Manufacturers blame poor profitability on Inadequate power supply
They, therefore, canvassed a prompt reversal of the trend to increase production capacity and profitability in the manufacturing sector.
Speaking with reporters on the sideline of events marking 30 years of Lubcon Lubricant Manufacturing And Blending Company in Ilorin last Thursday, its Group Managing Director, Adesoji Fagbemi, said the challenge of poor electricity supply has impacted on prices of commodities and profitability negatively.
“There is electricity power challenge affecting manufacturing industry in the country. The capacity of electric power being generated is not adequate. We share power among other sectors of the economy. It is even so difficult to achieve eight hours of supply daily.
“We spent more than N93 million in a quarter on diesel because we run several manufacturing points. We had to purchase a 1,000KVA generator. We also expended about N157 million on 33KVA dedicated line to get 23 hours power supply by co-opting other neighbouring companies just to cope with the huge expenses. Thus, profitability is affected,” he said.
He added that the company has a plan to invest in alternative energy to tackle power challenges in the country in partnership with the consortia of organisations on gas production in Ajaokuta gas park.
“Hopefully, when operational, it would solve power generation and distribution in the country and boost trade and investment, especially among Micro, Small, and Medium Enterprises (MSMEs) in and around the state,” he added.
He disclosed that the firm was also planning to go into agriculture to serve as a platform for agro-processing and export for MSMEs.
“We have been supporting agriculture before now as we supply lubricants for tractors, machine tools, etc.,” he added.
Fagbemi, who urged security operatives to improve on their logistics to tackle economic saboteurs who engage in adulteration of lubricants and engine oil in the country, said that regulators were sometimes incapacitated to battle people behind adulteration.
Besides, he appealed to commercial banks to assist manufacturing industries with adequate financing, describing sourcing for funds from banks as cumbersome.
In his comments, the Managing Director of the company, Mr. Taiye Williams, said the firm has been producing top-notch lubricants for 30 years, adding that the company now supplies to countries like Ghana, Niger, Benin Republic, South Sudan, Liberia, and Ethiopia.
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