The Nation Newspaper

Category: Industry

  • Ogun cocoa farmers seek govt’s support

    The Chairman, Cocoa Farmers Association of Nigeria (CFAN), Ogun Chapter, Mr. Solomon Williams, has appealed to the Federal Government to provide all essential inputs to improve cocoa production.

    Making the appeal in Abeokuta, the Ogun State capital, on Monday, Mr. Williams said the government should empower farmers with inputs such as fertiliser and agro-chemicals as well as facilitate easy access to loans.

    He added that lack of equipment and insufficient funds were some of the major problems affecting cocoa processing. “Government should help farmers by giving them agricultural inputs and finance to maintain their farms. Maintenance of cocoa farms is very imperative and capital consuming. It takes about two years for cocoa trees to start yielding well, which needs essential maintenance,” he said.

    riculture sector. He, therefore, appealed to the government to always involve cocoa farmers when decisions on agriculture are being taken.

    “We believe that as key stakeholders in the agriculture sector, government must seek our own input on any issue that concerns agriculture in the country,” he said.

  • Forces against non-oil exports

    Forces against non-oil exports

    With the shift to non-oil sector, particularly manufacturing, following the falling oil prices, there is a clamour for the establishment of a National Quality Policy (NQP).  The policy’s final draft may be ready in March. It will, among others, increase the competitiveness of local products in the international market, reports Assistant Editor chikodi ekereocha. 

    The National President, Association of Systems Management Consultants, Mazi Coleman Obasi, is worried. The certified quality management practitioner is troubled that despite assurances by the authorities that the draft document for the proposed National Quality Policy (NQP) for Nigeria would be ready before the end of last year, nothing has happened. He wonders why the formulation and subsequent adoption of the document is delayed despite that the European Union (EU) voted 12 million Euros (about N2.5billion) last year for the establishment of a National Accreditation System.

    The fund is meant to support the enhancement of the national quality infrastructure to improve the quality, safety, integrity, and marketability of made-in-Nigeria goods and services.

    For Obasi, and indeed stakeholders in the sector, such intervention by the EU could not have come at a better time, considering that the administration is emphasising the non-oil sector in the face of the economic downturn caused by the plunge in oil prices.The development, which has since put the nation’s finances under pressure, is seen by some development experts as a blessing in disguise. Expectedly, it has forced the Federal Government to shift focus to the non-oil sector, which, experts say, is more inclusive and growth-oriented.

    Besides, the sector is characterised by high economic linkages and is also more sustainable. This was why the EU and other international technical partners decided to intervene in the hope of increasing the competitiveness of local products at the international market.

    Under the EU-funded National Quality Infrastructure (NQI) project, implemented by the United Nations Industrial Development (UNIDO), with the support of the Federal Ministry of Industry, Trade and Investment, the objective, according to the UNIDO Country and West Africa Director, Dr. Patrick Kormawa, is to improve the quality of products made in Nigeria for them to be sold internally and in the international market. He expressed the hope that the initiative will produce a legislation that will contain a NQP, and establish an internationally recognised National Accreditation Body (NAB) that will vet  regulatory agencies, such as the Standards Organisation of Nigeria (SON) and the National Agency for Foods, Drugs Administration and Control (NAFDAC).

    Kormawa, while announcing the EU’s commitment, said the initiative would help develop a National Metrology Institute (NMI) to ensure that instruments are of international standards, improve the capacity of members of the Organised Private Sector (OPS) to conform to standards and assessment bodies. It will also enhance the powers of the Consumer Protection Council (CPC) and other consumer organisations to sensitise consumers on quality standards and ensure improved consumer protection. But these never happened, which is why Obasi and other stakeholders are calling on the authorities to fast-track the establishment of an NQP.  “Quality is number one. It is the first thing that ought to be considered as the nation focuses on building a robust export-based economy,” Obasi told The Nation.

    Obasi is right. At present, locally manufactured products and services 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 Obasi, Nigeria, despite being acknowledged globally as one of the largest consumer markets, is yet to be accredited by the International Accreditation Forum (IAF), the regulatory arm of the International Standardisation Organissation (ISO). He said countries, such as South Africa, Egypt, Tunisia, Kenya and Mauritius have since been accredited by the IAF, in line with global emphasis on quality.

    For Nigeria to be accredited by IAF, it must have in place an NQI, which refers to all aspects of metrology, standardisation, testing, quality management, certification and accreditation that have a bearing on conformity assessment. It requires the establishment of NAB, NMI, CPC, Standards Regulatory Agencies, Conformity Assessment Agency or Bodies, Quality Education and Competency Training and Certification Institutions. While the NMI is supposed to perform all the metrological and calibration, the conformity assessment agency on the other hand, certifies private companies, ensuring that their products conform to specific characteristics, increase consumers’ confidence and also create incentives for producers to upgrade their production processes.

    According to experts, the creation of these key systems and institutions will boost the competitiveness of locally made products at the international market and ensure the global acceptance of products and services from Nigeria. These key systems and institutions are what the NQP is supposed to support, but unfortunately, Nigeria, after 54 years of independence, still does not have an NQI, which is an important tool for the establishment and implementation of the NQP, which is expected to usher the economy into a new phase of growth and development.

