80% of profit goes into diesel costs
Despite the abundance of pulp and paper materials (fibrous and non-fibrous), Nigeria’s paper mills remain moribund, forcing the country to spend billions of naira on the importation of papers yearly.
Former chairperson of the Pulp, Paper and Packaging Group of the Manufacturers Association of Nigeria (MAN) and Chief Executive Officer of FAE Limited, Funlayo Bakare-Okeowo, pointed out that if nothing is done to revive the country’s paper mills and save the industry quickly, it would go under.
She stated this at the celebration of the company’s 50th anniversary and the announcement of World Envelopes Day, held at the company’s head office in Lagos.
She regretted that operating costs have continued to rise, putting production under intense pressure and increasing the cost of purchase for end users.
She noted that 80 per cent of the company’s revenue goes into diesel, as power supply remains non-existent.
“Special interest rates should be given to manufacturers; many manufacturers and businesses have left the country because of the harsh operating environment and if the government wants to stop this ugly trend, it is clear what must be done. Despite Nigeria having all the materials needed to make paper, it is sad that we have to import as much as 80 per cent of the raw materials we use because the paper mills are not functioning,” she said.
Wondering why the government abandoned the paper industry, she revealed that it could be a source of FX for the country, stressing that a ton of paper now retails for $1350 in the international market.
Adding that manufacturers get loans from the banks at 28 per cent interest or more, she said this is unsustainable for production.
“We need single-digit interest rates and special rates for FX to help us source raw materials. We used to pay monthly before, then it moved to weekly, then daily but now it changes as much as twice a day. We cannot continue like this,” she said.
