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‘Local chemical production to check $1.4b importation’

By Femi Adekoya
11 March 2020   |   3:35 am
With the importation of chemicals rising to $1.4 billion in 2019, according to World Bank estimates, local producers believe that a backward integration exercise will address heavy dependence

With the importation of chemicals rising to $1.4 billion in 2019, according to World Bank estimates, local producers believe that a backward integration exercise will address heavy dependence on importation and enhance job creation.
  
Similarly, operators believe that such local investments will help in saving foreign exchange and increase value-chain activities among firms in need of industrial chemicals.
 
Announcing its decision to commence the first chemical production plant in Ibeju Lekki, Lagos, at the weekend, the Managing Director/ Chief Executive Officer (CEO), Blue Seal Energy Group (BESG), Doyle Edeni, disclosed the firm’s investment is expected to bridge the massive importation of chemicals into the country and increase the number of local talents.

  
Edeni, added that the first phase of the 35,000 metric tonnes per annum chemical plant would cost about $12.5 million with a potential to expand.
  
Prior to the decision of the firm to set up a production plant in Nigeria, he said the company imports from its parent firm in Houston, USA, spending at least $5 million dollars yearly on chemicals importation.
 
According to him, there is a poor perception about locally produced goods even when they are of higher quality.
  
He lamented that the uncertainty in the country’s business environment has forced many of its competitors to shut down, adding that the inability to project the industry needs for chemicals, especially for refineries and other petrol chemical plants has further compounded their woes.
   
He added that regulations on the importation of chemicals have become stringent as a result of security challenges in the country, while storage of the chemicals is equally a disincentive due to the short shelf life and cost of disposing expired products.
  
The concerns, according to him, necessitated the need to embrace import substitution.
 
‘‘You know chemical is a product that has a shelf life plan and because of that, you must plan very well. Sometimes, while your product is on its way to the country, some companies or refineries would have shut down operation, due to power issues and other challenges. By the time they arrive and stay for some period longer than necessary in the warehouse, they would have expired and lost quality”, he said.
 
According to him, the associated cost required to dispose these chemicals had become a huge burden because such could not be dumped into the environment without detoxifying same.

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