The Manufacturing Association of Nigeria (MAN) and the Raw Materials Research And Development Council (RMRDC) have commenced discussions for collaboration to develop local raw materials for chemicals and pharmaceutical industries in Nigeria.
The Director-General, MAN, Mr. Segun Ajayi -Kadir said this in Lagos on Tuesday at a Sectoral Dialogue Session organized by the Chemical And Pharmaceutical Sectoral Group of MAN.
The theme of the dialogue is The Future of Chemical And Pharmaceutical Industry In Nigeria – The Role of RMRDC.
Ajayi-Kadir said that the collaboration would help the manufacturers in improving their raw material sourcing based on the information and research findings.
He lauded RMRDC’s keen interest in ensuring the sustainability of Nigerian industries through continuous and persistent research.
The director-general said that the RMRDC research was geared toward the localization of some essential materials needed for the survival of local industries.
“The topic of this dialogue is apt and timely, considering the effort of the government to encourage backward integration. In MAN, we call it resource-based industrialization,” he said.
In his lecture, Director-General, RMRDC, Prof.Ibrahim Doko, said that it was high time for investors in the manufacturing sector to partner with the council for the supply of competitive raw materials.
Doko, represented by Dr. Mohammed Buga, Executive Director, Mineral Materials Development Department, RMRDC stated that the giant strides recorded by RMRDC have demonstrated its resolve to actualize the mandate of local sourcing of raw materials for industrialization of the country.
He noted that the discussion with the chemical and pharmaceutical manufacturers was necessitated by issues of disruption in the global supply chain occasioned by COVID-19, the Ukraine/Russia War, and the competitiveness of the industry.
The director-general listed other issues that occasioned the dialogue including Presidential Executive Order five for industries to source their content locally, scarcity of foreign exchange, and the role of raw material origin for the Africa Continental Free Trade Area (AfCFTA).
“The time to source for local material can never be as compelling as now.
“With local development of raw materials, importation will reduce, there will be less pressure on foreign exchange, increase the profit margin for manufacturers, employment generation and improved overall condition of the economy.
“It is our hope that investors in the manufacturing sector would partner with the council for uptake of the developed technologies for sustainable supply of competitive raw materials for the sector,” he said.
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According to him, RMRDC developed the National strategy for competitiveness in raw materials and product development in Nigeria as part of efforts to make industries more competitive.
He noted that the strategy was geared towards a gradual reduction of imported raw materials and products that could be produced in the country in the short, medium, and long terms.
He stated that a committee that includes MAN, RMRDC, and other stakeholders would be established to facilitate the commercialization of the raw materials and bridge the gap between research, result, and the market.
The director-general said the committee would address the issues around commercialization, which include finance, regulatory issues, and incentives for manufacturers, among others.
In his remark, the Chairman, Chemical And Pharmaceutical Sectoral Group of MAN, Mr. Rotimi Aluko, commended the contribution of RMRDC to national development through publicity of research findings and other information relevant to local sourcing of raw materials for the development of industries.
Aluko said the collaboration between the association and the council was geared toward exposing manufacturers, particularly in the chemical and pharmaceutical sector to some research findings by the council to further boost manufacturers' business operations.
“We are mindful of the fact that sourcing forex for importation of raw materials has become like a nightmare for manufacturers in recent times.
“Hence, the need for the consideration of local sourcing of raw materials through the backward integration became a necessity,” he said.
According to him, if certain things, the right people, and enabling environment were put together, things would work favorably for the manufacturers and their business operations would boost.
Aluko noted that Nigerian manufacturers might not be able to compete with their counterparts in the AFCTA, following the overloaded cost on them.
“Republic of Benin has set up an Export Processing Zone at the border which is a clear declaration of intention to utilize the privilege of the trade agreement to infiltrate Nigeria's market massively with their products.
“It’s scary, but if we are able to have local material support and hopefully at a cheaper rate and if energy, several other costs, and multiple taxations do not negate the impact, then manufacturers can thrive, “he said.
Participants at the dialogue session demanded that the RMRDC must ensure that raw materials are readily available at an affordable rate to help manufacturers remain in business.
