are tested and accredited that we will stop taking our products to Ghana for testing.

    “Our products will be tested and certified in Nigeria to be exported. I believe that when this laboratory is completed, it will aid the Federal Government’s drive for alternatives to oil export by more than 50 per cent”, he added.

    A Quality Management Practitioner and National President of Association of Systems Management Consultants, Mazi Colman Obasi, told The Nation that lack of standardisation remains one of the greatest hurdles before Nigeria’s current efforts at growing the non-oil economy. He lamented that lack of a national quality infrastructure is damaging the nation’s economy and brand reputation.

    According to Mazi Obasi, a national quality infrastructure is a system of institutions, which jointly ensure that products and services produced in the country meet predefined specifications. It also provides technical support to companies so they can improve their production processes and ensure compliance with regulations or international requirements. The lack of it, he said, is not only partly responsible for Nigeria’s rising unemployment, but also why Nigeria is not globally competitive.

    Hear him: “Until we have many companies that are accredited with ISO 9000 management systems certification, we are not going anywhere; we cannot export anything. Nigeria should work towards having a quality management plan. Not up to 1, 000 companies in Nigeria are ISO certified.”

    Indeed, products and services manufactured in Nigeria lack global quality certification. They are denied access to markets in developed economies, a situation that has been a pain in the neck of manufacturers, as their productivity and competitiveness continue to suffer.

    According to Mazi Obasi and other experts, standardisation will boost the competitiveness of locally made products at the international market and ensure the global acceptance of products and services from Nigeria. This is particularly true for Nigeria considering the fact that her manufacturing sector is still emerging, depending almost totally on other countries for her supplies of manufactured products.

    The nation does not have much to offer other than raw materials and that makes the people the poorest in the world. Cocoa, rubber, shear butter, petroleum, iron ore and other commodities sell cheap from Africa and once the other continent has processed them into secondary or tertiary products like beverages, pharmaceuticals, shoes and machines, Nigerians buy them at a huge cost.

     

    SON, EU move to standardise Nigerian export

     Bad as the situation is, the SON and the EU  have begun an initiative to establish a code of practice for Nigerian agricultural products for export.

    A statement signed by the Deputy Director, Standards Directorate, SON, Mrs. Chinyere Egwuonwu, and Mrs. Irina Kireeva of EU said as part of efforts to achieve the goal, the organisations had concluded plans for a final national training on standards on code of practices for the products.

    The theme of the training, scheduled to hold in Abuja soon is Standard and Quality: Unleashing the potential of agricultural products to grow the non-oil export in Nigeria.

    The statement said the training will focus on products such as cocoa, beans, shea butter and melon. It added that the event would unveil the result of training facilitated by the organisations focusing on exports on key agricultural commodities.

    The workshop, the statement noted, would equip participants with the technicalities of the export market with regard to the issues of development of standards and the engagement of the private sector.

    It said the workshop was critical for transforming agriculture in Nigeria and would help participants understand that Africa could feed itself through agriculture and export.

    The statement, made available to The Nation, added that the training, organised by African Caribbean and Pacific Countries from the EU’s Technical Barriers to Trade, would lead to adopting modernised and commercial agriculture, which is key to transforming the country’s economy.

    Interestingly, agriculture and export are two key segments of the non-oil economy, which government is now focusing on. According to experts, the sector is more inclusive and growth-oriented. It is also more sustainable and characterised by high economic linkages.

    The hope, therefore, is that the SON, EU collaboration to standardise made-in-Nigeria products would help unlock these bountiful potentials.

  • Nigeria-U.S. trade gets boost

    Nigeria-U.S. trade gets boost

    The United States (US) Agency for International Development’s West Africa Trade and Investment Hub (Trade Hub) have trained coordinators from seven West African countries to assist businesses with the processes and documentation for exporting to the US under the African Growth and Opportunity Act (AGOA).

