‘How manufacturers can grow revenue, contain costs to manage recession’

In order to manage the nation’s present recession, stakeholders have urged firms to grow their revenue/sales and contain costs.The Country Managing Director, Accenture Nigeria, Niyi Yusuf, stated this at the Ninth Business Luncheon of the Manufacturers Association of Nigeria (MAN) Ogun State chapter, in Ota recently.

With the theme: “Manufacturing in Recession: Which way forward?”, Yusuf expressed serious concerns over the present state of the nation’s economy.

He said: “On the short term, organisations should embark on product repackaging, development of value products, move to cheaper, cleaner sources of energy to managing potential wage increases, reduce expatriate and other payroll costs, seek opportunities to optimize idle assets such as land, properties while vehicles, machines can be leased to others.

“On the long term, firms should collaborate with banks and other financial services institutions to give consumers credits/diaspora locations, shared/collaborative procurement services and long term sourcing contracts as well as collaborating and building alliances, strategic combinations to either gain scale or reduce back offices.

“Manufactures can also take advantage of the naira devaluation to export products to nearby neighbouring markets such as Benin Republic, Togo and other countries with significant Nigerian population in diaspora.

On his part, Chief Executive Officer of Bennett Industries Limited, Odiah Reginald noted that manufactures must key in to backward integration agenda, improve cost of production, embracing energy efficiency plan and review marketing strategies.

On the part of the government, he said there should be policies that will be consistent with the support and growth of the manufacturing sector; facilitate access to adequate funding at a single digit interest rate; ensure that the current 60 per cent concessionary forex allocation to the manufacturing sector for raw materials and machinery importation is judiciously implemented; encourage the patronage of made in Nigeria products.

In his welcome address, Chairman, Ogun State MAN, Wale Adegbite, expressed concern over the present state of the economy. According to him, ‘the Central Bank of Nigeria took a number of actions to address the challenges including the exclusion of 41 items from the interbank foreign exchange market, introduction of flexible exchange rates among others. Even with these, the manufacturing sector still face a lot of challenges as a number of factories are producing below their installed capacity while some have closed down.’

He however acknowledged the efforts of the president, Dr Frank Jacobs on the directive to banks by the CBN to allocate 60 per cent of all available forex to manufacturers for the importation of raw materials as well as the release of $414 and another $500 to the manufacturing and agriculture sector.