As a key player in the paints and allied products sector, Mr Adetunji Adeyanju, says there is need for government to address infrastructural deficit crippling the sector’s manufacturing capacity and competitiveness.
Adeyanju, Chief Executive Officer, Magnum Coatings and Renova, made the call in Lagos on Thursday.
According to him, the paint and allied products sector have the capacity to contribute up to one per cent to the Gross Domestic Product (GDP) of the economy if focused on and maximally harnessed.
He listed part of the challenges to include poor access to markets due to bad roads, under functional railways, port congestion, under generation of power and interference of too many government agencies.
These, he said, acted as restrictions on investments which, according to him, impacted negatively on the employment generation capacity of the sector.
“An average paint manufacturing plant would employ no fewer than 50 persons.
“There are so many markets where Made In Nigeria products are needed but due to transportation issues, a trip that should take us a day goes as long as four to five days.
“This affects the lifespan of our vehicles and also makes us waste a lot of money,” he said.
The Paint’s CEO said that access to raw materials for production also posed a great problem as the materials useful to the field of production were deposited largely in areas with security unrest.
Speaking on the tariffs for allied products, Adeyanju noted that the 30 per cent charges on import duty made the locally made products uncompetitive due to the high cost of operation.
He proposed improved logistics and technology to reduce time frame to clear goods and cut down corruption and interference of some regulatory agencies.
“Raw materials like titanium, gypsum of exportable quantities are deposited across the country but what we have is pop powder being imported yet we have abundance of it in Bauchi, Nasarrawa and the likes.
“Also on tariffs, I think the scanners are not reading rightly, and when the foreign products come in, it ends up making ours look more expensive after we have factored in cost of production,” he said.
On access to foreign exchange, Adeyanju lauded government efforts by providing Form Q by the banks.
He, however, pleaded that the conversion process from Yuan to Dollar and then to Naira be addressed to reduce conversion costs as experienced by businesses in Nigeria.
He also called for further decentralisation of power sector to state governments and the harnessing of renewable energy.
He advised ease of access to loans and grants, especially for equipment purchase to further boost the sector.
“Banks also need to reduce their interest rates as many businesses in Nigeria do not even make up to that.
“The CBN came with a five per cent loan but many of us have not been able to access it yet,” he said.
Adeyanju called for the empowerment of research institutes for paints technology and the need to resuscitate the refineries.
“Lots of solvents can be produced as a bye products during the fractional distillation of petroleum; this alone will crash cost of production of industrial paints by 50 per cent.’’
He urged the creation of an easy working environment so that local and international investors can be confident enough to bring in their plants to manufacture required materials.
This, he said, will improve the quality of goods produced locally and make Nigerians attracted to Nigerian products.
He advised a relief tax system to locally manufactured goods to make Nigerian manufactured products more competitive against the extra taxed imported products.
This, he said, will make the tax system adequate and encourage importers to invest more locally thereby creating more jobs for Nigerians.
“Nigeria is a consuming country with over 95 per cent of our needs imported as raw materials and assembled products.
“We have the population advantage to become a country to reckon in the world if we become a truly manufacturing country,” he said.