    Coordinators from AGOA Trade Resource Centers (ATRCs) in Nigeria as well as Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Ghana, and Senegal were trained on trade intelligence, export development, business promotion and trade facilitation for existing and potential exporters.

    Participants also learned best practices across the region and shared experiences in supporting exporters.

    Hosted within local institutions, the ATRCs have assisted over 2,700 businesses seeking to export to the US under AGOA, which waives duties and quotas on thousands of goods made in eligible sub-Saharan African countries.

    Since 2005, USAID has provided grants to build the sustainability of the ATRC network and the host institutions that provide trade-related services to private sector companies.  The grants cover training and the costs of building a database of exporters, further enabling ATRCs to develop exporters’ capacity, market linkages, and sector-specific strategies to boost trade.

    USAID supports greater use of AGOA’s tariff advantages across West Africa. Each ATRC is expected to undertake activities that enhance the export potential of companies seeking to take advantage of AGOA. These activities include developing and providing trade intelligence services through trade and business associations or directly to individual businesses.

    They also include the promotion of trade and export development advisory services by providing hands-on assistance to companies to help them understand market requirements and regulations, packaging/labeling, costing, and finance; providing business promotion services with trade show/fair participation and facilitation of regional and international business linkages as well as providing customs documentation assistance to businesses.

    This support is building a sustainable network of local institutions that can tailor services to the private sector to enhance their capacity to trade regionally and export to international markets.

  • How Dangote, Umeofia, others are driving non-oil economy

    How Dangote, Umeofia, others are driving non-oil economy

    Attention has shifted to developing the non-oil sector in the face of dwindling oil revenue. Some big players in agriculture, solid minerals and cement, among others, have taken up the challenge. Assistant Editor OKWY IROEGBU-CHIKEZIE writes on how their exploits are boosting the economies of states where they operate.

    Former Lagos Chamber of Commerce and Industry (LCCI) president Mr. Remi Bello is one of the leading advocates of economic diversification. He has been calling on the Federal Government to diversify the economy by paying attention to the non-oil sector. He believes that agriculture, solid minerals and manufacturing, have a lot of prospects. To him, diversifying the economy will correct its age-long dependence on oil, in addition to ensuring that Nigeria earns more.

    The former LCCI chief noted that the challenges facing Nigeria because of the fall in oil prices have made the need to look inward imperative. He regretted that because Nigeria had, over the years, relied almost on oil to fund its economy, most states are having challenges meeting their basic financial obligations. He was, therefore, emphatic that if the economy must survive and industrialise, there is an urgent need to diversify sources of income and encourage local entrepreneurs.

    Minister of Solid Minerals Development Dr. Kayode Fayemi could not agree less on the need to encourage local entrepreneurs to harness the immense potential in the non-oil sector.

    At the groundbreaking of Dangote Cement plant in Okpella, Edo State, Fayemi said the greatest desire of the government was to see Nigerian entrepreneurs working with it through the Backward Integration Policy (BIP) to unlock the potential of the solid minerals sector.

    According to the minister, a recent report his ministry inaugurated revealed that Nigeria’s mineral resources can be used to drive the country’s industrialisation. The report added that whereas the sector contributed just 0.34 per cent to the Gross Domestic Product (GDP), with more investment in the sector, the government would stand to earn $25 billion annually by 2025. He said plans had reached an advanced stage to encourage states to tap their mineral resources, insisting that the country can only grow as more local players come on stage.

    Interestingly, some discerning local investors have seen the bountiful opportunity which the Federal Government’s BIP has thrown up and are willing to invest in the states where the mineral resources are domiciled. Already, states, such as Lagos, Ogun, Edo and some states in the North are benefitting from huge investments by some indigenous players and multinationals. This has given more impetus to the BIP, which ultimately seeks to pull Nigeria out of its perpetual dependence on imports, particularly, since that crude oil prices have been crashing since mid June 2014.

    For instance, in Edo, where the President of Dangote Group, Aliko Dangote, is producing cement locally by using the abundant raw materials in the area, the Governor Adams Oshiomhole and the indigenes have been jubilating.

