By Prince Okafor
The absence of a regular power supply from the national grid is increasing costs for some manufacturers of plastic products.
Shyam Barakale, the general manager of Pentagon Plastic Industries Ltd (PPIL) said one of the biggest challenges facing plastic manufacturing outfits is the cost of providing their own power.
“If regular and consistent electrical power can be sourced from the grid, we can easily concentrate on our core activity which is plastic manufacturing rather than investing in building and maintaining power plants,” said Barakale.
This lack of regular power compelled the company to invest in its own power source relying on Clarke Energy, a multinational specialist in distributed power generation solutions, to set up its own power.
Clarke Energy, provided a 1.8MW gas power plant for PPIL which the company purchased and regularly maintains.
“With Clarke Energy, we have a partnership that goes back to 2014. The company carried out a technical study and recommended the deployment of a gas power plant. It has been serving us well since 2015.
“The gas generating set comes at a very high cost but it has also given us significant cost savings and increased our production efficiency,” said Barakale.
More specifically, the leadership of both companies enjoys an excellent relationship, which has helped to facilitate a seamless scheduled 30,000hours overhaul maintenance on their 1.8MW single module Jenbacher gas engine last year since its commissioning.” Yiannis Tsantilas, the MD of Clarke Energy, said
Pentagon Plastic Industries Ltd (PPIL), which was established in 2002, part of the B. L Chainrai Group, is a leading manufacturer of high quality, cost-effective plastic housewares, garden furniture, and rigid packaging solutions in Nigeria.
PPIL operates two state-of-the-art manufacturing facilities producing over 200 different types of plastic products and generating over $28million in revenue.
Apart from power plastic manufacturers also contend with the lack of feedstock for producing high-quality plastic products.
According to Barakale, plastic feedstock, a byproduct of the petroleum industry refining process is a very capital-intensive venture and due to Nigeria’s low refining capacity, it has to source raw materials from outside the country.
“We have to invest a lot in raw material sourcing and this involves sourcing for foreign exchange which makes us vulnerable to volatile exchange rates. This adds to production costs and often results in delays,” said Barakale.
Looking at the volumes of raw materials imported into the country, you would see that if Nigeria has a bigger refining capacity, a lot of the foreign exchange paid to import them would be saved, Barakale said.
Barakale said that PPIL in its 19 years of operation has contributed to the growth of the economy including employing about 500 Nigerians and its export of quality plastics contributes to foreign exchange earnings for the country.
PPIL has established a strong network of distributors located strategically throughout the country. These are complemented by its distribution arms in Kano and Delta states.
According to Barakale, the Nigerian market presents many opportunities for plastic manufacturers with its large population and strategic location to serve other markets in Africa.
PPIL says it ships its products through its distributors to several African countries including Benin, Chad, Cameroon, Burkina Faso, even as far as Sudan and this export market represents 20 percent of the company’s distribution network.