    The Minister of Industry, Trade and Investment, Dr Olusegun Aganga, admitted this when he said the NQP would produce a broad-based system that would provide quality specifications for all manufactured products in the country. The Minister, who spoke at the inaugural meeting of the National Steering Committee (NSC) of the NQP, in Abuja, said the policy would re-engineer the quality infrastructure and the technical regulation regimes and help the Federal Government execute its economic plans.

    Incidentally, Aganga is the Chairman of the NSC, while the Director-General (DG) of SON, Dr Joseph Odumodu, is Secretary. The NSC, inaugurated last year by President Goodluck Jonathan, is charged with driving the establishment of the NQP. The broad-based inter-ministerial steering committeeis mandated to review and harmonise quality policies in Nigeria,prepare a draft NQP that is acceptable to stakeholders, and support the approval and implementation of the NQP.

    Odumodu also recognised that the policy is vital to national development because of its role in facilitating international trade. According to him, the lack of NQP had over the years made harmonisation of the available quality infrastructure difficult, thereby limiting the benefits, particularly in driving competitiveness and international market access. He said Nigeria’s standard operation was faced with many challenges with the attendant overlap of interests and activities, which sometimes result to disagreements.The cause of this, he pointed out, was the lack of NQP to hold the system and make it functional and efficient enough to earn global confidence. In other words, an NQP policy would set bases and rules for the players, harmonise the role of various players, and provide a commitment to complying with international standards.

    Odumodu further noted that until now, the determined efforts of the agency to curb the menace of substandard products have been marred by the absence of a national quality policy, adding that the policy would bring sanity to a system that is highly profitable to the actors. He noted that the new policy would  act as catalyst for local productivity and quick adaptation of best global standards and practices to enthrone quality culture, improved management and process systems and work environments, in addition to attaining efficiency and products competitiveness, reduce importation and increase exports.

    If everything goes as planned, the benefits of an NQP would start coming the way of Nigerians in the export business and the economy from March, this year when the draft document for the proposed policy is expected to be ready. Already, the final document is being edited in line with the time schedule drawn up by the steering committee, according to Dr. Paul Angya, chairman, Technical Secretariat of NSC. He told The Nation that between November and December, last year, the committee  toured the six geopolitical zones of the country with the draft quality document for validating and getting the nod of stakeholders.

    Angya said the committee visited Sokoto, in the Northwest; Minna, Northcentral; Lagos, Southwest; Enugu, Southeast, and Calabar, Southsouth. The final tour, according to him, was on December 13, last year, the Federal Capital Territory (FCT), and that in each  zone’s stakeholders endorsed the document.

    He disclosed that the coming general election is responsible for the delay in getting the final draft ready for presentation to the Federal Executive Council (FEC). He added that as soon as the elections were over, the document would be ready. “Now we are editing the final document, which will be ready by March this year for presentation to the FEC and subsequent passage by an Act of Parliament,” he said.

  • Why manufacturers are walking a tightrope

    Why manufacturers are walking a tightrope

    As 2015 begins, most Nigerians’ wish may be to own their own homes. To  realise their dreams, the cost of building materials must fall, experts say. But, some manufacturers are against that, citing harsh operating environment and high cost of production. The plunge in oil prices and devaluation of the naira may have introduced another dimension to the matter, writes Assistant Editor Chikodi Okereocha.

    The Management of Dangote Cement Plc recently wormed its way to Nigerians’ hearts when it announced a 40 per cent slash in the price of cement, a critical component in building and construction works.

    Consequently, the cement giant, under its new price regime that took off last November 3, pegged the price of its  32.5 cement grade at N1,000 per 50kg bag;  the higher 42.5 grade goes for N1,150 per bag. The price exclusive of Value Added Tax (VAT) represented about 40 per cent discount on the prevailing market price of the product, which sold for N1, 700 irrespective of the grade.

    As the company’s Group Managing Director, Devakumar Edwin, explained, the move was in line with the company’s commitment to the nation’s dire need for the development of infrastructure and to boost the federal and state governments’ ongoing effort to reduce the near 20 million housing deficit in Africa’s largest economy. “We recognise the need for a dramatic increase in the response to the huge infrastructure and housing deficit in the country and one of the ways of addressing the issue is bringing the price of building materials down to much more affordable levels especially cement, which is within our own control,” he said.

    However, shortly after the announcement,   it waslearnt that some factors outside the company’s control may have conspired to throw spanner in the works, as the anticipated price reduction could not happen.

    A reliable source told The Nation that though manufacturers in the building and construction industry had come under severe strainin recent times as a result of rising cost of production, the situation took a turn for the worse in the last few weeks. The source, who declined to be named, traced the problem to the plunging of the oil price in the international market and the slide in the foreign exchange rate of the naira to other major currencies, among others.