    The governor personified that joyous mood when he said: “By investing $1 billion in a cement plant in Okpella community, Dangote has established a factory that will feed thousands of mouths directly every day, while 100,000 people will benefit from education and health facilities that will come from the investment.”

    The six million metric tons Dangote Cement’s new plant in Okpella expected to employ thousands of youths, directly and indirectly in the next 18 months. This was why Oshiomole lauded Dangote’s aggressive investment drive, noting that without his (Dangote’s) resolve to build industries and employ Nigerians, so many youths would have been jobless.

    While saying that Nigerians will be forever grateful to the industrialist for helping to reduce unemployment in the country, the governor said: “Dangote is a special breed. He is an enigma that has done so much for the youths of this country. He should be lauded for doing so much to develop our youths and put food on the table of thousands of Nigerians. For us in Edo state, we are grateful and will continue to be grateful for this huge investment.”

    Apparently endorsing the decision of local entrepreneurs in the mould of Dangote to help drive the non-oil sector, Oshiomhole said the practice where manufacturers obtained land from government only to use the land as a base for importation was the most destructive practice for an economy.

    His words: “Dangote has set an example by manufacturing locally, using Nigeria’s abundant natural resources. It is a wicked practice for investors to get government land and use it as a base for importation. If Nigerian investors invest in the economy, the economy will grow from strength to strength and young men will have jobs.’’

    The Okuokpellagbe of Okpella Kingdom, Dr. Andrew Dirisu, also echoed the hopes of residents of the community that the investment will create jobs and pther positive spin-offs. While lauding the doggedness of Dangote Cement and its prompt response to the call for the establishment of the cement plant, he commended the State Governor for his support in acceding to the desire of the people to have Dangote Cement in the community, since the raw material is available there.

    The paramount ruler, who promised that the community will provide the necessary enabling environment for the plant to operate and generate economic activities, also

    urged the company’s management to ensure that the various Corporate Social Responsibility (CSR) projects that the indigenous conglomerate is known to have provided for its other host communities in various sectors are replicated in Okpella to the delight of his people.

    The expectant mood of the people is not lost on Dangote, which was why he noted that the new cement plant could transform the economy of Okpella and Edo State. He said investment in local cement plants saved Nigeria $3 billion spent on importing cement. While promising to always invest in Nigeria, as the country remains the best place to invest in the world, he urged other private sector investors to invest in critical areas of the economy. He said the government has expressed readiness to resuscitate the industrial sector.

    The Executive Secretary, Nigeria Sugar Development Council (NSDC) Dr. Lateef Busari, said the upward swing in the size of injected investment by operating companies in sugar manufacturing  expresses possibility in achieving self sustainability. He said the outlook for local sugar production is optimistic with the rekindled commitment of sugar companies to exploring backward integration in achieving self sufficiency.

    Busari, who spoke with The Nation in an exclusive interview, said the refineries, particularly, Dangote Sugar Refinery, has expanded  and refurbished its factory operations site at Savannah Sugar Company (SSC) in Numan, Adamawa State with about 6,000 hectares (ha) of sugarcane plantation.

    He noted that Savannah, the most efficient of all plants has also acquired a new 12,000TCD mill and expanded the estate to include adjoining Guyuk with size of about 7,500 hectares recently granted by the State. Also, the firm has acquired land in six other states including Lau/Tau, Taraba State; Kebbi State; Kaugama, Jigawa State;  Mambe, Niger State; Kpata, Kwara State and Kogi State for sugar projects.

     

    Erisco Foods Limited

    also investing

    Dangote Group is not the only indigenous operator that has thrown its hat in the non-oil ring. In tomato puree manufacturing, for instance, an indigenous firm Erisco Foods Limited has taken the gauntlet by investing over N300 million into the production of tomato paste. The tomato paste company, said to be the largest in Africa and the fourth largest in the world, is billed to create thousands of jobs.

