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Nairaland Forum / Nairaland / General / Business / Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% (4404 Views)
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|Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by postbox: 5:45am On Jun 14, 2018|
The results of backward integration projects of Nigerian manufacturers are trending positive, with numbers showing a significant rise in local raw materials sourcing since the second half of 2016.
According to the latest report released by the Manufacturers Association of Nigeria (MAN), local input sourcing in the manufacturing sector dived to 65.70 percent in the second half of 2017, from 60.72 percent recorded in the first half period.
In the second half of 2016, the percentage of local sourcing was 59.98 percent as against 46.3 percent recorded in the first half of the same period.
BusinessDay independent checks show that the spike in local sourcing in the second half of 2017 was driven by aggressive activities of Dangote Group, Flour Mills of Nigeria, Nigerian Breweries, Nestlé, Unilever, and FrieslandCampina WAMCO, Dufil Prima, Lafarge Africa, PZ, among others.
“The upward movement was linked to the implementation of resource-based industrialization and backward integration policy as contained in Nigeria’s Industrial Revolution Plan (NIRP),” MAN says, in its latest economic review released to BusinessDay.
Resource-based industrialization is the use of locally available resources, such as raw materials, manpower, and natural resources, to grow domestic production. On the other hand, backward integration occurs when a company buys its suppliers or internally produces segments of its supply chain.
According to the report, industries in Kano Bompai and Imo/Abia industrial zones beat those in Lagos, Ogun, and others in local raw materials sourcing within the period under review.
Imo/Abia zone recorded 73.6 percent as against 51.7 percent in the corresponding half of 2016. Similarly, Kano Bompai’s local input preference was 75.5 percent, while Ogun zone stood at 68.7 percent as against 68 percent recorded in the corresponding period of 2016.
Apapa gave a good showing, recording 70.7 percent in the period as against 54 percent reported in the corresponding half of 2016. Local raw-materials utilization increased in Ikeja zones in the review period rose to 63.2 percent as against 61.3 percent in the corresponding half of 2016. However, Apapa’s and Ikeja’s are still lower than Kano Bompai’s and Imo/Abia’s.
Harangued by foreign exchange crisis of 2016, manufacturers are now getting their raw materials from farmers and subsidiaries, while sourcing packaging materials from other local firms.
The personal care manufacturer Unilever Nigeria is aggressively pushing its local input sourcing towards 100 percent.
“Unilever has achieved over 90 percent in local sourcing of packaging materials. The aim is to achieve 100 percent by the end of 2019 and overcome the current challenges of local vendor’s capacity to meet up with global best standard,” Thomas Mwanza, procurement director, Unilever West Africa, at Manufacturing and Equipment, Nigerian Raw Materials Expo held in Lagos recently.
“In the agro-allied sector, Unilever is partnering with intermediary companies, for the supply of cassava and starch,” Mwanza he said.
Nestlé Nigeria is sourcing 80 percent of its maize, sorghum, millet, soya, cassava starch, cocoa powder, palm oil from more than 41, 600 local farmers and processors scattered across the country.
“The Industry has huge needs and we must help farmers improve their yields to meet them. To achieve real success with connecting farmers to industry, a 360-degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” said Mauricio Alarcon, CEO of Nestlé Nigeria Plc.
Dangote Cement is sourcing over 80 percent of its limestone and gypsum locally, while Dufil, makers of Indomie noodles, sources its palm oil and maize domestically.
Flour Mills sources palm oil from its subsidiary Agri Palm Limited at Ugbogui and Iguiye near Benin City in Edo State.
Dairy maker FrieslandCampina WAMCO is sourcing some of its raw milk from farmers in communities in Oyo State.
As of 2017, over 70 farming communities, including 962 women, supply raw milk to FrieslandCampina WAMCO on a daily basis, BusinessDay found.
“The capacity the company has there is even more than what I can supply. Things have dramatically changed for us dairy farmers,” Mayosore Olatunde Rafiu, CEO of Genius Integrated Farms, one of the milk suppliers in Iseyin, told BusinessDay.
Nigerian Breweries is already substituting barley for sorghum sourced locally from an agriculture-based firm called Psaltery Nigeria Limited.
More than 250,000 farmers spread across several agronomic zones in the North are directly or indirectly involved planting sorghum for the country’s biggest brewer, BusinessDay understands.
