A new report has put the compound annual growth rate (CAGR) for the plastics subsector of the Nigerian economy at 7 per cent over the next 10 years.
The report published yesterday by Mckinsey & Company said the per capita consumption of plastics in Nigeria has grown by about 5 per cent annually over the past ten years, from 4.0 kg in 2007 to 6.5 kg in 2017 and is estimated to be 7.5 kg in 2020.
It also said the country’s plastics consumption has grown by 7.8 per cent annually over the past ten years, from 578 kt in 2007 to 1.229 kt in 2017 and is estimated to be 1.533 kt in 2020.
With a further disclosure that the demand for polythene material in Nigeria currently stands at 80m metric tons representing a 30m metric tons increase over a 5 year period, the report
said while there are challenges peculiar to the manufacturing industry, which increase the cost of production like irregular power supply, delays in clearing goods at the ports, logistical issues (transportation of goods is mostly by road, with many roads being in a dilapidated state) and multiple taxation at the federal, state and local government levels,the sub sector remains on positive trajectory with great potentials for more investments.
It also disclosed that the industry has seen a 40 per cent expansion in demand for packaged goods over the last five years despite the aforementioned problems.
According to the report, growth in the fast moving consumer goods (FMCG) industry sector has been largely driven by the increasing sophistication of the Nigerian middle class.
While underpinning the rapid growth in the FMCG sector as a major driver, the Mckinsey report said companies are also increasingly packaging commodity- based products in household plastics but added that “Plastic products used for packaging will eventually become less common as new technologies and growing industrialisation are shifting to more advanced and sophisticated means of packaging.
“Nonetheless, other uses of plastics aside from packaging (e.g. domestic ware) will continue to experience growth as consumer disposable incomes continue to rise.”
The report however, was quick to point out that supplying Nigeria’s growing plastics industry would remain a one-firm operation for some time despite particularly promising growth of the plastic packaging industry.
Particularly, it noted that locally-owned Quantum Petrochemical Company Limited would likely commence operations by Q1 2018 , at its $1.5 billion methanol plant in Akwa Ibom State.
“Workers broke ground on the 150 hectare facility three years ago. When completed, it will produce up to 3,000MT of methanol per day at full capacity,” it stated.
The new plant, it continued, would double the number of firms currently involved in polyethylene (PE) and polypropylene (PP) production, which is key input for the country’s flexible packaging manufacturers.
Currently, according to the Raw Materials Research & Development Council of Nigeria, local PE and PP supply is dominated by Port Harcourt-based Indorama Eleme Petrochemicals Limited.
It also said In addition to the pending arrival of Quantum Petrochemical, domestic conglomerate Dangote Group has also begun work on an $18 billion project in Lagos which will bring more than double current capacity.
“Once it is completed in 2019, the plant will have a nameplate capacity of 780,000MT of PP and 500,000MT of PE. The complex will also include an integrated single-line oil refinery and fertiliser plant.”
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: firstname.lastname@example.org
WORLD14 hours ago
White House Unrest Deepens After Omarosa Released Tapes
NEWS16 hours ago
Gov. Tambuwal Promises To Pay Workers’ Salaries Before Eid-El-Kabir
FEATURED4 hours ago
Odili Finds New Love At 70
NEWS5 hours ago
2019: Obasanjo, Defections Can’t Stop Buhari – Tinubu
NEWS2 hours ago
Why We Will Not Change Name Of PDP –Sule Lamido
NEWS3 hours ago
Semblance Of Saraki, Akpabio Defections
NEWS17 hours ago
Cryptocurrency Crashes, As Bitcoin Drops
BUSINESS22 hours ago
Fashola Confirms GenCos’ Implementation Of Eligible Customer Policy