    Apart from the falling oil price on which Nigeria depends for over 85 per cent of its revenue, the naira devaluation and the non-inclusion of raw material input in sourcing foreign exchange from the bi-weekly Royal Dutch Auction System (RDAS) also have grave implications for those in manufacturing who look overseas for essential input. At moment, most manufacturers, including those in the building and construction industry depend on foreign input, and with exchange rate now going up the roof, cost of input went up. The interbank exchange rate went up as high as N185 to a dollar as at December 22, last year. And for manufacturers, the challenge is two-fold: “First, when they borrow to import raw materials, it will be at higher interest rates. Secondly, with the naira devalued, they will have to pay more naira for each unit of goods they import,” the source said.

    Already, there are fears within the economic circles that what is playing out is reminiscent of the events of 1986, when the naira was devalued by the then military government of Gen. Ibrahim Babangida (rtd.), which resulted in the steep rise in prices and caused collateral damage to manufacturers of consumer products. The belief is that what is happening  will lead to the lowering of the purchasing power of the local currency, increase in cost of input, with the resultant effect that goods emanating from Nigeria will command higher prices, as against imported ones.

    Already, prices of consumer goods particularly cement and other building input, rod and its associates, plywood and wood in general, electrical materials, roofing sheets of all kinds, etc, have all gone up. Expectedly, the Organised Private Sector (OPS) are worried. “If we are concluding 2014 on a faltering note because of falling crude oil prices and devalued naira, we should all be ready for a challenging 2015,” says First Deputy National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Chief Bassey Edem.

    He disclosed that because of the high interbank exchange rate of the dollar, and the 13 per cent Monetary Policy Rate (MPR) as against 12 per cent at the beginning of the year, businesses have reported increased production cost because they are spending more money to bring in their raw materials.  Edem, at a  briefing in Lagos to review the state of the nation, pointed out that the macroeconomic fundamentals are less stable than they were in the first half of this year and this has serious implications on the progress of the real sector of the economy.

    He also identified the ECOWAS CET as another major challenge manufacturers will grapple with next year. He said: “This (ECOWAS CET) is another challenge to our growing industries that are currently battling with the devaluation of the naira amongst other challenges.”

    Edem noted that though NACCIMA appreciates the need for the ECOWAS CET, it is also concerned about the fact that the nation’s borders will be thrown open for goods from  the West African region  this month when the ECOWAS CET becomes operational.

    “The need to ensure compliance with all protocol signed by ECOWAS to eliminate dumping of goods in the region becomes of great importance if our growing industries are to survive with the implementation of ECOWAS CET and for the realisation of the Nigeria Industrial Revolution Plan (NIRP),” he advised.

    However, for manufacturers in the building and construction industry, the prevailing macro-economic indicators particularly the plunge in oil prices and devaluation of the naira, are only addition to an already bad situation. This is so considering that before the economic crisis, manufacturers have been grappling with acute lack of critical infrastructure. For instance, the challenge of transporting building materials, especially cement products on the road is said to be one  reason prices of building materials have not  fall significantly.

    The deplorable nature of the country’s roads and inadequte railways has impacted on the price of the products. The high cost of building materials is because of the high price truck drivers charge for transporting the products most of which are heavy.

    Similarly, electricity supply has not improved despite the power sector privatisation. Though cement manufacturers, for instance, rely on their own gas-powered plants, getting gas to fire their plants remains a pain in the neck. A reliable source close to Dangote Cement, for instance, said the company spends about N1 billion daily on its power plants, while most of its spare parts are imported. The source disclosed that the announcement made by the firm that it was shifting to coal as an alternative energy source had not materialised, hence the anticipated cement price reduction had not happened.

    The truth is that, manufacturers run in-house power plants full time at production, for fear of unannounced power outages and surges from the utility firms, which often result to damages to machines, tools, raw material, man-hour loses, and disruption to production processes. Power takes up between 35 per cent and 40 per cent of manufacturers’cost. Also, over 75 per cent of the electricity needs of manufacturers are said to be generated in-house, leaving only about 25 per cent coming from the utility firms. What this means is that manufacturers must factor in the element of in-house plant from the start. And there is no way manufacturers would bear the extra cost alone.

    As a result, Chairman, Electronics and Electrical Sectorial Group of Manufacturers Association of Nigeria (MAN), Mr. Reginald Odiah, said it was hardly surprising why Nigeria is perhaps, the most expensive country to do business with.

    “The cost of manufacturing in Nigeria is about nine times that of China, four times that of South Africa and about two times that of Ghana,” he said, at a forum organised by MAN in Lagos. Because of rising energy cost, most manufacturing firms have had to contend with falling profit margin, which remains a major threat to business sustainability.

    With the way things are, local and foreign investors must brace for an extremely turbulent operating environment in the coming year, especially with the coming elections and other  upheavals that are set to test the resolve of investors. For instance, as former president of Nigerian Institute of Building (NIOB), Chucks Omeife, noted, the increasing cost of some building materials had discouraged investors from investing in the construction sector and low income earners from building their houses.

    “The development of our housing sub-sector may be hampered if the prices of building materials continue to rise unchecked because the cost of iron rods, window and door frames and other building materials are all escalating,” Omeife added, urging the government to rise to the challenge.

  • SON destroys N500m fake products

    SON destroys N500m fake products

    Over N500million worth of sub-standard goods were destroyed this year by the Standards Organisation of Nigeria (SON).

