Chemicals are essential to manufacturing. They are used in production of goods and services. But, the chemical industry remains unexploited because of lack of technological innovation and funds. If exploited, it has the capability to grow the economy, reports Assistant Editor OKWY IROEGBU-CHIKEZIE.
The Director-General (DG), Raw Materials Research and Development Council (RMRDC), Dr. Hussaini Doko Ibrahim, is worried that despite the avalanche ofresearch institutes in Nigeria, limited success has been recorded in generating new technologies.
He noted that most science laboratories lack reagents and chemicals in the right quality and quantity. This, in his view, has resulted in the collation of false data, which has led to mass failure in various examinations with attendant implication for science education and industrialisation.
To make matters worse, lack of patronage, he said, has left research results by the institutes to gather dust on the shelf. This has led indigenous manufacturing firms to be uncompetitive.
Ibrahim, however, said the National Council for Science and Technology (NCST) has mandated the RMRDC and National Research Institute for Chemical Technology (NARICT) to develop a prgramme of action for local production of chemicals and reagents for secondary schools, colleges and large industries. This, he said, led to the establishment of pilot plant for the production of school chemicals and reagents starting with copper sulphate.
At a recent investment forum on production of copper sulphate, which held in Lagos, he said: “There are over 500 different industrial chemicals presently being utilised in the country, out of which over 70 are commonly used secondary chemicals. All these chemicals are imported despite the fact that the country has comparative advantage in terms of local raw materials availability to produce some of them.”
The DG said, for instance, last year, over N93 billion was expended on the importation of various quantities of industrial laboratory chemicals out of which N89.5 million was for the importation of 10.6million metric tonnes of copper sulphate (analytical and technical grades). He noted that if copper sulphate was developed to commercial production level, it would result in huge savings of foreign exchange and create employments. According to him, the emphasis on copper sulphate was because it is an industrial chemical and schools’ reagent with various applications in areas ranging from agriculture to medicine and other miscellaneous areas.
He pointed out that in agriculture, it is used in the preparation of bordeaux and burgundy mixture used as fungicides. It could also be used in various ways as soil steriliser; tor correcting copper deficiency in soils and animals; to control scum in farm ponds and preserv wooden fruit boxes, plant baskets and other containers. The raw materials for copper, he said, are scraps and concentrated sulphuric acid, noting that the output capacity of the pilot plant is a metric tone per day for copper sulphate with its production cost put at about N600 per kilogramme.
“This price is higher than the international price of N225 per kilogramme. If this project is fully commercialised, and there is improvement in the industrial facilities, the production cost will greatly reduce,” Dr Ibrahim said, adding that it is, therefore, expedient that Nigeria produce, if not all, most of these chemicals locally.
The output capacity of the pilot plant is said to be infinitesimal when compared to the national demand of about 10 million metric tones per annum. Experts consider this a good area of investment.
Expectedly, RMRDC said it is prepared to collaborate with any interested investor to actualise the full commercialisation of this project. Another interesting aspect of the production process is the production of distilled water as a by-product. Besides, the acidic fume from the reaction can be condensed and dissolved in the distilled water to produce electrolytes for car batteries, which is another source of income.
Chairman, Chemical & Pharmaceutical Sector, Manufacturers Association of Nigeria (MAN), Mr. Bayo Osibo, said the chemical industry is at the heart of manufacturing and central to global economy. He said it converts animals, vegetable and mineral raw materials into more than 70, 000 different products used by both industrial and household consumers.
According to him, chemicals are used to make a wide range of consumer goods, as well as thousands of inputs to agriculture, manufacturing, construction and service industry. “The chemical industry itself is said to consume 26 per cent of its own output. Most of these products help to manufacture other items, although a smaller number goes directly to consumers. Solvents, pesticides, washing soda and cement provide a few examples of products used by consumers,” he said.
While Nigeria is yet to fully exploit her chemical industry, the same cannot be said of other developed countries of the world where the impacts of the chemical industry on their economies are visible. For instance, the chemical industry is one of the United States (US’s) largest manufacturing industries, serving both a sizeable domestic market and an expanding global market.
It is also one of the top exporting sectors of the U.S manufacturing, accounting for 15 per cent of global chemical shipments. The industry’s more than 10,000 firms produce more than 70,000 products.
In 2012 alone, the U.S chemical industry recorded sales of $769.4 billion and directly employed more than 784,000 workers, with additional indirect employment by industry suppliers of more than 2.7 million. With investments of $57 billion in research and development in 2012 and strong enforcement of intellectual property rights, one-fifth of all patents granted in the U.S are chemically related.
The story is the same in the United Kingdom (UK) where the chemical and pharmaceutical sectors represent 15 per cent of the UK total manufacturing output with exports of £53billion. The sector is one of the UK’s largest sectors, accounting for 18 per cent of its goods export. The sector employed 322,000 people and generated a turnover of £60 billion last year. The sector invests over £5billion in Research & Development (R&D) every year. This represents more than 28 per cent of total industrial R&D spread in the UK.
