By Moses Uwagbale
Mrs Kikelomo Longe, Ogun Commissioner for Commerce and Industry, has invited stakeholders in the paper industry to take advantage to the 1.2 million hectares of arable land in the state by investing in pulpwood plantation.
Longe made the invitation at the Lagos Chamber of Commerce and Industry (LCCI) Printing and Publishing Group webinar on Thursday.
The webinar had as its theme: “Revitalizing the Paper Industry; Challenges and Opportunities in South-West Nigeria.”
The commissioner noted that the paper industry had key components of inputs for many industries.
She said that the enormous gap between supply and demand in the industry necessitated the use of Kenaf in paper production due to it’s short gestation period.
Kenaf, a long fibre plant specie, which offers opportunity for multiple stock all year round, has a low gestation of 6 months and can be used to produce paper.
In her words: “Forestry is a key component of industrialisation and the southwestern landscape provides strong plantation capacity for kenaf.
“The paper industry contributes about 10 per cent to the Gross Domestic Product (GDP) of the state’s economy so it is important to us.
“The Ogun State Government is big on industrial hubs, bringing homogeneous groups together and supporting cluster approach of like businesses for infrastructural purposes,” she said.
Also, Mrs Funlayo Okeowo, Chairperson, LCCI Printing and Publishing Group, said the paper and allied products sector enjoyed some benefits following Nigeria’s independence and the attendant boom in the industrial sector in the early 1970s.
Okeowo said the the idea of establishing paper mills became novel on the strength of the volume of raw materials required to service the burgeoning paper factories.
She added that by 1986, the nation had three pulp and paper mills but their cumulative output of newsprint and industrial grades of paper at that time were largely underwhelming.
She stated that the poor performance of the paper mills could be attributed, in part, to insufficient supplies of long fibre pulp.
Okeowo said the option of sourcing foreign exchange to import the pulp was considered as an interim solution, with a designed programme that would enable Nigeria grow plantations of suitable trees as a long-term solution.
“While the former was embraced, the latter option was never pushed for implementation.
“However, the good news is, research has shown that the tree species needed for manufacturing woodfree bond paper can be grown in Nigeria with a gestation period of 6 months and not 12 years or more as formerly believed.
“This means that paper production in Nigeria is doable and we only need to share the knowledge across board.
“Nigeria paper industry need clusters of smart investors who can tap into the potential of raw material availability in the country.
“The major area of investment will be the aspect of machinery as the raw materials needed will be readily available.
“Investigation has shown that $10 million (N4billion) worth of machinery can produce 100tonnes of paper per day while $50million (N20billion) worth of machinery can produce 500tonnes of paper per day,” she said.
Okeowo pushed for sector-specific policy measures, collaboration in research of improved trees, and training of young individuals to reflate activities in the paper and allied product industry.
In his remarks, Mr Oluwaseun Jegede, LCCI Market Assessment Consultant, said the industry was currently at a tipping point with unprecedented demand but minimal local supply.
Jegede added that the industry was beleaguered by encroachment of aggressive foreign alternatives and underpinned by the dearth of the stimulus required to support the industry.
He, however, stated that a new chapter beckoned on the industry with opportunities to capture value in untapped areas within the ecosystem.
This, he said, could be achieved through investments in clusters of small sized mills to be served by locally sourced low gestation long fibre material- Kenaf.
He added that the absence of functional paper mills cost Nigeria N182billion annually.
“The Nigeria paper value chain has significant untapped value at the upstream in the input and milling segments.
“The gap is currently being bridged by importation with an estimated $1billion annually.
“Nigeria needs at least 50 small scale paper mills to address the milling gap.
“Once this is addressed, it could potentially result in a value capture of N182 billion per annum at a Compound Annual Growth Rate (CAGR) of 3.54 per cent, with a spectrum of areas for investors,” he said.
Also, Dr Abiodun Adedipe, Chief Consultant, B. Adedipe Associates Limited, said an efficient, safe and environment friendly paper industry would attract fresh investments from domestic and foreign sources.
Adedipe said the decline in graphic paper was balanced out by the growth in packaging, which he stressed had huge prospects for Nigeria.
He added that market prospects which existed in tissue, graphic paper, packaging paper, hardwood pulp and softwood pulp segments projected a two per cent increase in CAGR by 2030.
On the background of the projections for the Nigerian economy expected to grow by three per cent by 2021, Adedipe said the paper industry held good prospects for discerning investors.
“The paper mills with an installed capacity of 200, 000 metric tonnes needs to be revitalized and the capacity expanded to meet the domestic need of about 3, 000, 000 metric tonnes.
“The pulp and paper market size which was $348.83billion in 2019 is expected to reach $368.10billion by 2027.
“The industry’s historic linear value chains are giving way to more collaborative structures with players in and outside the industry.’’