    The company’s Chief Executive Officer, Chief Eric Umeofia, however, urged the Federal Government to sustain the formulation of positive policies that would enhance production capacity of manufacturers, stressing that the issue of multiple taxation should be addressed. He stated that the foreign exchange restriction of 41 items by the Central Bank of Nigeria (CBN) has saved the country a huge forex and compelled Nigerians to patronise home-grown foods.

    Umeofia said for the company to fast track its backward integration programme, it has developed a technology that synchronizes its existing machines to produce tomato paste directly from fresh tomatoes to tomato pastes and ketchups. He stated: “The Erisco Foods revolution in tomato paste production will stop the annual wastage of over 75 per cent of fresh tomatoes across Nigeria. If we continue with the good policies of the present administration, there will be nothing like a tomato glut anywhere in Nigeria in the next two years.”

    The CEO explained that as off-takers, the company will produce and process to meet its local demands and export to earn foreign exchange provided government continues to support manufacturing. “Our backward integration programmes planned for Jigawa, Sokoto and Katsina will generate employment and prosperity for 50, 000 Nigerians within three years,” Umeofia said, adding that the company has an installed production capacity of 450,000 metric tonnes per annum in its Lagos factory alone, making it the biggest in Africa and 4th Largest in the World.

    He urged the government to direct heads of government agencies involved in industrial sector to prioritise local manufacturers over their foreign counterparts. He pleaded with government to stop giving undue advantage to what he called ‘briefcase’ foreign investors who camouflage as industrialists but whose primary interest is to import finished goods as raw materials without paying taxes or the relevant customs duties.

     

    Agric also on local

    investors’ radar

    Apart from manufacturing, the Dangote Group is also investing heavily in agriculture for massive employment generation. For instance, the group recently commenced multi-billion dollar rice projects in some states in the North, aside flagging off a rice out-grower scheme, with the distribution of rice seedlings to farmers in Jigawa State. The plan, according to Dangote, is to reduce Nigeria’s dependence on imported rice, create massive jobs for the people and provide good returns to the famers.

    He explained further: “We envisage producing up to one million tons of white rice with the cultivation of 200, 000 hectares of land. This will lead to a conservation of about $11 billion presently spent on importation of food items that could otherwise be produced locally. It is gratifying to know that the Federal Government has recently announced that it is putting in place strategies that will make farmers have greater access to implements and other inputs.”

    Local manufacturers in the flour milling sector are also not left out in the backward integration programme. For instance, Flour Mills of Nigeria Plc (FMN) has invested in Thai Farms and other agricultural projects to cultivate raw materials for most of its processes.

    Although there are still challenges with meeting factorydemand, thereby necessitating importation, the company has been able to reduce importation of raw materials by over 50 per cent, according to the Group Managing Director, FMN, Mr. Paul Gbededo.

     

    Government

    reaffirms support

    The Minister of Industry, Trade and Investment, Dr.Okechukwu Enelamah, said his ministry is ready  to play a critical role in the nation’s economy, especially now that  the government is poised towards the diversification of the economy away from oil in a sustainable manner.

    He said he plans to achieve this through creating an enabling environment for industry, trade and investment through the implementation of the Nigeria Industrial Revolution Plan (NIRP), championing the cause of the Micro Small and Medium Enterprises (MSMEs) as a means of creating jobs and achieving inclusive growth.

    Enalamah also said despite the challenges the nation is facing, the present administration is poised to attract long-term local and foreign investments.

    In his words: “The flip side of the crisis is the opportunity it presents; to create something new; to develop new attitudes and appetites.

    “Fully convinced that the crisis is too good an opportunity to waste, the administration of President Muhammadu Buhari has started the difficult but rewarding task of breaking free from our traditional dependence on oil and gas and in its place developing a diversified export base and a solid base of domestic manufacturing.”

    Enalamah hailed indigenous entrepreneurs and promised that government will do all things possible to create an enabling environment for them to thrive.

