The Nation Newspaper

Category: Industry

  • Manufacturer demands single digit interest rate

    Manufacturer demands single digit interest rate

    The Federal Government has been urged to mandate the Central Bank of Nigeria (CBN) to put in place strategic framework that will enable banks resume normal lending to the real sector at single digit interest rate to avert further strangulation and total collapse of business activities in the economy.

    Speaking with The Nation in Lagos, the Group Executive Director Golding Hamed Holdings, Chief Adebayo Hamed also urged the government to restructure all export-related agencies to take further stimulus measures and support industries to expand export in the country.

    He urged the government to introduce new incentives and faithfully implement existing concessionary duty rates on raw materials not available in the country.

    On energy supply to industries, he bemoaned what he called the recurring debacle of unavailable and un-sustainable power (energy), which has prevented the manufacturing sector to attain its full capacity and operate optimally. He said the cost of sourcing for alternate power, swells operational cost, leaving an insignificant profit margin for the manufacturers.

    He said: “The government should also ensure the immediate crafting of a national policy on gas pricing that will eliminate monopoly and reduce the number of beneficiaries on the value chain as quick wins that will improve the lot of manufacturing concerns and cushion the effect of the seemingly intractable business environment.”

    He affirmed that what qualifies a nation for the tag ‘developed economy’ is the presence of a virile manufacturing sector, adding that Nigeria would remain in the community of developing countries except the enabling environment required for manufacturing to thrive is created.

    He urged the government to urgently consider some of the issues militating against manufacturing and put in place a mechanism that will bring down the cost of doing business and enhance trade facilitation.

  • Stakeholders differ on real sector growth in 2014

    Members of the organised private sector (OPS) hold divergent view on the possible growth in the real sector. Some said the challenges facing the sector are multifarious and would be difficult to overcome, while others believe that despite the challenges, the growth outlook remains positive this year.

    Those showing optimism for growth hinged their reasons on the forecast by the International Monetary Fund (IMF), which stated that the nation’s Gross Domestic Product will experience a growth of 7.4 per cent this year up from the 6.2 per cent recorded in 2013 as a result of increased domestic consumption.

    The IMF projection was part of its latest World Economic Outlook, which found that sub-Saharan Africa recorded some level of growth in 2012 and 2013, due to increased domestic consumption.

    But a chartered tax practitioner, Mr. Chukwuemeka Eze, said from the previous outlook in 2013 where doing business was tough due to infrastructure deficit, epileptic power supply and high interest rate, the picture does not appear rossy as we are made to believe. He said there is no indication that these elements have changed and if that be the case, the position may not be too different from last year’s.

    The manufacturing sub-sector currently contributes less than five per cent to the GDP, a situation which has remained consistent in the last 10 years and is reflected in the inability of the sector to create adequate jobs.

    The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, stated categorically that the cost of doing business may not be lower this year as there are no indicators to the contrary. He said at 30 per cent interest rate, companies cannot be expected to make good profit especially with the influx of fake and sub standard goods into the country from the Asia. He warned that with the development, this year may pose a special risk for businesses that are public sector driven as some investors who had transactions with some state governments, may find it difficult to get their payments even where the previous administration belongs to the same political party as the incumbent.

    He said: “Public sector related transaction is high risk in a political year, because it is contract driven. It is not easy to get redress in our courts so the advice to investors this year is to determine the risk of every business by going to great length to know its impacts and probability.”

    He called on government to encourage local entrepreneurs by fixing the power sector and roads and make funds accessible to Small and Medium Scale Enterprises (SMEs).

    President, LCCI, Alhaji Remi Bello, said if the government continues with its reforms and initiative in cassava, sugar and rice sub-sectors, the economy will do better than last year. He added that this will be possible if there is constant upgrading of infrastructure in terms of electricity and roads. But he criticised the government for the huge recurrent expenditure in this year’s budget. He said the huge recurrent expenditure, which is over 70 per cent, is not good for the manufacturing sector and should be adjusted in the interest of the greater majority.

