Nigerian Paper Mills Collapse, Imports Hit N297bn In Six Months

Nigerian paper mills have collapsed years after privatisation, forcing the economy to depend on imported paper for its needs.

According to data from the National Bureau of Statistics data, Nigeria imported paper and its allied products worth N296.696bn between July and December 2021.

While paper valued at N188.137bn was imported in the third quarter of 2021, import in the last quarter of the year was estimated at N108.559bn.

A former Chairperson of the Pulp, Paper and Packaging Group of the Manufacturers Association of Nigeria and Chief Executive Officer of FAE Limited, Mrs Layo Bakare-Okeowo, has said that the local paper industry was dying and in need of urgent government intervention.

She said, “We need to have a functional paper industry in Nigeria. Egypt has 25 paper mills but how can Nigeria with a bigger population have no functional paper industry.”

Bakare-Okeowo said governments at various levels must provide the right enabling environment for the industry to operate.

“This is a sector that has been abandoned. Let us forget about what has happened to paper mills and focus on the crisis in the paper sector. We want the government to save this sector by providing the enabling environment,” she noted.

Nigeria once had three paper mills in the country: the Nigeria Paper Mill Limited located in Jebba, Kwara State; the Nigerian Newsprint Manufacturing Company Limited, Oku-Iboku, Akwa Ibom State; and Nigerian National Paper Manufacturing Company Limited in Ogun State.

But the mills are no longer operating even at half of their capacities.

The NNMC Limited, Oku-Ibokun, is said to have been taken over by the Asset Management Company of Nigeria.

Jebba and Iwopin are struggling. Sources in the sector said that some of the investors who bought the paper mills from the government since the 2000s had been merely interested in importing papers while claiming to be producing them locally.

“They also did not invest in them. Some of them also did asset stripping,” a source, who did not want his name mentioned, said.

According to a former Director-General of the Raw Materials Research and Development Council, RMRDC, Peter Onwualu, and Director at RMRDC, Abimbola Ogunwusi, the inability of the three paper mills to work cost Nigeria about N180bn annually.

They noted that the Nigeria Paper Mill, Jebba, produced 65,000 tons of kraft paper, liner and chipboards, sack kraft, fluting media and corrugated cartons per annum as of 1965.

The Iwopin Pulp and Paper Company, on its part, was built to produce 68,000 tons of fine writing, printing and cultural papers.

On the other hand, the Nigerian Newsprint Manufacturing Company’s newsprint mill had an installed capacity of 100,000 tons of newsprint per annum.

However, they noted that the mills were unable to meet the targets due to the country’s lack of capacity to produce major inputs such as long fibres.

Also, dependence on imported long fibre pulp and chemicals as well as epileptic energy supply were critical challenges in the industry.

There are, however, new paper firms that are expanding investments. Dahua Paper Company is planning to invest $500m in tree plantation in Ogun State to enable it get raw materials for paper production. Another is Onward Paper Mill, which recently signed a recycling agreement with Tetra Pak. Bee Paper is also one of the new companies that have sprung up to replace unfunctional paper mills.

The paper industry is a big business, and a number of firms, including newspaper companies, depend on paper for sustenance.

Global paper and pulp market was $348.43bn in 2019, according to Statista, and this is expected to reach $679bn by 2027, but Nigeria is not in the party.

Many players say the paper industry collapsed after privatisation in the 2000s as due diligence was not done before selling the paper mills’ assets.

A researcher at Nasarawa State University, Zaccheaus Tunde Egbewole, suggested in his paper that “the only and urgent remedy is to put in place machinery for massive sustainable wood production.”

He further said, “The use of indigenous wood species and agricultural residues should be encouraged for long fiber pulp production. Efforts should further be made for a stable power supply from the national grid to ensure the sustainability of industrial growth most especially in the pulp and paper industries.”