    Secretary to the Government of the Federation, Mr. Babachir Lawal, also said the government would continue to support the growth of indigenous businesses, especially in this period of economic downturn.

    He said the current economic reality calls for a decisive policy thrust to address issues which must be pragmatic enough to leverage on.

  • SON, EU partner on export

    SON, EU partner on export

    The Standards Organisation of Nigeria (SON) and the European Union (EU) have begun an initiative to establish a code of practice for Nigerian agricultural products for exportation.

    A statement jointly signed by the Deputy Director, Standards Directorate, SON, Mrs. Chinyere Egwuonwu and Mrs. Irina Kireeva of EU said to achieve the goal, the organisations planned a national training on standards on code of practices for products.

    The theme of the training, scheduled to hold in Abuja on Thursday, is “Standard and Quality: Unleashing the Potential of Agricultural Products to Grow the Non-oil Export in Nigeria.”

    The statement said the training will focus on products such as cocoa, beans, Shea butter and melon. It added that the event would unveil the result of training facilitated by the organisations focusing on exports on key agricultural commodities.

    The workshop would equip participants with the technicalities of the export market with regard to the issues of development of standards and the engagement of the private sector.

    It said the workshop was critical for transforming agriculture in Nigeria and would help participants understand that Africa could feed itself through agriculture and export.

    The statement said the training would lead to adopting modernised and commercial agriculture, which was the key to transforming the country’s economy.

    The training is to be organised by African Caribbean and Pacific Countries from the EU’s Technical Barriers to Trade.

  • National Assembly, NESREA, MAN, others collaborate on goods production designs

    National Assembly, NESREA, MAN, others collaborate on goods production designs

    The National Environmental Standards and Enforcement Agency (NESREA) is collaborating with the National Assembly and Manufacturers Association of Nigeria (MAN) on the implementation of the Extended Producer Responsibility Programme (EPR).

    EPR is designed to promote the integration of environmental costs of goods throughout their life cycles.

    It will make the manufacturers of products responsible for the entire life-cycle of the commodity, especially for their take-back recycling and final disposal.

    It also means that a producer of an article should be able to know about the life cycle of such product, how it is used and how it can be recycled. The programme process would give manufacturers responsibility to know the final stage of any given product manufactured.

    NESREA’s Director-General Mr. Lawrence Anukam, confirmed that the agency has developed guidelines for  the programme.

    Expressing appreciation to the NASS for showing a lot of political will in making sure that the EPR takes off, he said the agency was working with MAN to make sure that the EPR takes off smoothly.

    “It is a very good programme and I call on all Nigerians to support it. It is going to create wealth; it is going to make our environment cleaner, and at the same time it is going to make the industry, the manufacturer of that product to know exactly how it can create new designs that can last longer and create less problems on the environment. So, it is a win-win situation for all involved in it,” Anukam said.

    Stating that the collaboration would strengthen and enhance the implementation of the programme, the NESREA helmsman called on the private sector to play a key role in the implementation of the programme.

    “It is necessary that EPR programme comes on board and it needs to be advanced. It is part of the regulations and the law is already there. The programme is an initiative that will control waste, it is also an initiative that will generate waste and we all know that waste is wealth,’’ Anukam added.

  • LCCI to celebrate core values in business

    LCCI to celebrate core values in business

    The Lagos Chamber of Commerce and Industry (LCCI) has concluded plans to honour excellence and ethical business practices at the Commerce & Industry awards slated for Lagos.

    LCCI Director-General Muda Yusuf said the objective of the annual awards was to recognise, celebrate and promote private and public institutions who have exhibited the core values of best business practices.

    He said it was also for those who have impacted positively on the society through innovations, business sustainability and positive growth.

    “LCCI Commerce and Industry Awards prides itself as a highly credible platform where winners emerge through a painstaking selection process from hundreds of entries supported by robust research and market intelligence,” Yusuf explained.

    Some of the awards to be won at the event include award for excellence in diverse sectors of the economy such as banking, pension, insurance, hotel, hospitality, power and energy.