    He said: “The fundamental challenges of weak competitiveness and low productivity would likely persist, especially with a federal budget structure that is heavily tilted towards recurrent spending.”

    As an advocacy group from our studies and analysis, we discovered that manufacturers will probably have the challenge of high energy cost, high interest rates, which is about 20 per cent and above in addition to the myriad of regulatory agencies that make different demands on them, he said.

    He said smuggling and under-invoicing of imports and many more are daily challenges to manufacturers, adding that though some multinationals and other conglomerates in the sector may have the resilience to cope, but for most manufacturing SMEs, it is a nightmare.

    He said the stagnation of the sector remains the tragedy of the country’s economy as production is critical to economic and social stability.

    In his words: “The business environment is generally not conducive for manufacturing enterprise, which is why the risk of industrial investment is high and continues to get higher. The various policy interventions have not had the desired impact on the sector. Unless there is an effective and sustained protection and support for the sector, it is difficult for any significant progress to be achieved in this regard.”

    The National Vice-President of the Nigerian Association of Small Scale Industrialists, Chief Duro Kuteyi, said government should more for the agricultural sector by injecting the process of preservation of crops and adding quality to agricultural produce to assist farmers to meet the international quality needed to encourage export.

    Acting Director-General, Manufacturers Association of Nigeria, Mr. Rasheed Adegbenro, said the fact that 2013 was ending on a positive note for manufacturers and other stakeholders in the real sector, is a pointer to an upward growth in the coming year.

    He said those in the sector are not expecting too many challenges, especially with the reduction in the figure of unplanned inventory, which he said was a major problem to manufacturers.

    “In the first half of 2013, unplanned inventory was N21.75billion, while the figure we had in the same period in 2012 was N32.83billion, so, you could see an improvement,” he said, adding that manufacturers are optimistic about the sector in the current year due to noticeable improvements in specific areas.

    He said despite the optimism, there are concerns that the lack of investment in the Micro, Small and Medium Enterprises (MSME) may hinder growth , and therefore urged the government to work harder to support the MSME, which lack access to financing.

  • Industrialist seeks govt’s support on single digit interest rate

    The Federal Government has been urged to mandate the Central Bank of Nigeria (CBN) to ensure that the real sector obtains loans at single digit interest rate to avert further strangulation and total collapse of business activities in the economy.

    The Group Executive Director, Golding Hamed Holdings, Chief Adebayo Hamed, who stated this, also urged the government to restructure all export-related agencies to take further stimulus measures and support industries to expand export in the country.

    Adebayo urged the government to introduce new incentives and as well implement existing concessionary duty rates on raw materials not available in the country.

    On energy supply, he bemoaned what he called the recurring debacle of unavailable and un-sustainable power, which he said has prevented the manufacturing sector from attain its full capacity to operate optimally. He said the cost of providing alternate power is so prohibitive that it leaves the manufacturer with no significant profit margin for his efforts.

    He said: “The government should also ensure the immediate crafting of a national policy on gas pricing that will eliminate monopoly and reduce the number of beneficiaries on the value chain.

    He affirmed that what qualifies a nation for the tag ‘developed economy’ is the presence of a virile manufacturing sector, adding that Nigeria would remain in the community of developing countries except the enabling environment required for manufacturing to thrive is created.

    He urged the government to urgently consider some of the issues militating against manufacturing and put in place a mechanism that will bring down the cost of doing business and enhance trade facilitation.

  • Workers, residents raise alarm over waste dumps

    Factory workers in Agbara industrial complex in Ado-Odo, Otta Local Government area of Ogun State and residents of OPIC Estates have raised alarm over the  high rate  of indiscriminate dumping of  industrial wastes and refuse in the area. They have called on the state government to come to their rescue.

    The indiscriminate burning of the industrial wastes is worrisome because of the closeness of the burning site to the gas pipeline. The site is between three and four metres away from the gas pipeline, which constitutes grave danger to lives and properties, the concerned workers have said.

    The Nation observed along the road that leads to Igbesa from Badagry Express way, there are several make-shift refuse dump sites for toxic wastes from factories around the area. The wastes are burnt later, which pose serious hazards to those living in the area.

