According to the group, the sector has enormous potential to create multiple streams of jobs, alleviate poverty, light up the industrial landscape of rural communities with cottage industries; contribute to Gross Domestic Product (GDP) in excess of the current paltry 4.7 per cent and earn foreign exchange by way of genuine exports in a
sustainable manner.
The group explained that the global beauty market has in the last two decades witnessed dramatic changes fuelled by socio-cultural transformations while contributing to robust economic growth both in the developed and the emerging markets.
With foreign goods dominating the local markets, the group expressed dissatisfaction on the importation of foreign made cosmetics into Nigeria which has been described as a great disservice to the nation and a big drain on foreign reserves.
According to Research and Markets, a Dublin base Market research outfit, the personal care products industry clocked revenues worth $379 billion (about N75.8 trillion) in 2013, which is anticipated to grow to about $630 billion approximately N126 trillion in value by 2018 worldwide.
However, global beauty care market registered a steady Compound Annual Growth Rate (CAGR) of 4.5 per cent through 2013 to 2018.
Speaking at the yearly general meeting of the group in Lagos, Chairman, T&C, Ipong Umoh said cosmetics and toiletries products are no longer luxury items as being regarded in the country.
“It is big business that is capable of lifting Nigeria up as a viable economic entity if allowed to thrive the way it should. The time is now for the government to see T&C manufacturers as one of the most patriotic sub-sectors in the country and its products as tools to survive the economic downturn.
He stated that in Africa, countries like South Africa and Nigeria, the two biggest economies, have shown very strong growth in the last 10 years.
“According to Euromonitor, in 2012, South Africa and Nigeria were the biggest personal care and beauty markets in the continent valued at €2.97 billion (N772.2 billion) and €1.57 billion (N408.2 billion) respectively and each holds out a promise to achieve stable and continuous growth in the years to come.
“These two sub-Saharan countries have been targeted by the three biggest beauty players; Unilever, L’oreal and Procter & Gamble (P&G) with very ambitious Objectives. In South Africa, although there are multinationals who are very active and have built functional factories, the indigenous cosmetic companies have made significant
contributions to this growth.
“In Nigeria, the story is different as major beneficiaries of this growth are the foreign-made cosmetics imported mainly from South Africa, Asia and other ECOWAS countries. These foreign products occupy almost all the major shelves in the open markets and supermarkets and are estimated to have a market dominance of more than 90 per cent”, he
said.
On the dominance of imported goods in the markets, he said: “It is no news that there is acute scarcity of foreign exchange for procurement of raw materials and machinery due to the declining earnings from crude oil”.
However, he said, the Central Bank of Nigeria has reached swiftly to ensure that items that can be manufactured in Nigeria do not have access to the official forex window
“Efforts to sift the wheat from the chaff remain the subject of on-going discussions between MAN and CBN. We in T&C wholeheartedly support the steps taken by the CBN and we see the dwindling price of oil in the international market as a blessing in disguise.
In spite of the laudable strides, he highlighted the challenges faced in the personal care industry to include, high cost of manufacturing, epileptic power supply, overbilling/fixed and estimated charges by DISCOS, cumbersome clearing procedure at the ports, lack of government patronage, high and discriminative tariff structure, global
listing policy, and unfavourable regulatory environment.
While recognizing the challenges, he said government needs to support and encourage its members by way of access to single-digit and long term loans to increase their research and development initiatives in order to continue on the path of progressive but sustainable local raw material substitution.