    Others are healthcare, manufacturing, construction, automobiles, aviation, pharmaceuticals, education, media and broadcasting among others.

    Yusuf also revealed that the chamber will be celebrating deserving corporate organisations and public institutions that have made remarkable contribution to the development of commerce and industry, and the economy at large.

  • Nigeria to become hub for tile export

    • Firm to produce 500,000 ceramics yearly

    Niegria will soon become the hub for the exportation of ceramic tiles and sanitary wares, an industrialist has said.

    Dr. Khater Massaad, Chief Executive Officer of CDK  Integrated Industries, said Nigeria would be exporting the products to other African countries and Europe.

    CDK, he said, would open its state-of the-art porcelain and ceramic factory next month.

    He spoke with reporters at the factory in Sagamu, Ogun State.

    Massaad said the factory is built on a million square metres of land to meet global ceramics and sanitary wares industry demand in Africa and Europe.

    “Our aim is to produce high quality ceramic tiles and sanitary wares products. Everyone is in need of high quality products. We aim to meet the best quality in the world, matching and possibly surpassing the American and European standards,” Massaad said.

    Noting that the firm’s vision is to be number one in Africa, in terms of product quality and pricing, Massaad said the company was engaging Nigerians who are buying into the vision of the company as a professional organisation with global best practices.

    Over 65 million square meters of ceramic tiles are imported into Nigeria, according to Ceramic World review magazine published in Italy. And CDK Integrated Industries’ plan is to help Nigeria address this challenge by producing the highest quality of tiles and ceramic products that will shift the world focus to Nigeria in the area of ceramics and sanitary wares.

    The firm’s factory will be producing 500,000 pieces annually of several models of European designer collections, using the best technology, best raw materials, highest standards, world class fittings and soft closing hinges, amongst others.

    CDK Integrated Industries Porcelain and Ceramic tiles factory will be producing 60X60 CM, 30×60 CM and 40x40CM polished, glazed, glazed polished and soluble salt tiles with superior quality, using state of the art technology and latest digital printing equipment.

    On employment opportunities, Massaad stated that the company will be employing over a thousand Nigerians to be part of its dream of a world class factory to contribute to the development of the economy, adding that in the long run the idea is to eliminate the massive importation of the item from Italy and other countries to give value to the Nigerian economy.

    With active contribution to the construction of over 50 factories across the world, Dr. Massaad concluded that the investment in Shagamu, Ogun State, Nigeria will transform the economy of the communities and the country.

    He added that the firm is working on obtaining the necessary certification from the Standards Organisation of Nigeria (SON).

  • Investment in financial technology to exceed $150b in five years 

    •‘Nigeria threatened by FinTech companies’

    Cumulative investment in financial technology (FinTech) globally could exceed $150 billion within the next three to five years, according  to a survey by auditing giant Pricewater House Corper (PWC).

    The survey said  financial institutions and technology companies are stepping over one another for a chance to get into the game titled.

    FinTech, according to experts, refers to any innovation on how people transact business. It applies to the segment of the technology startup scene that is disrupting sectors such as mobile payments, money transfers, loans, fundraising, and even asset management.

    The report, “Blurred Lines: How FinTech is shaping Financial Services”, said traditional Financial Services (FS) firms fear almost a quarter of their business is at risk from FinTechs. It said FinTech companies are more bullish, believing they could capture a third of incumbents’ business.

    The report, made available to The Nation, added that Nigeria is just as threatened by FinTech companies as their global counterparts. It, however, said it expects Nigeria to leap frog and adopt the rapidly changing technologies as they emerge, driven primarily by consumers’ demands.

    The report, which featured the responses of 544 CEOs, Heads of Innovation, CIOs and top management involved in digital and technological transformation across the FS industry in 46 countries, said incumbents believe 23 per cent of their business could be at risk due to further development of FinTech.

