Power supply: Instability suffocates polymer industries

Polymer products28 October 2014, Lagos – The incessant poor electricity supply experienced over time in Nigeria has left polymer industries in comatose, Mr. Joseph Imanah, National President of Polymer Institute of Nigeria, PIN, said.

Imanah, in a chat with Vanguard, lamented the high cost of production being experienced in the sector, attributed it to the country’s poor power supply.

“The energy supply in this country is not stable. It is epileptic. Most industries that are producing depend on generating sets. That makes the cost of production to be high. Added to it is the issue of raw materials which are imported. Michelin left Nigeria about eight years ago, followed by Dunlop, five years. As big as this country is, we do not have a company that manufactures tyre. All the tyres of the cars used in this country are imported,” he said.

According to him, “Dunlop tried to sustain itself but it could not because the year it folded up, the import duty on tyre was 10 percent and the import duty on raw materials was five percent. If you add the energy cost, you find that the import duty for importing raw materials is higher than buying tyre. Given that scenario, the company preferred buying tyre to importing raw materials for production.”

He explained that for government to encourage production of goods and services in the country, zero import duty on raw materials should be allowed while constant electricity supply must be put in place.

“The government that wants the industry to be sustained and be alive should weigh this type of situation and encourage production in the country by giving zero import duty on raw materials. Duty on imported tyre for example should not be less than 20 percent. That will encourage production of tyres in the country.

“Energy stability is key to encouraging production. Every year we keep on talking about electricity generation. How long will a company sustain itself on generating sets? If we tackle these two things; energy and raw materials, moribund industries will be back to production.”

According to Imanah, while India has more than half a million plastic industries, Nigeria has less than 500, a situation that has made the country dependent on imported products. He therefore called for the implementation of the local content policy to encourage production.

“In India, there are more than 500,000 plastic industries. They do not just have plastic industries, they have industries that produce the raw materials; the resins. In Nigeria, we have less than 500. How many industries in Nigeria produce resins? It is only Indorama, in Eleme, Rivers State.“The ones in Kaduna and Warri are not working. The only hope we have is the implementation of the local content policy,” he said.
*Sebastine Obasi – Vanguard

About the Author