    Apart from endangering lives , the dumpsites also serve as safe haven for some miscreants who have made the area their places of abode.

    Over 30 miscreants have turned the dump sites to their abode, from where they attack innocent passersby and residents at night.

    Investigation conducted by The Nation also revealed that in the entire Agbara industrial area and environs, there is no single fire fighting station.

    Although  factories and few wealthy individuals have rudimentary fire-fighting equipment, but these cannot contain any possible fire outbreak from the gas pipeline.

    The growing investments in the area call for more attention from the state government. Industry sources said that investments in area run into several billions of naira with more growth potentials.

    Some experts who spoke with The Nation on the potentials  of the industrial complex, also predicted that if given the right incentives and necessary attention by the government, it may become one of the biggest industrial hubs in West Africa.

    But one of the senior managers of one of the companies operating in the area who craved anonymity, said there are some issues  crying for  the attention so as to avert any imminent industrial waste hazard.

    The government, the manager said, needs to tackle the  inadequacies and hardships being faced by those who live and work in the area to facilitate trade and make the complex more attractive for business.

    “Residents and workers are slowly and quietly being exposed to danger because of the indiscriminate dumping and burning of industrial waste. Most of our workers have been treated for heart, lung  and skin diseases because of the indiscriminate burning of the dumps, which they inhale,” he alleged.

    The community near the Agbara sewage treatment plant also complained about contagious and unhealthy odour from the plant.

    The oozing of putrid odour from the plant, the spokes man of the community, Mr Gabriel Ayoola said, is dangerous and harmful to the community, adding that the government needs to direct the Ministry of Environment to liaise with the estate management to ensure stricter compliance with established rules and regulations to safeguard the villagers from any epidemic occurence.

     

  • Young entrepreneurs urged to foray into interior designs

    An entrepreneur and promoter of Unique Interiors, Mrs Debola Majekodunmi, has urged youths to take advantage of opportunities in the sector.

    She told The Nation that her firm plans a symposium which would among other things, build capacity on creative designs on both local and imported materials to upscale potentials of participants to make them marketable in both the local and foreign markets.

    The goal, she said, is to upscale young entrepreneurs into becoming employers of labour and possibly exporters of competitive finished products. She pledged that the company will at its 11th exhibition and symposium at Federal Palace provide ideas by giving detailed information on interior designs and the intricacies involved in meeting the demands for the international market.

    Mrs. Majekodunmi said the exhibition is committed to the vision that the nation’s economic growth can be enhanced through creativity. Citing examples with India and other Asian Tigers that are growing their economy through Micro Small and Medium Enterprises (MSMEs), information technology designs , she stressed that Nigeria can leverage on its local entrepreneurs and core competencies to build a formidable economy.

    On activities to bring local furniture makers, related products and skillful designers together, she said her firm is making inroad into encouraging the popular Maryland Cane chair producers and others in that bracket to expose them to international market. She commended the artistic designs of the cane chair producers, but called for more efforts in terms of training, exposure and funding by government for them.

    She also said that key stakeholders, such as architects, Interior Designers Association of Nigeria (IDAN), government agencies and International Federation of Facility Managers (IFMA), Information Technology professionals, electronics manufacturers, such as LG and Samsung among others will feature at the event.

    She said the symposium will host the biggest auction where visitors can buy manufactured goods at rock bottom prices including the introduction of N1k shops where visitors can buy goods at discounted price from N1k to N1,999.

    A business development consultant, Mr. Dapo Orelaja criticised government for not making good their threat of banning imported furniture by surreptitiously allowing the importation of completely knocked down parts (CKD) used in the industry into the country which is affecting the local industries.

    The symposium organizsing chairman, Mr. Sola Olajuyigbe said the event is targeted at horning the creative skills and abilities of young entrepreneurs to make them better in terms of product delivery that can compete with imported ones. On the expected outcomes, Olajuyigbe said they expect to have young people sign on to entrepreneurship training while gearing up to be employers of labour in the nearest future.