    Results from the PwC survey, which assessed the rise of new technologies in the FS sector and their impact on market players, also revealed that 83 per cent of respondents from traditional FS firms believe part of their business is at risk of being lost to standalone FinTech companies, reaching a staggering 95 per cent in the case of banks.

    The survey showed the banking and payments industries are feeling the most pressure from FinTech companies. Respondents from the fund transfer & payments industry anticipate that in the next five years, they could lose up to 28 per cent of their market share to them, while bankers estimate they are likely to lose 24 per cent. This compares to around 22 per cent in the case of asset management & wealth management and 21 per cent in insurance.

    Two-thirds (67 per cent) of FS companies ranked pressure on profit margins as the top FinTech-related threat, followed by loss of market share (59 per cent). One of the key ways in which FinTechs support the margin pressure point through innovation is step function improvements in operating costs. For instance, the movement to cloud-based platforms not only decreases up-front costs, but also reduces ongoing infrastructure costs. 

    Blockchain, a distributed ledger technology, represents the next evolutionary jump in business process optimisation technology. According to PwC, it could result in a radically different competitive future in the FS industry, where current profit pools are disrupted and redistributed towards the owners of new, highly efficient blockchain platforms. Not only could there be huge cost savings but also large gains in transparency. Yet it ranks low on the agendas of participants.

    While the majority (56 per cent) recognise its importance, 57 per cent say they are unsure or unlikely to respond to this trend. ”When faced with disruptive technologies, the world’s leading companies succeed by rapidly weaving them into their DNA, as part of their ‘business as usual’ process,” says Partner and Financial Services Advisory leader at PwC Nigeria, Dr. Andrew S Nevin.

    Nevin added: “Blockchain and disruptive ledger technologies offer a once-in-a-lifetime opportunity for FS companies to transform the way they do business. In our view, the lack of understanding of blockchain technology and its potential for disruption poses significant risks to existing business models and the firms that do not take the time to understand the impact will underestimate the opportunities and threats that blockchain can provide.”

    To put this into perspective, PwC’s Global Blockchain team has identified over 700 companies entering this space, 150 of whom it says are ‘ones to watch’ and 25 of which it expects will likely emerge as leaders.

    The PwC’s survey showed the most widespread form of collaboration with FinTech companies is joint partnership (32 per cent), which PwC said is indicative FS firms are not ready to go all in and invest fully in FinTech.

    Asked what challenges they face in dealing with FinTech companies, 53 per cent of incumbents cited IT security, regulatory uncertainty (49 per cent) and differences in business models (40 per cent).

    In the case of FinTech companies, differences in management and culture (54 per cent), operational processes (47 per cent) and regulatory uncertainty (43 per cent) were deemed the top three challenges when dealing with traditional FS firms.

    On the survey, EMEA FinTech Leader at PwC, Mr. Steve Davies, said: “FinTech is changing the FS industry from the outside. PwC estimates within the next three to five years, cumulative investment in FinTech globally could well exceed $150b.

    As the lines between traditional finance, technology firms and telecom companies are blurring, many innovative solutions are emerging and there is clearly no straight forward solution to navigate this FinTech world.” 

    For PwC Global Financial Services FinTech Leader, Mr. Manoj Kashyap, “FinTech is shifting the paradigm of traditional intermediary roles by making them obsolete. While FS organisations have acted as intermediaries in the financial system by providing an invaluable service to clients, their functions are being usurped by new technology-driven business models.

    “Given how fast technology is developing, incumbents cannot afford to ignore FinTech. Nevertheless, our survey has shown that a non-negligible 25 per cent of firms do not deal with FinTech companies at all. With the pace of change now occurring at increasingly faster intervals, no FS business can rest on its           oars.”

    Nevin concludes: “Nigeria is just as threatened by FinTech companies as their global counterparts. We expect Nigeria to leap frog and adopt the rapidly changing technologies as they emerge, driven primarily by consumers’ demands.”

