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Nigeria Loses N400bn On Importation Of Paper Products

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Due to the moribund state of the three existing paper mills in the country, Nigeria loses over N400 billion annually to importation of paper products, LEADERSHIP checks have revealed.

It was gathered that despite the much touted privatisation process of previous administrations, the three paper mills are not functional.

They are Nigeria Paper Mill (NPM) Limited located in Jebba, Kwara State; Nigerian Newsprint Manufacturing Company (NNMC) Ltd. in Oku-Iboku, Akwa Ibom State and Nigerian National Paper Manufacturing Company (NNPMC) Ltd., Iwopin, in Ogun State.

Managing Director/CEO of NNPMC, Ebun Braithwaite, who spoke with LEADERSHIP on phone, however, assured that the company is tackling the challenges head-on.

She said she was confident that with reversal at the company, activities which would impact positively on the host community and indeed the state will commence fully.

She noted that the problem of Iwopin Pulp and Paper Company has to be looked at within the larger context of the challenges facing the manufacturing sector in general.

She disclosed that Nigeria is losing over N400 billion from importation of paper products, basically from companies that were using it as their only raw materials.

“Companies like Bel Impex, makers of sub-brands of tissue papers in Lagos; PZ Industries Plc, Boulos Enterprises Limited and Epesok paper mill limited who are into envelopes and other paper manufacturing companies, are seriously complaining over high cost of importation which is affecting their production capacity”, Braithwaite said.

“The reality is that Nigeria is not yet in a position to manufacture paper in a commercially viable way, meaning without dependency on imported pulp. The country is probably about 10 years away from producing paper from pulp because we lack sustainable raw material resources, apart from the operational, technical and infrastructural challenges.

“As far as I know, there is no forest in the country that has pulpwood in sufficient quantities to meet the demands of the paper industry. The solution is for the state governments to begin to take a critical look at the use of our forests and to urgently address the issue of deforestation”.

It was gathered that of the three paper mills in the country, only the NPM and NNMC are producing, though at a low capacity, while the NNPMC is not functional at all.

As a result, 90 per cent of papers used to produce newspapers in the country are imported from other countries.

As at 1990, the Oku-Iboku paper plant was producing 37,581 metric tons of newsprint, reducing the country’s importation by 12.7 per cent.

But it was shutdown in 1993 before its completion and was consequently sold. The NPM, which used to produce 42,960 tons of kraft paper as at 1986, is the biggest of them all.

The NNPMC was established to produce fully bleached pulp for production of 68,000 tons of various grades of fine writing, printing and cultural papers on annual basis, but the plant from its pre-privatisation to post-privatisation era has so far produced for only six months.

LEADERSHIP learnt that with initial dependence on imported long fibre pulp, the mill was planned to produce long fibre pulp from Pinus species established in plantations in different locations in the country, but from inception, it has tottered ceaselessly due to equipment installation delays.

Despite the commissioning of the first phase of the mill in 1994, as a result of the joint venture collaboration with Wittermore Paterson Investment BV of Germany, no production took place.

Efforts to run the mill on imported raw materials on one of the paper machines stopped in 1998 due to lack of electricity supply.

Our correspondent observed that the buildings acquired have been renovated, painted and looking radiant, likewise the offices.

The grasses and lawns were well trimmed, while the administrative block and staff quarters have also been given new looks.

The workers, according to investigations are over 50, 30 of which are security guards, resuming at their duty posts everyday and collecting salaries and other allowances, even though the company is not producing anything.

One of the top officials of the company, who spoke with LEADERSHIP in private said that they never envisaged what they met on ground when they bought the company, noting that their major challenge is the obsolete equipment met on ground, coupled with unavailability of raw materials.

One key challenge faced by the investors is their inability to source long fiber trees, which is a major problem the plant may likely continue to face even after becoming fully operational, as they are totally dependent on imported long fiber pulp and chemicals, which might not help in reducing the cost of local paper products.

LEADERSHIP also learnt that core foreign investors, are always discouraged from partnering with the company whenever they come around to check what the company has on ground. “Whenever it occurs to them that raw materials are not readily available, they take to their heels.

“Another problem we are facing is electricity supply. We are not connected to the national grid; we are solely dependent on diesel. To start the engines, we’ll need four drums of diesel. Constant use of generator is definitely increasing our cost of production and hence the price of the products, thereby reducing the gains to the economy”, the official said.

When asked about how the company has been able to pay salaries and maintain minor operations, the source was reluctant, but later said it was from the owner’s purse.

But LEADERSHIP reliably gathered that monies used are generated from the sale of the obsolete equipment, a development that allegedly caused rancour among the children of the investors.

The source disclosed that the company, government and other stakeholders had a meeting recently and reached a compromise, even as he assurwd that by August the company would be fully operational.

The development is not going down well with experts, including the Manufacturers Association of Nigeria (MAN) and the Raw Materials Research and Development Council (RMRDC).

They ascribe the failure of the plant to faulty privatisation process and sabotage. Industry stakeholders, who also lent their voices, claim the privatisation of the three paper mills were handed to incapable investors who have little or no knowledge of the milling industry.

Kamorudeen Ogunlewe, an artisan who claimed to have been born in the community, lamented that the sorry state of the company has negatively impacted on the community, as its economic and social life has completely been paralysed.

He noted that years back when the company was fully operational, the community market always enjoyed good patronage from the workers, but since the problem started, the market has closed down.

He added that every last Fridays always looked like festive period, as the workers celebrated whenever they received their salaries.

“That has become a thing of the past. Our children no longer stay here; they move to others cities where they can get jobs. This development has reduced our population. Young men are moving out to where their services are needed. All the Ijebus were beneficiaries when it was functional, but now it has affected everyone,” Ogunlewe said.

Bernard Ike, a commercial motorcyclist, who blamed government for the development, appealed to both the state and federal government to encourage the company to start its operation.

“They need government support to reduce poverty in this area. We have not benefited from the present administration, yet they are generating more revenue from here and there is still more to be generated. Amosun should ensure there is conducive environment for investments to thrive”, Ike stated.

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