  • NDE empowers 100 traders in Ekiti State

    The National Directorate of Employment in Ekiti State said it had provided 100 traders in the state with N20,000 each to boost their businesses this year.

    The State Coordinator of the directorate,Mrs Adeola Shafaru, said this in an interview with the News Agency of Nigeria(NAN) in Ado- Ekiti.

    Shafaru said the initiative was aimed at eradicating poverty among traders in the state as well as boosting their various trades.

    She said the beneficiaries were drawn from all the 16 local government areas of the state.

    She said that each of the beneficiary was expected to provide two guarantors, adding that the loan would be refunded by the end of December this year.

    According to her, the defaulters of the loan will be sanctioned.

    The coordinator also urged the traders to spend the money judiciously.

    “We are going to watch them and see how they will spend the money because experience has shown that some of them will attempt to divert it to meaningless ventures,” she said.

  • Private sector warns against fixed electricity charges

    On the heels of President Goodluck Jonathan’s marching order on power sector investors to improve power supply by June this year, the Organised Private Sector has asked for the revision of the electricity billing system where manufacturers would be made to pay for what they actually consumed. They said currently, industrialists are made to pay a fixed monthly charge through the estimated billing system which they tag fraudulent.

    President, Lagos Chamber of Commerce and Industry (LCCI), Alhaji Remi Bello, warned against the dangers of allowing the system to run without strict operational rules and guidelines that will protect consumers. He urged government to make available the pre-paid metres nation-wide and called on the new investors to play by the rules and avoid the old mistakes of PHCN which made it inefficient.

    The LCCI president in a chat with The Nation, drew the attention of government on the implications of fixed electricity billing on the real sector, saying Nigeria is about the only country where people are made to pay for what they did not consume, or buy.

    He further warned that inflationary pressures may intensify this year as a result of a number of factors impacting on the supply side of the economy. He listed the variables as trade policy issues, high energy cost, high tariff on rice, the proposed ban on fish importation and the upward review on vehicle tariffs.

    Also, the National Vice Chairman of Nigerian Association of Small Scale Industrialists (NASSI), Mr Duro Kuteyi in a telephone interview, said the industrial sector may not experience growth except there is a proper overhaul and improvement in electricity supply.

    Like his LCCI counterpart, Kuteyi regretted that the current practice of fixed electricity billing is detrimental to the survival and growth of Small and Medium Scale Enterprise (SMEs), saying the operational environment is already a disinsentive to the sector. He said: “On the average, small scale industrialists pay about N50,000 monthly to meet their electricity needs, instead of the current N186,000 they are charged. These unused charges have adversely affected profit and stunted growth.”

    We therefore call for direct government intervention to see that the reform in the sector takes care of phantom billings.

    Director –General (LCCI) Mr. Muda Yusuf said manufactures are still burdened with the high cost of electricity generation and called for real reforms in the sector. He asked the new power sector investors to be meticulous in their operations especially in their billing system to ensure that manufacturers and individuals alike are only made to pay for what they consume. Yusuf warned that if the investors are allowed to fall into the pitfall of the Power Holding Company of Nigeria (PHCN), the manufacturing sector cannot expect good report at the end of the year.

     

     

     

     

  • Unilever donates to less privileged

    In line with its promise to be a force in its society by helping the helpless, Unilever Nigeria Plc has organised a Christmas party for children at Dustbin Estate, Ajegunle.

    The party, held at the weekend in conjunction with Lot Charity foundation was informed by the need to give children a sense of belonging as well as show love to the less privileged in the society.

    Unilever foundation global ambassador, Mr Osita Abana, said it was donepursuant to delivering on the company’s plan to improve the world by reducing poverty.

    Abana said the need to be proactive necessitated the spelling bee competition and hand washing campaign for children in the community so as to reduce sickness.

    He said it is an inner city programme of the company and there will be an avenue for Unilever workers to visit the place often as that is how the growth of the area could be sustained.

    Abana said it is an intervention campaign of the company that is being done globally,in conjunction with their partners.