  • FIRRO: Science, others key to transformation in food system

    FIRRO: Science, others key to transformation in food system

    The Director-General, Federal Institute of Industrial Research, Oshodi (FIIRO), Dr. Gloria Elemo, has said science, technology and innovation are key to a robust transformation in the food system, expanded local agro-industry and value addition as well as improved management of resources for sustainable agricultural production.

    Elemo, who said this at the 10th Lecture Series of the College of Natural and Applied Sciences of the Bells University of Technology, Ota, noted that the Sustainable Development Goals (SDGs), the new global agenda, is positioned to address hunger, poverty and other human issues.

    She said: “They are a follow up to the MDGs after the post 2015 development agenda and they provide another opportunity to successfully tackle issues of human development especially food security and nutrition, but with lessons learned and experience from the MDGs.

    “Countries all over the world are expected to domesticate the agenda and make it work for them, Nigeria inclusive.’’

  • Manufacturers seek 3% interest rate reduction

    Manufacturers seek 3% interest rate reduction

    The Manufacturers Association of Nigeria (MAN) has canvassed a reduction in interest rate to between three and five per cent. The prevailing rate does not support the government’s economic diversification drive, it said.

    MAN President Dr. Frank Udemba Jacobs, who spoke during the week on the sideline of the association’s Council in Lagos, said: “One of the challenges we have is funding.We are concerned with the high interest rate that banks charge manufacturers. Government is serious about diversification but they cannot diversify at this current rate. We hope the government will reduce the rate to three to five percent.”

    He condemned multiple taxation, insisting that it is wrong for companies moving goods from one place to another to pay the same tax in every local government. He said there should be a one-stop-shop where taxes are paid.

    Jacobs recalled his recent discussion with Central Bank of Nigeria (CBN) Governor Godwin Emefiele, where he (Emefiele) made good his promise to make further concessions for manufacturers in foreign exchange (forex) allocation.

    “Apart from the 41 items that are not valid for forex, all the 10 sectors said that they have been getting forex allocations now. I want to report to you that CBN has been allocating foreign exchange to some of our members now,” he stated.

    Jacobs urged the government to hurriedly assent to the budget to ensure its full and timely implementation.

    “We are happy that a huge sum was allocated to infrastructure in the budget, which is a major bane of industrialisation. Energy is still a major problem for manufacturers and railways that should be conveying goods at  relatively cheap costs are still not there. It is our hope that when its full implementation starts, some of these challenges will be addressed,” he said.

    On the lingering fuel crisis, Jacobs stated that it has had a huge impact on the economy, noting that when factories cannot get fuel, they will not produce and it will  create problems.

    Jacobs also maintained that the widely held belief that locally-made goods are inferior to imported ones is  wrong, pointing out that for a manufacturer to be a MAN member, the products of such a firm must meet acceptable standards.

    He further said MAN has signed a Memorandum of Understanding (MoU) with the Standards Organisation of Nigeria (SON) to ensure quality standards.

    “We have MoU with SON, such that any MAN member must ensure that any product they make in Nigeria meet standards. Similarly, those in food and drugs have MoU with National Agenda for Food, Drug Administration and Control (NAFDAC), which has quality parameters they have to meet. So no manufacturer who is a member of MAN can produce substandard products,’’ he clarified.

    The MAN chief expressed optimism that with the media hype that is going on today about awakening the consciousness of people on the need to patronise made-in-Nigeria goods, sooner or later the attitude of Nigerians will change.

    He said before now, people enjoyed foreign goods, but the point must be made that whenever anybody patronises any imported good in favour of the locally manufactured one, the nation exports employment and imports unemployment.

    The MAN boss lamented the closure of many companies, attributing it to lack of power supply.

    “If you don’t have enough power and diesel to power your generator, or your generator gets old and you cannot replace it, chances are that you will close down the factory,” he said.

    He also identified multiple taxation, which, according to him, could force a business owner that cannot cope to close the factory. “Even the interest rate of 23 to 25 per cent can make a manufacturer close down, he added.