China is also not left out. The Chinese chemical industry is said to have powerful state-owned enterprises that have made their mark internationally. “These ’local champions’ both state–owned and private, are influential and have large economies of scale, can innovate and upgrade, and harbour aggressive overseas’ ambitions,” Head, Chemicals, China and Asia Pacific, KPMG China, Mr. Norbert Meyring, said. He explained that the nature and characteristics of Chinese companies have changed dramatically over the years.
Meyring said along with setting up mega production bases and expanding products range in an integrated manner, Chinese companies have started to innovate and are swiftly incorporating technological changes into their production to brand management and are in the process of internationalising their businesses. A number of companies are keenly promoting their brands in the global market and are continuing to examine overseas investments and acquisitions.
He added that Chinese companies have reached a certain stage of development and are now increasingly exposed to global competition. The government, Meyring said, has also adopted ambitious targets with regards to sustainability and self-sufficiency while chemical companies are expected to respond to the challenge.
But Nigeria has not been able to replicate such successes in this area. The reasons are not far-fetched. For instance, as Osibo pointed out, the fortunes and growth of the Nigerian chemical sector have been erratically affected by inconsistent government policies such as the Structural Adjustment Programme (SAP).
He enumerated other challenges to include tariff manipulations, insufficient resource allocation and prohibitive import restrictions. He argued that the several economic policies pushed out by the government were unsuccessfully implemented, with each succeeding plan seeking to correct the failures of the previous one, in addition to new objectives.
Mr. Osibo said although, government has used decades to fine-tune rather unsuccessfully, the elements of development in the economy and its investment in R&D should be given enough time to mature. “In my opinion, many of these institutes are doing very good jobs, and would do better if well funded. However, it is very doubtful if the results of their findings are shared wide enough for the mutual benefit of the chemical industry,” Osibo said.
Former Acting Director-General, MAN, Mr. Rasheed Adegbenro, said the structure of industrial establishments in the county is a major challenge, noting that most Small and Medium Scale Enterprises (SMEs) are local in orientation and production. They are also uncompetitive in global standards. There are also issues around narrow market coverage, high cost of funds and infrastructural challenges.
He frowned at the duplication of efforts by several research institutes and called for collaboration instead of competition.
“Lack of systematic collaboration bet ween research institutions in the sector has created sub-optimal allocation of resources charecterised by duplication of efforts in some areas and underinvestment in others. Some research efforts have no bearing to the needs of the people, the tendency for research to be supply-driven than demand- driven with little accountability to investors,” he said.
The MAN chief expressed regrets that government has not given R&D and the chemical sector their pride of place, but preferred the importation of motor vehicles, television and radio, which are things that will not rejuvenate the manufacturing sector.
But bad as the state of the nation’s chemical sector is, experts say the situation is reversible. Osibo said funding is key. According to him, although many of the research institutes are doing good jobs, but they would do better if well funded. Besides, he said there is the need for sharing of the results of findings of research institutes to guarantee mutual benefits of the chemical industry and the institutes.
He observed that checks with the Federal Institute of Industrial Research (FIIRO), Oshodi, have shown that the Institute, over the years, developed over 250 technologies based on virtually all raw materials available in Nigeria. This include agro and mineral resources with additional reports that over 50 of these technologies have made significant and laudable impacts in the chemistry industry. He wondered what happened to the nearly 200 technologies left.
Osibo said: “Surely, somebody somewhere must be able to take the benefit of the result of such extensive R&D efforts, if only FIIRO can take the trouble of interacting extensively with the chemical industry to fit their R&D results to the needs of the industry. Given the general attitude of government departments, it would not be surprising if the FIRRO experience is found in other research institutes.”
He further pointed out that there is need to have a strong product identification and quality; access to low-cost natural gas; a highly educated workforce; world class research centres; protection for intellectual property and a robust regulatory system.
The chemical sector, he argued, can benefit more if the government realises its key position in national development. This, he said, means that government must pay attention to areas of deficiency such as lack of basic infrastructure and getting research institutes to relate more closely with the sector by tailoring efforts to their needs with a deliberate tariff structure not to enrich the government, but to lower the cost of industrial development.
Osibo suggested the development of local raw materials through the development of the petrochemical industry, insisting that with the stagnation of the nation’s petrochemical sector, the nation may never be self-sufficient in raw materials development. All these, he added, would be best achieved with a deliberate and focused development of the desired manpower.
Adegbenro said there is need to encourage indigenous researchers and scholars to move from traditional to modern practices in order to exploit the benefit and potentials of information technology.
He argued that local researchers can only make profound achievement and optimally contribute to the development of knowledge by using the internet to enrich their research and to disseminate their findings.
