Paper industry booms, but Nigeria not in the party
... but ‘kenaf’ seen as a game-changer
Brazil, an emerging economy with 209.5 million people, made $3.5 billion from selling cellulose pulp to China in 2018. In the same year, the South American country earned $10.7 billion from export of forestry products to the rest of the world. These paper raw materials provide foreign exchange for the country and boost foreign direct investments into the country.
The industry has secured private equity deals as well as mergers and acquisitions in recent times. Klabin, Brazil’s largest producer and exporter of packaging paper, secured a $280 million for Puma Project II from the International Finance Corporation (IFC).
Klingele Paper & Packaging Group, one of the leading independent manufacturers of containerboard and corrugated board packaging, recently signed an agreement with Klabin to purchase the kraftliner mill in Nova Campina in the state of São Paolo.
Away from Brazil, Finland has also managed its paper and pulp industry superbly, and now has 54 paper and pulp mills valued at €20.7 billion. The country exported forestry products valued at €12.5 billion, according to the Natural Resources Institute Finland.
“It is amazing that 20 percent of Finland’s exports are paper and pulp. This is a country with 5.2 million people. If they can do it, Nigeria can as well,” Olufunso Somorin, regional principal officer, African Development Bank, said at a webinar organised by the Lagos Chamber of Commerce and Industry (LCCI) tagged ‘Revitalising the Paper Industry: Challenges and Op
portunities in Southwestern Nigeria.’
“We need to fix the raw materials problem, and then develop collaborations with other countries that can provide raw materials to Nigeria,” he recommended.
In 1970s to 1990s, Nigeria had three paper mills, including the Nigeria Paper Mill (NPM) Limited located in Jebba, Kwara State; Nigerian Newsprint Manufacturing Company (NNMC) Limited, Oku-iboku, Akwa Ibom State, and Nigerian National Paper Manufacturing Company (NNPMC) Limited in Iwopin, Ogun State. Only Iwopin is producing but at 10 to 20 percent capacity.
Even if the firms are working at 100 percent capacity today, they can only provide 250,000 metric tons of paper needs as against demand of over 3 million metric tons.
“Nigeria needs 50 smallscale paper mills now,” Oluwaseun Jegede, consultant on market assessment, said.
“The big problem investors see is raw materials, but kenaf is now available all over Nigeria,” he said.
He noted that importation of papers costs Africa’s largest economy N182 billion annually, stressing that investors with $10 to $50 million should step up and tap opportunities in the paper industry, while government must step up with policies to drive the sub-sector.