    Speaking at the destruction of substandard products at its Shagamu dump site, Ogun State, its Head, Inspectorate and Compliance, Bede Obayi, said most of the products were seized from various ports and the borders, while some were smuggled items seized in some states.

    He said it was disheartening to note that despite efforts by the agency to enlighten the citizenry about the negative effects of substandard products to the economy and Nigerians, importers still engaged in the illicit trade.

    Obayi said the move by SON is to show its zero tolerance for substandard products, and also serve as a deterrent to unscrupulous importers who do not mean well for the nation. “We are also going to intensify our effort to ensure that these products do not find their way into the Nigerian market,” he said,   warning importers to desist from the act.

    He said: “You are all aware that these goods are imported by people who do not mean well for the country. We have told them that if they must bring in goods, it must be goods that meet the minimum requirements of the Nigerian Industrial Standard (NIS) that will give consumers value for their hard earned money.”

    Speaking on the destruction, he said the goods are worth more than N500 million. He listed the products to include, electric armored cables, tyres, expired supermarket breakfast cereals, extension sockets, mini-led flashlights, rechargeable lamps, shaving sticks, mobile phones, stabilisers and engine oil, among others.

    “We are destroying this huge volume of goods, but creating jobs for people overseas because by the time we destroy these goods, we get nothing but economic loss. We are not happy destroying these products, but if we can save the life of one Nigerian by burning these products, we have done something for this country and this is exactly the core mandate of our agency by showing zero tolerance for substandard goods in this country.

    Obayi said SON has used many fora to educate importers and other stakeholders on the right way to import products into the country.

     

    Also, the SON Conformity Assessment Programme (SONCAP) is in place and it is still running, while its e-registration programme is also active to help trace each product to the importer and effectively monitor imports.

    “We have told importers times without number that they should approach SON to get the right standards for the products they are bringing into this country so that when they come in, we will not in any way tamper with their goods, but ensure easy access into ýtheir warehouses.

    These goods were destroyed to save the lives of Nigerians who are not aware of the harmful effect of these products, he said.

  • BoI, 10 banks to underwrite SMEs projects

    BoI, 10 banks to underwrite SMEs projects

    The Bank of Industry (BoI) has signed a Memorandum of Understanding (MoU) with 10 SME-friendly banks.

    This is coming on the heels of the success of the accreditation of 122 Business Development Service Providers (BDSPs) to assist the Small and Medium Enterprises (SMEs) in the development of bankable business plans and proposals to facilitate their access to finance,

    Managing Director, BoI, Mr. Rasheed Olaoluwa, explained that 10 commercial banks that are renowned for their SME-centric activities were chosen to partner with them in the financing of their SME customers.

    He listed the banks as Access Bank, Diamond Bank, Ecobank, Fidelity Bank, First Bank, First City Monument Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank, and United Bank  for Africa.

    He said the activities in which BoI and the SME-friendly banks would collaborate include the provision of long-term loans to qualified SMEs by BoI based on its Risk Acceptance Criteria (RAC) and the provision of working capital to the SMEs by the SME-friendly banks also based on their individual RAC.

    According to Olaoluwa, the MoU is geared towards the development of a virile SME sector in Nigeria, besides acting as a platform for the realisation of the economic transformation objectives of the Federal Government.

    He said with over 17 million Micro Small Medium Enterprises (MSMEs) in Nigeria, according to the National Bureau of Statistics, accounting for over 90 per cent of all companies, employing over 30 million people and accounting for an estimated half of Nigeria’s Gross Domestic Product (GDP), the importance of SMEs to the nation’s economic development cannot be overemphasised.

    He said access to affordable finance is one of the major challenges inhibiting the growth and development of SMEs. He however, noted that investigations revealed that the main factor responsible for the current low level of financial support to SMEs by banks generally and BoI inclusive is the fact that their loan requests are poorly packaged and their business plans non-bankable.

    Pointing the way forward, he said: “BoI has decided on a multi-pronged approach to addressing the problem of poor loan packaging and access to finance.

    “Another strategy is to approach SME-friendly commercial banks to partner with BoI in co-financing the SMEs.”

    Sectors to be financed shall include agro-processing, solid minerals and metals, light manufacturing, logistics, etc. identified under the Nigeria Industrial Revolution Plan (NIRP) launched by the Federal Government recently.

    On the terms of the loans, he said it would be in accordance with BoI term loan with a tenor of three to five years. While the moratorium will be six-12 months, interest rate is between nine and 10 per cent per year. On the other hand, working capital facilities by SME-friendly banks will be on a tenor of 6-12 months; interest rate:  MPR + 6 per cent per annum. Moratorium:    As may be applicable.

    The BoI boss further said: “The synergy that has evolved between BoI and the SME-friendly banks  is unprecedented between a development finance institution and commercial banks, will undoubtedly foster greater access to finance for SMEs, financial inclusion for Nigerians and also engender wealth creation and accelerated job creation for Nigerians.

    ‘’It is also our expectation that the SMEs that will benefit from this partnership will be good corporate citizens and meet their financial obligations to the partnering banks. This will stand them in goodstead for consideration for larger loan amounts with the hope that they will in the near future metamorphose into large enterprises.”

