Stakeholders seek local raw material sourcing, improved electricity

Stakeholders in the manufacturing and power sector have stressed the need for local sourcing of raw materials and improvement in the electricity sector to boost manufacturing capacity in Nigeria.

General Manager, Bel Papyrus Limited, Charbel Kairouz, told journalists yesterday that Nigerian manufacturers require the government’s support to secure raw materials locally following the high cost of importing them due to naira depreciation.

Kairouz said manufacturers are struggling with the challenge of sourcing foreign exchange for raw materials, adding that power also presents a major challenge as the supply from the grid remains unstable.

“Local raw materials, with a stable price, will allow companies to save costs, time, and key supply chain challenges. In addition, if the government can look into making purchasing raw materials possible locally, it will go a long way to solving a key problem for all manufacturers in Nigeria,” said Kairouz.

The company, which has been in operation for over 25 years, is considering embarking upon backward integration as soon as economic conditions improve and the power supply becomes more stable.

With high energy costs now accounting for over 40 per cent of the cost of manufacturers, according to the Manufacturers Association of Nigeria (MAN), Kairouz said the operators need stable power because most manufacturers’ plants are designed to run always.

He disclosed that the company has scaled this challenge by relying on self-power generation solutions offered by Clarke Energy.

“Clarke Energy showed professionalism by assessing and analysing the condition of our existing power setup, carrying out a technical study, and recommending the deployment of the Jenbacher gas power plant,” said Kairouz.

Kairouz noted that since switching to gas, the business has improved competitiveness in the market, which has resulted in cost savings by using gas to generate electricity rather than relying on diesel generators.

He said the switch to gas and the decision to invest in an 11.3 megawatts (MW) plant to power the organisation’s three factories made operations more efficient, with factory equipment running over 90,000 hours.

Managing Director of Clarke Energy in sub-Saharan Africa, Yiannis Tsantilas said manufacturers must demonstrate resilience in expanding their investment.

According to him, resilience and innovation are the keys to maintaining the lead in supporting the pulp and paper industry to provide consumer products that are part of our daily lives.

Making such investments in Nigeria, Tsantilas said, would impact product costs and relieve the pressure on the global supply chain if otherwise imported.

He said: “In the wake of the call for greener earth practices, Bel Papyrus already leads sustainable development in the pulp and paper industry. It continues investing in eco-friendly production processes, including its earliest switch to gas and paper recycling, to lower carbon footprints and environmental waste. Of course, this could only have been driven by extraordinary leadership and a commitment to deliver value to Nigerians.”