Nigerian Manufacturers Urge Investment to Revive Declining Paper Industry
Local manufacturers and industry stakeholders have emphasized that paper manufacturing could become Nigeria's second most profitable sector, akin to oil, due to its high global demand and profitability. However, they expressed deep concern over the sector's gradual decline over the past two decades, urging private investment to revitalize it.
Call for Investment and Clustering
Speaking during World Envelope Day, Layo Bakare-Okeowo, Managing Director and Chief Executive of FAE Limited, highlighted the opportunities in paper production. She stated that with an investment of $5 million, a paper mill capable of producing up to 20 tonnes daily could be established comfortably. Bakare-Okeowo advocated for forming clusters of such mills, which would not only meet domestic needs but also position Nigeria as a major exporter in the global market.
She revealed that a tonne of wood-free paper currently sells for about $1,300 on the international market, yet local mills remain overstretched, with shipments overbooked due to limited production capacity. According to her, the few local paper companies in Nigeria cannot meet demand despite their expansion efforts.
Challenges and Comparisons
Bakare-Okeowo addressed calls to go paperless in Nigeria, arguing that this is misguided, as advanced economies like Europe and America still use paper extensively, with their post offices operational. She noted, "They are using copier paper and envelopes in those places. Our own post offices here in Nigeria are no longer working because of a number of reasons." She used World Envelope Day as an opportunity to advocate for reviving Nigeria's post offices and supporting the paper industry.
Comparing Nigeria to other countries, she pointed out that Egypt has about 25 paper mills despite a smaller population, while Nigeria, with over 250 million people, has only three semi-paper mills. She decried the influx of Chinese investors into the sector, stating, "We have Chinese coming in to make papers in Nigeria. Why are they coming in? I heard two more are still trying to come into the sector meanwhile, our own local paper mills have been abandoned."
Industry Leaders Echo Concerns
Leye Kupoluyi, President of the Lagos Chamber of Commerce and Industry (LCCI), described the paper sector as a multi-billion-dollar industry that needs revamping. He reflected on its better state in the 1970s, 80s, and 90s, when mills like Ibokun, Jebba, and Iwopin contributed significantly to the economy. Kupoluyi emphasized the need to improve paper industries with modern technology, noting that paper remains crucial for storing value, including textbooks, notebooks, and research books.
He stressed, "We may be in the digital age but for store of value, our textbooks, notebooks, research books and so on are still printed. We cannot keep importing these things and contributing to foreign economies at the detriment of our own." This underscores the urgency for local investment and development to harness the sector's full potential and reduce dependency on imports.