    He commended the SME-friendly banks for exhibiting a developmental orientation, which the economy requires at this point in time.

    Responding, UBA Chief Risk Officer, Mr. Uche said the relationship offers huge opportunity and opens up a new vista for banks in this sector of the economy. He said the synergy with BoI will also address the problem of fund –mismatch, which has bedevilled the sector for a long time, leaving the SMEs to their fate.

    Also, Access Bank Plc Executive Director, Mrs.Titi Osuntoke, said SMEs contribute less than five per cent to the GDP and as a bank will wish to contribute their quota to drive the economy with their firm belief that it is the engine of growth of any economy.

    For the Deputy Managing Director of Diamond Plc, Mrs Caroline Anyanwu, her bank has been in the fore front of SMEs support in the last five years.

    She said the involvement of BoI brings a fresh vista and they were willing to run with vigour more than ever.

    Skye Bank Executive Director, Mrs Ibiye Ekong, pledged the support of the bank for the SMEs and their wish for the real sector to grow and contribute of the economy.

  • NACCIMA faults ECOWAS common external tariff

    NACCIMA faults ECOWAS common external tariff

    The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) has raised the alarm over the proposed Economic Community of West African States (ECOWAS) Common External Tariff (CET).

    President, NACCIMA, Alhaji Badaru Mohammed, Mohammed spoke to The Nation on the sideline of the Review of the state of the Nation in Lagos.

    The NACCIMA chief, who was represented by the First Deputy National President, Chief Bassey Edem, said there is a gap between the savings and lending rate.

    He said the chamber is concerned  that the nation’s borders will be thrown open to goods from within the West African sub-region from next month when it will be operational.

    He said it would pose a huge challenge for the nation’s growing industries that are battling with the devaluation of the Naira, among other challenges.

    He cautioned on the need to ensure compliance to all protocols signed by ECOWAS to eliminate dumping of goods in the country to protect the growing industries to realise the nation’s proposed Industrial Revolution Plan.

    He said: “The cost of funds currently hovers between 22-35 per cent depending on the profile of the firms, which is too high for any productive venture and has significant implication on the global competitiveness of Nigerian firms and their products.”

    On the power sector, he advised the government to work with the Generating and Distribution Companies (GENCOS and DISCOS) to achieve the desired energy requirement of the country in view of the critical role the sector plays in the development of the national economy.

    In his words: “It is imperative that all stakeholders in the power sector should collaborate to improve on the current output, which hovers between 3,200 Megawatts Mw and 3,500 Mw. We also want to counsel government to demonstrate the political will needed to drive the alternative sources of power so as to significantly improve on the power supply in the country.”

  • Reinventing the industrialisation wheel

    Reinventing the industrialisation wheel

    The Nigerian Association of Small Scale Industrialists (NASSI) in collaboration with public sector agencies, is positioning private sector operators to drive the economy. Assistant Editor Chikodi Okereocha reports that the move, which is seen as the most comprehensive and practical approach to boost the employment and wealth creation capacity of small scale enterprises, may be the tonic to turn the economy around in the face of dwindling oil revenue.

    The industrial sector is set for a rebound. The Nigerian Association of  Small Scale Inudstrialists (NASSI), the umbrella association for all small scale enterprises and industries, is leading a campaign to position Micro, Small and Medium and Enterprises (MSMEs) operators to drive the industrialisation process.

    The campaign will see the MSMEs take their pride of place as the engine of growth. The leadership of NASSI under its National President, Chief Chuku Wachuku, is forming some strategic partnerships and alliances with major public sector agencies which mandate verges on promoting the development of MSMEs.

    Some of the agencies include Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Raw Materials Research and development Council (RMRDC), Federal Institute of Industrial Research (FIIRO), National Agency for Science and Engineering Infrastructure (NASENI) as well as development finance institutions such as Bank of Industry (BoI) and Bank of Agriculture (BoA). In fostering such strategic partnerships, the overall objective of NASSI is to position its members to drive the  economy, particularly now that focus is shifting to the non-oil sector in the wake of declining oil prices in the international market.

    Wachuku said: “Anybody who knows the economy of the emerging nations or even developed nations should know that all economies must necessarily depend on MSMEs and the informal sector because it’s the engine of growth.

    “Seventy-five per cent of all new net jobs in the US are created by small and medium enterprises, and in this country Small and Medium Enterprises (SMEs) contribute 90 to 95 per cent to Gross Domestic Product (GDP).

    “Their only problem is that whereas they contribute this percentage to GDP, the wealth addition stands at only 46 per cent.

    “So, if we could bridge that gap, which is what we are trying to do, we are going to create more wealth in the economy.”

    It was in the bid to bridge this gap, according to Wachuku, that such strategic partnerships became necessary.

    To begin with, NASSI would sign a Memorandum of Understanding (MoU) with SMEDAN soon in training and entrepreneurship.

    He said under the MoU, businesses of members of NASSI would be well-packaged with the collaboration of SMEDAN.

    “We will train you in entrepreneurship and give you the technical knowhow and entrepreneurial skill to become a businessman; how to prepare your own business plan and feasibilities, and also present you to either BoI or BoA, who is also partnering with us,” he explained, adding that the purpose is to ensure that NASSI members transit from being applicants to becoming employers.

