By Victor Ahiuma-Young
OPERATORS of Kewalram Chanrai Group, owners of Afprint Plc have accused the Federal Government of turning textile manufacturers to traders through policy inconsistencies.
The Deputy Group Managing Director of the former textile household name in manufacturing, Mr. Victor Eburajolo, lamented that the former textile manufacturing giant could not continue to stay in textile business because the company could not compete with cheap imported textiles.
Mr. Eburajolo, who is also a Governing Council member of the Nigeria Employers Consultative Association, NECA, said that besides the problem of power, Afprint like other textile companies, was confronted with high cost of raw materials; smuggling as the consequences of Nigeria’s membership of World Trade Organisation, WTO, and other bilateral agreements which allowed other countries to dump textile products in Nigeria at very cheap rate.
Speaking with Financial Vanguard, he said: “The problems of textile industry cannot be completely separated from the problems of the real sector. The real sector in Nigeria is on the decline. Let me say upfront that the economy is growing, that is what we are told.
But it is a jobless growth. We have more people on the street today looking for jobs than we had 10 years ago. This is because the real sector is shrinking. Why is it shrinking? It is purely because of the high cost of production.
When we are talking of cost of production, people look at just power. But I want to bring this to the notice of Nigerians that even if you fix power, what of the mode of transportation?
“This is one country in the world where you transport virtually everything by road. Who does that in other parts of the world? There is no way there will be good roads in this country because of our climate, especially down south, where you have all the ports.
You have to truck products up north and they go through these roads that are not constructed to take these heavy loads. So, if you look at it, we are losing at both ends. Now it is the rainy season, you can see what the roads have become. You also look at what we spend to generate our own power.
Most of the companies in the private sector that did their projections earlier in the year, these projections are all totally thrown overboard.
Most of them budgeted for cost of diesel and black oil at a rate they thought they could manage, but today, it is almost double. It is gradually wiping out the profits of these companies. I say this to let you know that we cannot really compete.
“You can also not close your borders because we belong to the WTO. All the bilateral agreements that we have signed, we must obey. At the time textile was in production say seven years ago, the base cloth that we print on, the one produced in Nigeria was costing us about 80 Kobo per meter.
The one coming from India was landing here with clearance and everything from the ports, with less than 50 Kobo. You can see the wide margin. Apart from that, there was also the cost of the cotton we were using.
The government abolished commodity boards about 20 years ago, cotton cultivation and all the cash crops cultivation, no standard, no guaranteed price for the farmer, all of them went up.
I think only about three or four months ago, the government came back to reinstate the commodity boards. If you look at the chemicals that we need for textile, you will be shocked that most of them are by-products of petroleum. For you to make man- made fibre, you need a peculiar acid and things like that.
The original design for our refining and petro-chemical plants was to produce these raw materials. Several years down the line, we are not producing. So, if you want to produce textile, everything that you need to produce is imported. How can you compete?”
Mr. Eburajolo said: “The at-titude of Nigerians to work is terrible. The Chinese today are coming out fast like India and the others. If you have worked with the Chinese, you will know that for them, work is a religion.
They have great attitude to work, but we do not have that. A typical Nigerian will do just enough to stay out of trouble. That cannot lead us anywhere. I am not just talking about the private sector alone, it runs through.
For those of us in the private sector, we try to make it look like the private sector is perfect. It is not. It is the attitude of the Nigerian to work. It is not my father’s work and that is why when they leave and set up their own businesses, they cannot change their attitude.
“Again, if you look at the cost of funds, banks are not interested in putting money into manufacturing that have long gestation period. They rather give to the traders.
They give to the traders who take their money for three or four months and pay back with interest. I do not blame the banks because they are not there to do charity work, but business and they must make money for their shareholders.
“The Bank of Industry that the government has set up is doing the best it can. The present Managing Director, I must say, is a hardworking person and she is doing her best. But there is a limit to what one bank can do.
So, if you look at all of these, where is the manufacturing sector? Look at a company like Dunlop, it has closed down, Michelin has closed down and textile is virtually gone. The real sector has a problem. Let us not rejoice that the economy is growing.
“The economy is not growing. Tell me one organisation that can tell the public the number of people in its employment. We do not have the statistics, let alone record them into age groups.
We do not even know how many people are graduating. We do not know how many people will go into labour market tomorrow. So, we moved out of textile with a lot of pains because we have to do business.
“It will surprise you to know that most of the machines of the textile mills that have closed down in this country were bought by Asians, shipped from Nigeria to India and other Asian countries and are being used to produce the same materials and send them back to Nigeria.
Those at the ports will say they are not coming in through the ports. But the ordinary man on the street does not care where the materials come from. If you travel by road through the West African countries and see the volume of textile materials that come into Nigeria, you will know that textile business is not viable in Nigeria.”