Local raw materials sourcing dipped in second half of 2021, says MAN

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Nigerian manufacturers have said the local raw materials utilization in the manufacturing sector dipped to 51.7 per cent in the period in the second half of 2021 from 56.5 per cent recorded in the corresponding period of 2020.

This they lamented indicated 4.8 percentage points decline over the period.

This and other statistics on the manufacturing sector’s performance were contained in the Second Half Economic Review 2021 released to the media recently in Lagos by the Manufacturers Association of Nigeria.

In the review attributed to the President of MAN, Engr. Mansur Ahmed the association noted that the decline recorded in the local raw materials utilisation declined by 1.3 percentage points when compared with 53 per cent recorded in the preceding half.

“Local sourcing of raw materials averaged 52.4 per cent in 2021 as against 57.5 percent in 2020, ” the document stated.

To further buttress this point, the review concluded that ‘Since the full opening of the economy following the lockdown associated with COVID-19 pandemic, local raw materials and other manufacturing inputs have been relatively scarce and costly.

“This has also affected the output of the sector negatively.”

The association also moaned that  manufacturing inventory of unsold finished products dipped to N224.63 bn in the second half of 2021 from N303.22 bn recorded in the corresponding half of 2020; thus, indicting N78.59 bn or 25.9 per cent decline over the period.

However, it stated that it increased by N9.8bn  or 4.6 per cent when compared with N214.83bn recorded in the preceding half.

“Inventory in the sector totalled N439.46bn in 2021 as against N577.61bn recorded in 2020,” the manufacturers added.

“The decline in inventory in the period under review was attributed to the recovering aggregate consumption following the gradual rebounding of economic activities as COVID-19 pandemic receded.”

Talking about manufacturing investment, the association said the sector recorded an increase in investment, stating that ‘investment in the manufacturing sector increased in the second half of 2021 to N73.18bn from N56.44 bn recorded in the corresponding half of 2020; thus, indicating N16.74 bn or 29.7 per cent increase over the period.”

It revealed that manufacturing investment totalled N217.22 bn in 2021 as against N118.52 bn in 2020.

MAN indicated that manufacturing investment has been gradually recovering following the return of economic activities as the issues of COVID-19 pandemic are continuously resolved.

“In the last one year, significant investment has been recorded in the Pulp, Paper, Printing & Publishing (6Ps) sector with the establishment of 5 new paper mills that are into recycling of waste papers to produce cartons; there is also the new BUA Group cement factory in Sokoto; and the new African Glass Limited factory that produced glass products.”

 

 

 

 

 

 

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