Nigerian Manufacturers Decry Underutilization of Paper Industry Opportunities
Local manufacturers and industry stakeholders have voiced concerns over the gradual decline of Nigeria's paper manufacturing sector over the past two decades, emphasizing its potential to become a lucrative export industry comparable to oil. They are calling for increased private investment to revitalize the sector and capitalize on global demand.
Investment Potential and Global Market
Speaking during World Envelope Day, Layo Bakare-Okeowo, Managing Director and CEO of FAE Limited, highlighted the profitability of paper production. She noted that a paper mill capable of producing up to 20 tonnes daily could be established with an investment of $5 million. Bakare-Okeowo stressed that forming clusters of such mills would not only meet domestic needs but also position Nigeria as a significant exporter in the international market.
She revealed that a tonne of wood-free paper currently sells for approximately $1,300 globally, yet local mills are overstretched due to limited production capacity, leading to overbooked shipments. According to her, the few existing 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 continue to use paper extensively, with functional post offices. She lamented the state of Nigeria's post offices and urged efforts to make them operational again, emphasizing the importance of sustaining the paper industry.
She compared Nigeria's situation to Egypt, which has about 25 paper mills despite a smaller population. In contrast, Nigeria, with over 250 million people, has only three semi-paper mills. Bakare-Okeowo expressed concern over foreign investors, such as Chinese companies, entering the sector while local mills have been abandoned.
Historical Context and Future Outlook
Leye Kupoluyi, President of the Lagos Chamber of Commerce and Industry (LCCI), described the paper sector as a multi-billion-dollar industry that requires revamping. He recalled the better days of the 1970s, 80s, and 90s when mills like Ibokun, Jebba, and Iwopin contributed significantly to the economy.
Kupoluyi emphasized the ongoing importance of paper in the digital age, particularly for storing value in textbooks, notebooks, and research materials. He warned against continued reliance on imports, which benefits foreign economies at Nigeria's expense, and called for modernizing the industry with today's technology to boost local production and reduce dependency.
