Over 100,000 workers in the chemical and non-metallic products sub-sector have lost their jobs in the past year due to the economic hardships faced by multinationals, medium, and small-scale enterprises in Nigeria.
This situation continues to worsen as more companies are on the verge of shutting down or are operating at low capacity, The PUNCH has learned.
The Chemical and Non-Metallic Products Employers Federation (CANMPEF), which once boasted a membership of over 100 firms employing about 350,000 people nationwide, now reports that more than 50 companies have closed down, with four others on the brink of collapse.
According to a Vanguard investigation, the remaining firms are operating at only 20% of their capacity.
The Executive Secretary of CANMPEF, Mr. Olorunfemi Oke, expressed deep concern over the closures, attributing the industry’s decline to unfavorable government policies.
He said, “The challenges confronting the sector are numerous, including the floating of the naira, a depreciating currency, volatile exchange rates, the removal of fuel subsidies, high import duty costs, high-interest rates, unreliable power supply, inadequate gas supply, poor road conditions, multiple taxations, and a high inflation rate over 34 per cent.”
Mr. Oke elaborated on the dire situation by stating, “The effects of these socio-economic challenges on manufacturing companies are enormous.
Most of our member companies are just managing to survive.
We cannot access forex for the purchase of raw materials and machinery.
High energy costs have resulted in high production costs, and unreliable power and gas supply disrupt production schedules, increasing operation costs.”
The sub-sector produces a wide array of products including medicals, pharmaceuticals, cosmetics, detergents, cement, glass, and fertilizers, among others.
Prominent companies such as Glaxo SmithKline Beecham, Procter & Gamble, and Mega Plastic Nig Limited are among those that have shut down.
Others, like Unilever, PZ Industries, Prime Pack, and Reckitt & Benckiser, are on the verge of shutting down operations.
Kimberly-Clark, known for producing Huggies diapers and sanitary pads, is also facing a potential shutdown due to high energy costs and reduced customer demand.
The company has already reduced shifts and implemented cost-cutting measures to stay afloat.
The Managing Director of Voda Paints Limited and Vice President of CANMPEF, Mr. Rotimi Aluko, highlighted the economic hardships faced by the sector, stating, “Unreliable power, unstable currency, difficulty in doing business, steadily rising inflation, insecurity, multiple taxation, and poor infrastructure have all contributed to the struggles of the chemical, leather, and food sectors.
Currency tweaking, removal of petrol subsidies, and floating of the naira have compounded the pressure on industrial operations.”
Mr. Aluko emphasized the need for government intervention, saying, “Government action is crucial.
It starts with how the government views and treats manufacturing.
If manufacturing is taken as the most strategic value-adding local content economic weapon, Nigeria will transform into a leading nation.
The government should step forward to help get the necessary building blocks in place and improve the business environment.”
The impact of the economic downturn is felt across the sector, with companies like Linda Manufacturing Company, which was producing synthetic hair attachments, shutting down and leaving many young girls unemployed.
The potential closure of Kimberly-Clark’s $100 million factory in Ikorodu, which was commissioned by former Vice President Yemi Osinbajo, further underscores the severity of the situation.
Mr. Oke expressed concern over the job losses, noting, “As a Nigerian, it is sad and frustrating to talk about my fellow countrymen and women losing their means of livelihood.
A lot of people have been thrown into the job market. The figure is huge.
We are talking about direct and indirect employment, comprising suppliers, distributors, drivers, contractors, and traders among others.”
In response to the crisis, the National Secretary of the National Union of Chemical Footwear Rubber Leather and Non-Metallic Products Employees (NUCFRLANMPE), Joseph Dada, pleaded with the government for immediate intervention.
He stated, “Our industrial sector has been finding it extremely difficult to operate smoothly for the past two years.
Bad government policies have negatively affected the running of our sector.
Many industries have relocated to other African countries where they can do business with ease and maximize profit.”
Mr. Dada further added, “The issue of unsustainable tariffs and high fuel costs must be addressed immediately to save our industries from total collapse.
The government should create an enabling environment for industries to have access to foreign exchange from the Central Bank of Nigeria for manufacturers to import raw materials.”
As the industry grapples with these challenges, stakeholders are calling on the government to provide relief by reducing import duties for essential raw materials, improving energy supply, and addressing infrastructure deficiencies.
The CANMPEF scribe emphasized that urgent action is needed to stop manufacturing companies from shutting down, increase employment, and reduce insecurity in the country.
In conclusion, Mr. Aluko remarked, “The government should declare a clear form of emergency in the manufacturing sector and provide subsidies on manufacturing inputs.
The gains will be manifold, including employment for our youth and a reduction in social and security costs.”
