How We Built Africa’s Largest Tyre Market Without Banks’ Support
Nestled in the heart of the International Trade Fair Complex in Badagry, Lagos, the market, known as Africa Tyre Village, The Guardian learnt, receives all tyre shipment into Nigeria through Lagos ports — as local production collapsed since 1980s — and boasts of all types of the product in abundant supply.
It reportedly offloads about 30, 40-feet containers every week and serves the entire Nigerian tyre market, with customers stretching as far as Maiduguri, Onitsha and Kano.
The market, run by the Association of Nigeria Tyre Marketers (ANTM), is the remnant of a once thriving tyre manufacturing industry, which was run aground by failing electricity supply in late 1980s, chief among other operational challenges. The tyre companies have since relocated to other African countries. Though the rubber plantations, which served as livewire to the companies, are said to be quarantined in different parts of the country, it is still uncertain when the industry would come alive again.
But, unperturbed by the circumstance, the marketers have cashed in on the exit of the manufacturers to look for supplies elsewhere, majorly in Dubai and China, and are supporting Nigeria’s transport system, where almost all haulage and logistic enterprise leverage the roads, which consequently assures a deep appetite for tyres and trucks. Nigeria’s high vehicular density also adds to the need for more tyres.
When Nigeria was a tyre manufacturing hub, our products were the best you could find around. Then the Babangida administration around 1983 supported Dunlop with some money and they produced a product known as Dunlop elite, which was arguably the best tyre in the world at the time. But the company collapsed due to lack of power. Power is the main production input in tyre manufacturing. If generators were used in the production, the tyres wouldn’t be of acceptable quality. The best tyres are manufactured when there is direct supply from the public source
When The Guardian visited the ‘village’ recently, truckloads of tyres of different sizes were being offloaded into shops and traders made brisk business, as apprentices cleared orders. Though some shops were locked in the more than 1000-lockup shop capacity arena, those open for business were stocked to the brim and were attended to by young, energetic traders.
Traders say though the roads leading to the market may be bad, they now mostly take orders via phone calls as they have built a relationship with customers from their days at Lagos Island.
The secretary of ANTM, Lawal Sefiu Olaiya, said that the association felt that it was unsafe to continue trading at its former site at Lagos Island, which was a street market and wasn’t conducive for customers. He said there was little space and apprentice graduate every year and wouldn’t be able to fit into the small space in the heart of Lagos.
“At a point, we decided to get a permanent site, where will have everything we need, including parking lots and loading spaces. After some trials and errors, we got this place and started building it,” he said.
According to him, “we didn’t seek assistance from any bank; we built it from our sweat. There are a total of 1000 lockup shops and about 30 personal plazas, owned by individuals. The personal plazas surround the shops. There are different phases too. There is the unity block, which was the first to be built and has about 432 blocks. When we finished the first phase, many of our people the leaders of the association at Lagos Island moved to this place so as to fast track the development here. When we finish the second one, we expect many more of our members to move here.”
He said the association allocated some 500 shops to its members, as well as, stakeholders and investors in August, explaining that the investors bought shops and gave them out to people on rent. “Most of them are not members, but when they heard we were building this, they invested. Some of the locked shops in the market belong to investors who are looking for people who would rent the shops,” he said.
Asked how the traders sourced their wares, he said the products were imported, as the two local tyre manufacturing companies, Dunlop and Michelin, closed shop a long time ago, because of epileptic power supply in the country.
“Dunlop has moved its machines to South Africa and brings tyres to the country. Michelin has moved to neighbouring countries, such as Ghana, Algeria and others. There is a Michelin Distributor Store (MDS) in Nigeria, where distributors in Nigeria go to buy their products. They still have their office here where they store tyres. It is just that they don’t produce here anymore.
“The same thing applies to Dunlop. Whoever wants to be their dealer goes to their office at Ikeja, where they have a store. For now, there is no tyre production in Nigeria, maybe there might be changes as we are experiencing improved power supply in the country, but at the moment there is nothing like that,” he said.