4 Likes 1 Share
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by maryjan8(f): 7:24am On Jun 14, 2018|
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by masterfactor(m): 7:25am On Jun 14, 2018|
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by flexyrule(m): 7:26am On Jun 14, 2018|
Now that's how you build a country.
Op. The picture you attached to your post is the production line of Alomo Bitters. Am sure they source for their raw materials locally 100%.
5 Likes 1 Share
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by saintol(m): 7:26am On Jun 14, 2018|
Nice one. I hope it increases more. It will improve the living standard of some people and encourage more people to venture in agric business.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by hilroy: 7:28am On Jun 14, 2018|
All I see is business opportunities from this news
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by Nobody: 7:29am On Jun 14, 2018|
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by ehinmowo: 7:31am On Jun 14, 2018|
Nigeria will always move in circle as long as d F-govt is enmeshed in religious and tribal affairs.
You cnt tamper with sensive macroeconomic stuff and expect God to bless u.
Africa is still at d survival level only gud at procreation
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by olahero(m): 7:48am On Jun 14, 2018|
Nice one, we will soon get there.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by joedams: 7:53am On Jun 14, 2018|
This kind of news makes my heart jolly. By God's grace, we would get there.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by Rickyuzzy(f): 7:55am On Jun 14, 2018|
The wise ones will tap into this very fast. I have a friend that went into mechanised rice farming in Benue as soon the Agricultural minister rolled out the policy framework for rice farming in 2015. He quit his Job from cornerstone Insurance PLC.. took some loans and relocated from Lagos to Benue. Now the dude is rolling in millions. Never be afraid to take risk if you really wanna succeed.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by alfanio(m): 8:31am On Jun 14, 2018|
This is the dividend of the reatriction of foreign exchange to 41 items implenented by the govt in the early part of 2016, a policy in the best interest of the Nation. It maybe painful at first but if we stay the course we will emerge the better for it insha Allah
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by Gerrard59(m): 8:50am On Jun 14, 2018|
BusinessDay, how can a dive indicate increment? How can 65.70% mean a dive when the previous half had 60.72%?
As for Friesland Caminpa, they should have explained the percentage difference. And not make it look like the firm is sourcing a significant percentage from Nigeria. The word some can mean anything. Apparently, the some here is less than 20%.
Nonetheless, it is a good one from the firms.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by Nobody: 9:10am On Jun 14, 2018|
And you made sense with this comment ?
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by mapet: 10:00am On Jun 14, 2018|
Let's just safely assume that when it comes to economics matters, you are a complete illiterate. You just wanna do bobo, mishmashing words to sound literate, yet you end up sounding ridiculous. Lay off those meds Bro......
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by ehinmowo: 10:10am On Jun 14, 2018|
There is a Yoruba addage dt says, "dnt reply a fool lest he makes you look foolish". Another part of dt same proverb says, "reply a fool so dt he wouldn't think dt he's wise".
I will choose d latter. Let me enlighten ur dull head a bit. D central govt controls monetary and fiscal policies of d country. These are macroeconomic apparatus. Wen a govt decides to introduce multiple exchange rate in d name of religious and partisan bigotry, at the expense of biz oriented individuals, she is crumbling d economy. I will nt go further. Cos I dnt hv time for idiots
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by ehinmowo: 10:13am On Jun 14, 2018|
Mr man, if u wnt tutelage, ask.
Ask ur govt dt introduced multiple exchange rates, one-sided sanctions, lack of institutional autonomy, autocratic leaders and no regard forrule of law.
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by mapet: 10:37am On Jun 14, 2018|
Let me start from your last line " I will not go further".....absolutely true, don't. You need to stop digging as you're making a bigger mockery of yourself. You need to subject yourself to proper scholarship on elementary economics and not some quick copy-past of google search. In summary, you keep coming out dumber.
Meanwhile, I am Yoruba....and I am much suprised....so you have little substance in you? You know a proverb like this yet you made gaffes at will? Let me advise you with a more fitting proverb - "It would have been better you kept quiet and be thought of a fool, than open your mouth and leave no one in doubt"
|Re: Dangote, Flour Mills, NB, Nestlé Push Local Input Sourcing To 66% by DanielsParker(m): 11:18am On Jun 21, 2018|
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