Manufacturers to save freight cost as new product testing infrastructure underway

Many Nigerian manufacturers involved in export business are set to save freight costs on failed transactions, on the back of upcoming infrastructure which will enable them test the standards and quality of their products in the country before export.

Up till now many local manufacturers first export their products to destination markets where they are tested and verified suitable or otherwise. Where they are certified as not meeting the customers standards, the manufacturer incurs losses on freight cost and sometimes also product cost.

With the coming infrastructure for testing product quality however, local manufacturers will be able to ascertain the quality of their products before freighting, thereby making savings on freight and products which they can divert to other markets, where possible.

The move is expected to further push up non-oil exports, which totaled

$2.97 billion in 2013, and drive standard consciousness among local manufacturers, say analysts.

The introduction of the national quality and standards testing infrastructure has become necessary, owing to incessant cases of rejection of made-in-Nigeria products in some markets, which often forces manufacturers to bring back goods already exported at a huge cost to them and the Nigerian economy.

‘’This will ensure that when you export your product nobody will send them back here,’’ said Olusegun Aganga, Nigeria’s minister of industry, trade and investment, at the 42nd annual general meeting of the Manufacturers Association of Nigeria (MAN) held last Thursday.

Nigerian manufacturers are consistently making efforts to improve the quality and standards of their products. In 2013, manufacturers spent N159 billion on plants and machinery in the first half of the year (H1 2013) and N684.44 billion in the second half of the same year (H2 2013). Investment in furniture and equipment in H1 2013 was worth N83.05 billion, while that of H2 2013 totalled N161.4 billion.

This may have improved product standards and led to a fair acceptance of Nigeria’s products in other countries, as evidenced in the rise in non-oil exports  from $2.56 billion recorded in 2012 to $2.97 billion in 2013, analysts say.

In spite of all  the progress being made by local manufacturers, industry watchers say made-in-Nigeria goods still suffer rejection, owing to poor perception and awkward packaging, among others.

‘’You also have to talk about packaging and perception. The way other countries perceive Nigerians makes it difficult for them to use products like drugs manufactured here. Everything boils down to how we have carried ourselves so far, as Nigerians,’’ said Azubuike Okwor, immediate past president, Pharmaceutical Society of Nigeria (PSN), in an earlier interview with BusinessDay.

Data from the Nigerian Export Promotion Council (NEPC) show that the country’s non-oil exports in 2013 were worth $2.97 billion.

Exports to 15 members of the Economic Community of West African States (ECOWAS) within the period amounted to $375.34 million. On the other hand, the World Bank estimates that Nigeria’s total exports in 2012 were worth $97.46 billion, out of which 95 percent were petroleum and ancillary products. But South Africa, now second largest economy in Africa, reported $101.2 billion exports within the same year, where gold, diamonds, platinum, other metals and minerals, machinery and equipment were dominated exports.

Stakeholders say apart from poor packaging and perception issues, local manufacturers have been under the yoke of regulatory issues. First, they question multiplicity of regulatory agencies such as the Standards Organisation of Nigeria (SON), the Consumer Protection Council and the National Food and Drug Administration and Control (NAFDAC) as well as other federal and state agencies which impose various forms of taxes on them, adding that the new electricity managers must improve upon their services to industrial zones.

Businessday