    Wachuku noted that because most small scale industries emanate from personal resources and do not have the culture of business, they die within two to three years. The MoU with SMEDAN is therefore, seeking to reverse the trend by adding value to what MSMEs have in form of training and entrepreneurial skills.

    According to him,  this is why a Federal Government agency such as SMEDAN, a ‘one stop shop’ to facilitate the access of micro, small and medium entrepreneurs/investors to all the resources required for their development, becomes very relevant.

    He also expressed optimism that the collaboration with SMEDAN would create more impetus by adding more industries, and with the industries that are there already, encouraging them to sustain themselves and not to die.

    Perhaps, the icing on the cake for small scale industrialists under the renewed drive by NASSI to transform the industrial sector is the plan to establish industrial clusters. Already, the Minister of Science and Technology working through RMRDC and NASSI is powering the emergence of clusters along the agro and industrial value chain. Under the new arrangement, to be perfected next week, RMRDC will be coming out with raw materials-based industrial clusters in every local government area of the country.  On its part, NASENI, which produces prototype equipment and commercialises them through the private sector, will power the clusters using its solar energy plant.

    With hundreds of businesses or entrepreneurs in the 774 local government areas of the country, operators and stakeholders are upbeat over the huge impetus this would create in the industrial sector. For instance, if agric clusters such as rice clusters are established in a state such as Ondo, paddy rice becomes natural raw materials to processing mills and that means you already have off-takers. “That is what I mean by value chain. So, you are going to have raw materials based clusters where it’s only NASSI members who will access them,” he said, adding that ‘we are going to sign MoU with BoA.’

    That is not all. Wachuku also hinted that in a bid to get round the challenge of lack of access to finance, NASSI would, in the next couple of weeks, be shopping for investors so that the association can have its own micro-finance bank in every local government. The association is also considering setting up a credit department to investigate every credit refusal.

    He said: “We will supply you training and all our trainings must be certified by SMEDAN.

    “Once SMEDAN certifies you through the Business Development Service Provider (BDSP) that your business plan is good, if a bank refuses you credit, one of my departments in NASSI will ask why. So we are going to establish in NASSI a monitoring department to ask why a bank refused a NASSI member credit.’’

    NASSI’s move to establish a bank may have been prompted by the failure of its earlier MoU with FirstBank of Nigeria Plc, a development that did not go down well with some members of its state chapters particularly Kano and Rivers. NASSI had in 2012 signed a single-digit credit agreement with FirstBank.

    The loan was to be extended to members of the association who were to contribute a certain amount of money. Non-member small scale enterprise (SME) operators were also encouraged to register with a certain sum to benefit from the scheme. The loan was to be funded from members’ contributions and First Bank’s investment, while a large pool of it was to be realised from participating state governments, who were approached by the banks’ officials and NASSI to buy into the initiative.

    However, the MoU failed to achieve its objective apparently for no fault of First Bank or the leadership of NASSI. Wachuku explained that under the MoU NASSI signed with First Bank, the bank was to provide loans at nine per cent interest rate. The MoU, he said, was to made states assist entrepreneurs who have no access to finance and collateral. The state government will put funds into First Bank, about N500 million minimum. The bank will use the money as collateral and lend to the citizens of that state who are members of NASSI.

    The interest rate was negotiated at nine per cent. But when NASSI got to the states, it found out that they were not willing to back up their own citizens. He said state governments did not put money into the First Bank deal to enable the association commence the programme Hear him: “Kano State Government did not pay that money (N500 million) into First Bank. Rivers State Government did not put one kobo into First Bank. Now some stupid elements using politics thought that if you pay the normal membership fee of N15, 000 or N25, 000 as the case may be, you are now entitled to maybe N5 million.

    How do you pay N15, 000 a year and get N5 million loan? It’s stupid, it’s illiterate, and

    it’s annoyingly unintelligent for anybody to think that because you paid N15, 000 First Bank will give N5 million and you keep bashing the leadership of NASSI.”

    He said that NASSI members in Kano and Rivers State probably did not understand the concept of the First Bank MoU, which was that the bank would give loans to eligible NASSI members at nine per cent interest rate. “How do you expect a deposit money bank with shareholders funds to give you interest of nine per cent instead of their prevailing interest rate of 25 to 30 per cent?” he asked, noting that this was why  the association came up with an idea that each state government will deposit at least half a billion into First Bank. “The point is quite clear: you get your state government to put half a billion, which you didn’t do,” he said.

    However, there is good news for all NASSI members who paid membership fees in the hope of getting the First Bank loan but didn’t. “Members of NASSI who paid for the First Bank loan who didn’t get it, particularly Kano and Rivers, we will waive their membership fee,” Wachuku announced, adding however, that “Becoming a member of NASSI does not guarantee you must get a loan. Your business must be well packaged, you must be eligible to meet the criteria, and the criteria from bank to bank are different, but we are going to create common criteria. That was why I said we are going to ask government to create under SMEDAN a platform to ensure that whatever businesses are packaged, approved and certified by SMEDAN through our own partnership, will not have any problem.”