    Lot Charity Coordinator, Mrs Tolu Sangosanya, said the foundation takes care of the homeless by providing accommodation and education to them so as to be responsible members of the society.

    She said people need to be celebrated and as children, they deserved to be made happy, hence the need for the party.

    Over the years, she said,the Center takes care of vulnerable kids and have after school support programme,which helps in improving their literacy level and teaches them community development.

    Gifts was given to the foundation and the community by Unilever.

  • Osun supports SMEs with N500m

    The Osun State government has injected about N500 million to promote Small and Medium Scale enterprises (SMEs), the Commissioner for Commerce, Industry, Cooperatives and Empowerment, Ismaila Adekunle Jayeoba-Alagbada, has said.

    He told The Nation that the gesture is geared towards growing SMEs in the state, adding that government is building capacity as well as an enabling environment for small businesses to thrive. such as organising training in business management, succession and marketing plans.

    He said government established four departments in the state’s Micro-Credit Agency for traders, artisans and those in agriculture and administration. The Commissioner revealed that the current administration has made available 35 hectares of land to establish an academy that will serve as an incubator for unemployed youths. Youths will under the platform acquire several skills on self-employment.

    The idea according to him is to equip them with necessary skills to make them employers of labour in future.

    Furthermore,Jayeoba-Alagbada said the importance government put on reliable data for economic planning made it to embark on biometric registration of all artisans and tradesmen to adequatelycater for their needs.

    On how to ensure standards, the commissioner explained that the launch of weights and measures in all markets across the state is to maintain standard across board.

    According to him the current pragmatic administration of industrilaisation is viable as it has attracted private industrial investment to the state with the establishment of Omoluabi Garment Factory, which he said has since commenced full production.

    He said: “A Business Support Centre has been established in the state capital in collaboration with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). The core activities of the centre are the enhancement of the capacity of operators of Micro, Small and Medium Enterprises and entrepreneurial development of unemployed graduates and youths. This is sequel to the development of industrial estates across the state.”

    He revealed that the Osogbo Industrial Estate has been fully developed and allocated to entrepreneurs. Jayeoba-Alagbada said the Ilesa industrial estate is virtually completed with all critical infrastructural facilities in place. Plots in the estate are presently being allocated to industrialists while the development of industrial estates in seven other locations across the state is in the pipeline, he added.

    The commissioner said the state government in collaboration with the Bank of Industry (BoI), under the OSSG-BoI (MSME) Fund, provides financial support to cooperatives, industrial investors and operators of micro, small and medium enterprises.

     

     

     

     

     

     

     

  • Auto dealers decry hike in price of second-hand vehicles

    Some auto dealers have decried the new price hike on imported second-hand vehicles popularly called “tokunbo”.

    The dealers blamed the new price hike on the implementation of the new automotive policy being introduced by the Federal Government.

    The policy is aimed at encouraging the use of new vehicles and discouraging importation of second-hand vehicles.

    Mr Yemi Savage, Managing Director, Royal Motors, told the News Agency of Nigeria (NAN) that the proposed hike in import tariff from10 per cent to 35 per cent would have adverse effects on auto business.

    ‘’We have beginning to experience the ripple effects. The prices of cars have risen to ridiculous amounts from dealers in Cotonou.

    ‘’It is becoming difficult to add our own commission to the price of the vehicles to make them affordable to our customers.

    ‘’I wonder what the experience will be by the time the policy is fully implemented,’’ he said.

    Mr Chucks Egbunike, Chief Executive Officer, Nigerian Express Motors, expressed concern that the implementation of the policy might lead to increased smuggling of used vehicles.

    Egbunike appealed to the Federal Government to create enabling environment for assembling and manufacturing vehicles in the country.

    ‘’Formulating a policy is not enough; government should give us affordable alternatives to “tokunbo vehicles”,’’ he said.

    President Goodluck Jonathan has assured that the implementation of the policy would not inflict pains on the people.

    Jonathan gave the assurance when he received a delegation of the Road Transport Employers Association of Nigeria (RTEAN) at the Presidential Villa, Abuja, last weekend.

    He said that the policy would help to revive the local automobile sector.