With rising local sourcing, manufacturers need locally-fabricated machines from FIIRO, PRODA
... many say two agencies unable to step up
With the focus of manufacturers shifting to local raw input sourcing, the Federal Institute of Industrial Research Oshodi (FIIRO) and the Projects Development (PRODA), Enugu, must rise up to the occasion to fabricate quality machines that will be suitable for domestically-sourced raw materials.
Experts say local raw materials require locally- fabricated machines, and with foreign exchange crunch driving local raw materials sourcing, manufacturers’ demand for local machinery will continue to rise. But the onus is on the two government agencies to raise their game and ensure that their machines are reliable and efficient.
“We expect to see more of the machines from FIIRO and PRODA. They are doing their best, but it is not enough. There are many complaints about the suitability of their work,” one Ikeja-based chief executive of a manufacturing company, who pleaded anonymity, told Businessday.
In the heat of foreign exchange scarcity in 2016, Frank Jacobs, the then president of the Manufacturers Association of Nigeria (MAN), told Businessday that manufacturers were purchasing more of locally-fabricated machines.
“We are increasingly looking inwards, embracing resource-based and import-substitution industrialisation. While we keep exploring local inputs, we know this could need retooling and adjusting of machinery. We encourage those with the capacity to go into backward integration due to foreign exchange challenges,” Jacobs, who is the CEO of Jacobs Wines, said.
Also in 2016, John Kachikwu,
CEO of John Tudy Interbiz, a food processor and exporter to the United States, said:“manufacturers are changing machines because the foreign equipment they have cannot blend with local raw materials they are now getting.”
During the year, an official of FIIRO, Dele Oyeku, director of extension and linkages at FIIRO, confirmed that the institute was getting more clients, some of whom were manufacturers.
“Many local manufacturers are now changing their imported machinery and are coming to us to buy local equipment,” Oyeku said in Ikeja, Lagos.
Oyeku confirmed that the action of manufacturers was being driven by foreign exchange scarcity, which had pushed companies into using local raw materials.
Oyeku further said that most of the machines used by manufacturers were fabricated abroad and were not suitable for some local raw materials.
“They are not suitable for the Nigerian environment. The worst is that if you import a machine, you will need technical experts of the company from where you bought them to fly into the country if the machine develops a fault. So they fabricate the machines in such a
way that you will keep depending on them when the equipment develops faults,” he said.
Some manufacturers said the situation is the same at the moment, adding, however, that the major issues with FIIRO and PRODA are suitability of their products, bureaucracy and inability to meet expectations of manufacturers, especially the small and medium players.
A typical example is the case of Jon Kachikwu, earlier mentioned. Kachikwu told Businessday in 2018 that he requested the fabrication of a groundnut frying and a chaf removal machines from FIIRO in
January 2015. As of that time, the price of groundnut roaster (680kg/ hour) was N680, 000 while that of groundnut dehuller (800kg/hour) was N650, 000. Kachikwu presented documents to Businessday shwoing that he made the required payment for the machines.
In 2016, according to him, FIIRO supplied the two machines to Kachikwu, but they were faulty and could neither roast nor dehull groundnuts.
Kachikwu addressed a letter to Dele Oyeku, earlier quoted, complaining that the machines fabricated by the agency were not working. He also had to return the two machines to FIIRO. Up till today, December 7, 2020, the machines are yet to be supplied to Kachikwu, sources close to him said. He has been forced to take FIIRO to court. Businessday understands the case will come up on March 8, 2021. However, FIIRO, in 2018, had defended itself through Gloria Elemo, the then director-general of the institute.
Elemo had acknowledged, in an interview with Businessday, that the machines had issues and were taken straight to the fabrication laboratory.
“But we discovered that it was not a FIIRO design. It was fabricated outside, and not in FIIRO. Yet I took it as a personal project and it was installed for him. I think he had a small problem and he wanted a refund, which I told him that he could get. But as at the time he was putting pressure on us for the refund, we were not ready and did not have the necessary funds,” she had said.
Kachikwu had presented documents showing that all his applications were made to FIIRO, and to anybody outside the organisation.
Manufacturers argued that FIIRO’S inability to produce the right machines or manage a problem involving an SME operator, who paid for a service not rendered, is a big dent on FIIRO and casts doubt on the agency’s capacity to handle multiple fabrication cases from manufacturers.