    To ensure that as many members of NASSI as possible benefit from the ongoing initiative to boost their competitiveness, the National President disclosed plans to float a new membership drive.

    The thinking is that if NASSI is going to present its members to either BoI or BoA or any commercial bank or any of its strategic partners for one form of assistance or the other, it has to have their profiles in its systems so it could track them. “Millions of Nigerians who are natural members will become members of NASSI because there is going to be cross-collateralisation,” he said, noting that the strategy is to have the public sector work in strategic partnership with the private sector.

    As Wachuku puts it: “Government cannot create employment; employment and wealth creation must be private sector-driven.” According to him, NASSI through the partnerships hopes to create five million jobs in the next five years. This may not be an empty claim. Wachuku, a former Director-General of National Directorate of Employment, (NDE), actually initiated the concept of self-employment.’’ NDE has done all these things before.

    No matter what you do, it’s still coming back to the concept of NDE, which is job creation through entrepreneurship, through agriculture, through special public works, and through skills acquisition. So what we need to do now is to forget these old ideas of government and build up capacity in the private sector as represented by NASSI,” he said.

    According to him, NASSI simply means entrepreneurs, business owners, and business owners create employment and wealth. He said NASSI remains the critical platform for Nigeria to use to create employment.

    “We are all over the place and we have mobilised. So NASSI is actually driving a serious system that will translate this to active job creation,” he said.

  • ‘Beverage sector can save $1.66b from PET bottles’

    Global provider of Polyethylene Terephthalate (PET) bottle for liquid packaging, Sidel, said its new initiative aimed at reducing the amount of PET used in beverage bottles.

    This, the firm said, would help producers save money and improve the environment.

    According to Sidel data, the average line can save between $300,000 and $1million, with faster lines or larger bottle formats capable of saving even more. This leads to an approximate average saving per bottle of up to $5 per 0.5 litre bottle or $7 per 2 litre bottle for still water, and 0.005 dollars per 0.5 litre bottle or $6 per two litre bottle for Carbonated Soft Drinks (CSD).

    According to Euromonitor forecasts for 2014-2018, releasedthis year, 216 billion PET bottles for still water and 116 billion PET bottles for CSD would have been produced by the end of the year. Assuming a minimum saving of $5 for all those bottles, the beverage industry as a whole could save $1.08 billion for water and $580 for CSD.

    In total this equates to over $1.66 billion potential cost savings for the beverage industry from water and CSD alone on a global scale. This does not include other categories such as juices, liquid dairy products and other products.”

    Service Director, Sidel, Samuel Gobbe, said: “We did the calculation exercise to show the potential that right weighting provides globally. However, we also recognised the value of producers being able to find out the specific savings that they can achieve and have therefore, introduced the packaging calculator to enable them to do so.”

    Sidel introduced an online PET savings calculator to allow beverage producers and bottlers to calculate for themselves what savings could be achieved based on their production parameters.

    “The benefits of light weighting PET bottles are well known in the beverage industry. However many producers are still not taking advantage of innovative new bottle designs that could help them make substantial cost savings,” the Zone Vice-President for the Middle East and Africa at Sidel, Clive Smith, said.

    He said great opportunities exist for the industry in terms of reducing raw material use, costs saving and improving environmental footprints by adopting new bottle designs, especially for water and CSD.

    He said in the past 18 months Sidel has launched several bottle design innovations, including its right weight bottle concept.

    On right weight, he said it was the proprietary bottle design that Sidel uses to ensure a bottle is both light while also strong enough to survive global supply chains, look good at the point of sale and offer a great consumer experience.

    On savings, Smith said studies had shown that modern bottle designs could lead to substantial savings for beverage producers worldwide. To make it easy for manufacturers to calculate their savings, he said his firm launched new PET savings calculator, that would  enable water and CSD producers to calculate how much they could save by utilising a Sidel StarLite base and a shorter neck.

    He said: “The calculator allows producers to enter their production conditions for water or CSD products, such as bottle neck format, raw material costs, annual production hours and blower speed etc. for a range of bottle formats. It then immediately calculates how much money could be saved per line by simply adapting the bottle design to use the Sidel StarLite base and shorter neck.”

  • LCCI: unfair competition killing businesses

    LCCI: unfair competition killing businesses

    THE Lagos Chamber of Commerce and Industry (LCCI) has raised the alarm over the problems facing the manufacturing sector.

    Its President, Alhaji Remi Bello, said many sectors were faced with unfair competition caused by importation.

    He said the situation has continued to hurt the sector, especially in areas, such as smuggling, faking and counterfeiting, influx of substandard products and evasion of import duty payment.

    Others are under invoicing of imports and granting of underserved waivers.

    Advising the government on the need to improve non-oil revenue in the light of dwindling fortunes in the global oil market, he cautioned that the idea of giving targets to revenue-generating agencies could backfire.

    He said: “There is a risk that best practice principles would be compromised in the desperation to meet the set target. Already, this is beginning to manifest in the manner of import valuation by the Nigerian Customs Service. Reports reaching the Chamber indicate many instances of upward review of values of import in complete disregard to the values of invoices of such imports.”