Continuing, he said, “We import our wares from China. We used to go to Dubai because it is a free trade zone. Another reason for going to Dubai is because their government subsidizes their goods, so they come cheaper. Some of our people go to Dubai to buy assorted goods, that is, tyres of any brand. But when we go to China, it is the exact product we order that we get. Most of tyres in the market are from China. But, at the same time, we have some authentic tyres, such as Bridgestone, Firestone, Michelin and Dunlop.”
On whether the premises qualified for the label as Africa’s largest tyre village, he said it well deserved the tag because of the volume of wares and the reach of the market.
He said, “This place, indeed, is Africa’s largest market because all Nigeria-bound containers bearing tyres berth and are cleared in the ports in Lagos. They are brought to this market to offload their wares. In a week, we offload more than 30 40-feet containers. It is from here that we distribute to our people in Onitsha, Kano, Maiduguri, Kwara State and others. We do waybill to them and everybody has their customers in these places. This is the centre of tyre business in Nigeria.
But the association is not without challenges, as they have had to lock horns with some people our control of Nigeria’s tyre market
According to him, “There was a time some so-called expatriates formed themselves into a group and went to the Federal Government seeking for concessions to manufacture tyres in Nigeria, on the condition that they would be allowed to import tyres freely for some time.
They just needed import waiver. At that time, we wrote to the government on the consequences of such action. We told them that if expatriates get hold of the market, we would be kicked out of business. I think the Federal Government saw reasons with us and stayed action on the matter.”
Noting that the possibility of tyre manufacturers returning to the country depended on how fast government would revamp power supply in the country, he said the major companies still had their rubber plantations quarantined and should resume production if the coast is clear and machines are brought back to the country.
According to him, “When Nigeria was a tyre manufacturing hub, our products were the best you could find around. Then the Babangida administration around 1983 supported Dunlop with some money and they produced a product known as Dunlop elite, which was arguably the best tyre in the world at the time. But the company collapsed due to lack of power. Power is the main production input in tyre manufacturing. If generators were used in the production, the tyres wouldn’t be of acceptable quality. The best tyres are manufactured when there is direct supply from the public source.
“They preserve the rubber plantations. Michelin’s plantation at Port Harcourt and Ore are under preservation. The ones they use for production in other countries are tapped from the plantations here. This is because the rubber sourced from Nigeria is better than those gotten in other African countries. Tomorrow, if these companies want to resume production, they can just go back to the rubber plantations. But, first, we have to fix power in Nigeria.”
He said there are huge opportunities for tyre trading in the country, stressing, “the market for tyres is still very large in Nigeria due to the decay in rail transportation. Ordinarily, heavy equipment ought to be transported via trains. But since the infrastructure is lacking, they have to be transported on road, which means even the trailers that transport them need tyres to run.”
He noted that the success of the business was as a result of the transparency of the association leaders, who had, over time, fought for equity and fairness in dealings with all members, irrespective of tribe or association.
“It was a result of transparency and diligence that we are here today. Many people started projects at this park before us. Today, we are ahead of them. We are sub lessors here. The concessioner, who got the land from the Federal Government, was very cooperative when he gave us this location. And we were very open with our members, all of whose contributions was used to build this place. Whenever anyone completes their contribution, we give them their allocation letter and when the shop is ready, we hand it over to them. We distributed the lands by balloting,” he added.
One of the traders, Iloh Nicholas, who is a distributor for a company, said the move to Trade Fair complex was a wise one for the association and that sales have been impressive since his coming to the new site.
According to him; “Business has been good. We are selling, as would a new market. In fact, we are surprised at our sales so far.”
He noted that though customers complain of bad roads, he said they got around the challenge by deploying their own vehicles to deliver supplies.
Another trader said she got a shop when the association moved to the complex and has not been disappointed with the pace of sales.