Why Govt Should Support Local Tile Producers

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With 25 years of robust business, Mallinson and Partners, a leading Nigerian tile producer has moved from trading to manufacturing and is seeking government’s support in order to add more value to the Nigerian economy. Ugo Aliogo and Jemima Bolokor report

Mallinson and Partners Limite is one of the leading tile manufacturing companies in Nigeria. As the third indigenous company in the tile industry, the company has built a solid track record for itself with the production of quality tiles for the Nigerian market and for export. The company, which is also involved in the manufacturing of building materials, and plastics products (such as chairs, stadiums, cups, and other plastics), has been waxing strong in the business of importation and distribution for 25 years. The plastic product company, which is known as Nispo plastics limited is a sister company of Mallinson and partners.

The Chief Executive Officer of Mallinson and Partners Limited, Mallinson Ukatu, noted that the company has moved from trading to manufacturing due to the increasing needs of the market and the quest to attain a leadership position in the industry, adding that they maintain a good pricing system, efficiency, fast delivery and good customer feedback mechanism in order to win the hearts of customers.

He explained that in the business of tile production, the location for outsourcing the material is very important, stating that they carry out the mining by themselves in order to know what they want for the finished products and “with this, we are sure of what we are using for our product.”

“We have had incidences in the past where we want to use kaolin, then they will mix kaolin with weathered granite. This means there is iron content on this material, and you will not have best final product when it comes out. Another aspect is that we are doing a full body tiles which is known as certified tiles,” he added.

Ukatu stressed that most people claim that certified tiles are ceramics tiles, clarifying that the certified tiles implies that the body will be the same, and the colour will not change.
According to him, a pure ceramic tile which is glazed will certainly fade out after a period of time.

He also faulted the public notion that China produces fake products, stressing that China’s products are good, depending however, on what quality the parties desire and also their knowledge about the product.
“We have been doing business for the past 20 years and also been importing since 22 years. What this implies is that we know what we want; we have enough knowledge and where to go to get the right product,” he said.

Outsourcing of materials
Speaking on the outsourcing of materials for tile production, Ukatu noted that most factories and industries outsource their materials from miners who are not well trained and would want to cut corners by giving the factory concerned low quality materials for production.
“Tak is a material used for tile production, it is found in the North and Oyo state respectively. But the quality of tak from Oyo state might be good as the one from Niger state,” he added.

He pointed that some of these small mining companies get this material and mix it up with other bad raw materials, which will affect the finished product.
According to him, these companies carry out these sharp practices in order to make a living for themselves, “unlike in Europe, where a buyer is sure that a particular company is specialised in supplying a particular finished product”.

“You could have vesper mixed with quos stone because in mining, stone can mix with other little materials. If you don’t have beneficiating machine, you cannot beneficiate out, then the iron content of this material will be higher and if you put it into your final product it’s going to have a problem in producing a good quality. We outsource our raw material in Nigeria, from Ogun, Sokoto, Katsina, and Oyo,” he explained.

“The sharp practices in the industry are that the miners give you what is available by mixing it with different quality that are cheaper in order to give you the final product. For instance, if you want to buy dolomite, they will mix it with 20 percent Kaolin; therefore the quality will not be the same. We have tried as much as possible to have a Union on these sharp practices, but it has never worked out. If we had a Union, we will able to checkmate the activities of these miners and what they are offering.

“Tile production has been in Nigeria for the past 30 years. But it was just two companies that have been in the business, before we came into the industry as the third indigenous industry. In the past, we had a government factory in Kano which produced Water Cisterns (WC) and there was also another one in Calabar, but they stopped producing in the 70s and 80s. The only ones existing are those owned by foreigners, which have been in the country for the last 30-35 years.

“Some of the things we import for tiles production are what we can also produce here in Nigeria with time. We have not seen what from government in terms of support apart from what Bank of Industry (BOI) is doing,” he added.

Quest for government’s support
Electricity is vital for industrial production and growth. It reduces the financial burden on industries to get alternative sources of power to carry out production, which is a huge challenge on production cost. If government supports industries with stable power supply, the heavy reliance on generators for power generation in industries will stop.
Ukatu called for government’s support in the area of energy, noting that companies are using natural gas to power their generators, which implies that the factory cannot be operated without 24 hours stable power.

“The natural gas is supplied by Nigeria Gas Company in partnership with Shell pipeline and other concessionaires,” he said.
He expressed shock that the government is charging gas on foreign currency in a market that is 90 percent naira –controlled. He, therefore, urged government to give subsidies to gas in order to encourage local production, “gas is for 100 percent local production; therefore government should stop charging gas in dollars.”

Ukatu further stated that the Manufacturers’ Association of Nigeria (MAN) has been trying to seek government support, on the need to power the industries with electricity and give them good prices on power to work with.

He added: “If there is any further devaluation of the naira, the industries will shut down because we are been charged in dollars to pay the gas. This will definitely encourage importation immediately; therefore government should do something about this.

“The union is not speaking with one voice. Most of the big industries are using gas; this is the reason why these industries are springing up in gas neighbouring cities with gas pipelines. The industries in the East cannot work because there are no functional pipelines there, apart from the old pipelines done in 60s in Aba. It is not favourable running the generator with diesel at a high cost. We cannot run this tile factory in the East, unless there is 24hours electricity to run it. If power goes off for 1 hour, it might take another two to three days to restart production.

“The industry is growing, but I believe government should encourage made-in-Nigeria goods by Nigerians. Frankly speaking, the goods produced in Nigeria are stepping up in terms of qualities. In the wire industry, Nigeria wires are of higher quality than the imported wires.
“Most times they (Nigerians) will import wires from China and put Nigerian name on it, and a lot of people have been arrested on that. These people who do this have an understanding that Nigeria cables are better. You cannot manufacture products of low quality standards, when you are aware that Standard Organisation of Nigeria (SON) will inspect the standards and quality of what you are doing every fortnightly.”

“The BOI is trying to give their best to industries, by bringing in machineries to support the industries. But if you are unable to get BOI, how will you start your factory with the current bank figure of 22 per cent? If it is not single digit, you cannot move anywhere. For first time comers in the industry, it is not easy to penetrate. I have funded my company with my personal money as a pilot plant. On the second expansion I did, I also used my money. It is on the second phase that we got government support through BOI. Accessing these loans has been very good.”

He added that they are facing serious challenges in the industry, stressing that there are times when the gas pipe lines are been vandalised, which affects their gas supply and disrupt production follow. He added that the host communities can be an obstacle to production, by bringing up certain unfavourable laws and policies.

“We have local customers, because we believe that what we produce will sell more in Nigeria and there is demand for it. We are doing export to West African countries, such as Ghana, Angola, Cameroun and we are trying to begin with Cote d’ Ivoire. We want to be a one-stop shop for building materials, just tile products, plastic industries,” he noted.