    He also alleged that importers had been made to pay exhorbitant import duty and charges, a practice which has  affected investors, especially in the absence of an effective dispute resolution mechanism.

    He suggested non-oil areas, especially taxes, by improving the environment for businesses.

    Observing that the harsh environment would make it difficult for the government to realise the desired tax revenue, he noted that tax revenue could only be as good as the performance of businesses.

    He urged the government to nurture the private sector to get robust revenue in form of tax, insisting that emphasis on tax should be more on consumption than on production.

    He said: “There is too much emphasis on investors for purposes of taxation, especially in tax on their raw materials and other input; high tariffs on energy and business premises. We should focus more on taxing consumption.”

    On the insecurity, LCCI lamented that the problem was disturbing investments.

    He decried declining investors’ confidence in the economy. According to him, this is as a result of the negative impact of the country’s  image and perception. Others are risks of doing business in some parts of the country, relocation of businesses away from the troubled spots and setbacks for the tourism sector.

    According to him, there is the distraction of the government from other germane issues in the country, leading to the abandonement of many projects under construction in the north.

    Acknowledging the efforts of  the government in tackling the problem, he appealed that such efforts be further intensified. He said this is a time for all the citizens to rally round the administration to find an enduring solution to the challenge of insurgency.

    On the declining score on ‘Ease of Doing Business’, he drew the attention of the Federal Government to the World Bank report on the ease of doing business for this year where it indicated a drop of nine points to 147th position from 138th the country scored last year among 189 economies in the world.

    He explained that the areas scored are Starting a Business (-8), Dealing with Construction Permits (-5), Getting Electricity (-1), Registering Property (no change), Getting Credit (-2), Protecting Investors (-1), Paying Taxes (-3), Trading Across Borders (1), Enforcing Contracts (2) and Resolving Insolvency (no change).

    He said the report was disheartening, noting that the nation’s scores dropped on six out of the 10 metrics used in the ranking.

    He stressed that the declining ease of doing business as indicated in the report agreed with key findings of LCCI’s business environment survey and business confidence index over the last one year.

  • LCCI trains SMEs owners

    LCCI trains SMEs owners

    The Lagos Chamber of Commerce and Industry (LCCI) has equipped Small and Medium Enterprises (SMEs) owners with the skills needed to make their products competitive.

    Its President, Alhaji Remi Bello, explained that the initiative was coming on the heels of the chamber’s commitment to SMEs’ development, stressing that the sector has been proven by developed economies as a tool to accelerate economic growth and development.

    Bello, who was represented by the Director General, LCCI, Mr. Muda Yusuf, during the graduation of 25 mentees of the chamber’s mentoring programme Scheme 2, however, decried the high level of mortality of small businesses, saying that they are veritable tools for achieving a virile economy.

    He said the programme was aimed at match-making young business leaders with experienced business owners to share their experiences with the mentees in order to make their products competitive anywhere in the world.

    “Today’s event is the graduation of the LCCI mentees and the whole idea behind this initiative is to develop the capacity of young Nigerians to be self employed and promote the culture of entrepreneurship among the young people?” he said.

    He pointed out that it is one thing to have some technical knowledge about a business and it is another to share the experience of others and this is where the concept of mentoring comes in.  In his words: “What we have done is match-make ?these mentees with mentors.

    We bring them in contact with experienced business men who are members of the chamber to share their experience with the mentees, in areas  such as identifying risks in business and how to manage these risks.

    We have been carrying out this initiative for the past two years. As you can see many of these mentees are up and running with their businesses.”

    Bello said the idea of mentoring has brought a lot of value to businesses and the chamber has supported the mentees in areas of marketing during its trade fairs by giving them free spaces to showcase their products as a way of encouraging them to do more. “We are also in partnership with regulatory agencies to ensure that these mentees are in line with the minimum standards of the Nigerian Industrial Standard (NIS) in order to make their products exportable.

    “We are also helping them in marketing their businesses because we know that marketing is one of the biggest challenges affecting small businesses in Nigeria, so the chamber through its various platforms renders support services to these businesses to encourage them.

     

    This is our own way to contribute our quota to tackle unemployment and making sure that our youths are gainfully employed,” he added.

    According to him, the Bank of industry (BoI) will also render financial support services after carrying out due diligence by looking at their businesses, business plans and prospects. He said the tendency of these mentees getting bankable loans from BoI is high as a result of the credible platform of the chamber.

    The Chairman, Ogun State Board for Technical Education, Mrs. Doyin Ogunbiyi, urged mentees to spread their talents all over the country. She commended the Chamber for setting the pace of creating the platform for the future economic drivers.

    “I want to use this opportunity to urge you fresh business leaders of tomorrow to go into the whole world to spread the gospel and also be employers of labour for the teeming population of the world,” she said.

    A mentee, Mr. Seun Afolabi, said the impact of the mentoring programme had been remarkable, adding that during the course of the training, he has learnt what the university could not give. He stressed that the mentors have given him a practical approach ?to solving pressing challenges hindering business growth.

    “I have been able to attend the Lagos International Trade Fair and it has helped me to take my business to the next level because I have expanded my horizon and built more courage to do more,” he said.