A few weeks back, upon closing from the office on a Friday, I went to Bedwell street in Calabar, Cross River State to purchase tyres to replace the ones for my Sport Utility Vehicle, something I do annually, and to my chagrin I was asked to pay a whooping N25,000 for each of the tyres.
I ended up spending N100,000 at a time like this that our country is experiencing cash flow challenges. The tyre seller attributed the high price to the current rise in exchange rate. He added that Nigeria imports tyres as the few companies who where producing the product in the country had left due to some business challenges.
How could a country like Nigeria of more than a hundred and fifty million people and where about 400,000 vehicles valued at over N550 Billion is imported annually, who is also a leading producer of rubber be importing tyres?
How could a country with the market and the raw materials export jobs and economic prosperity to other countries by not producing but importing tyres?
In case you do not understand, the market size for tyres in Nigeria is about N120 billion annually (Car Tyres: 5m at N50 billion, truck tyres: 1m at N70 billion) which is currently used to import tyres into the country.
Tyres are made from rubber an important cash crop cultivated in about 18 states of Nigeria. Cross River State is the 3rd largest producer of Rubber in Nigeria.
Presently, about 21,545 hectares of land is under rubber cultivation in Cross River State. With an average latex yield of about 1.5 MT/Ha, the state currently produces about 30,000 metric tons of latex annually.
However, most of the plants are over aged about 35-40 years old and are in need of replacement and expansion to increase quantity, quality and production levels in the state.
Rubber production has been on the downward trend from a peak of 113,479 metric tons before the advent of crude oil, to 46,000 metric tons in 2004 and has since then hardly recorded any significant increase in production.
The decline in the production of rubber in Nigeria has been described as alarming and worrisome especially to the nation’s economy. This situation arose from the total neglect of rubber industry since the discovery of oil in the country.
Now that the oil industry is on the decline and Nigeria is in dire need of diversification of its economy, I will like to strongly advise that Cross River State Government look in the direction of revamping the rubber industry, encourage investment in tyre production in the state thereby creating jobs for youth and contributing to the growth of the state economy.
The value chain of the rubber industry up to tyre production is a huge economy and has the potential to bring the state back to its days of glory. This is the focus of this treatise.
The tyre industry was established in 1962 and 1963 by Dunlop and Michelin respectively, and by 2005 had a combined annual capacity of 2.25m tyres (1.5m cars and 0.75m truck tyres). The market size (units) for tyres was about 3 million units (car- 2.0m and truck- 1.0m) in 2005, valued at over N30 billion and 5 million units now.
The local production as at 2005 met 75% of demand, however today Nigeria’s tyre plants have shut down and the country now imports almost all its tyre needs.
Recently however, the Association of Nigeria Tyre Marketers called on the Federal Government to take necessary steps in reviving the local tyre manufacturing industry to aid the new automotive policy. Nigerian tyre industry presents strong opportunities to increase local content in the auto sector.
Last year, the Federal Government of Nigeria launched the new automotive policy. This Federal Government’s new automotive policy is expected to revamp the automotive industry, encourage local production of vehicles, promote local manufacturing of tyres and other parts, enhance entrepreneurial inclusiveness and generate employment for Nigerians.
Cross River State as a leading producer of rubber must thus be in the fore front of the action to restore this all important sector of the national economy for the benefit of the state and its citizens.
Some of the major companies in the industry in the state are PAMOL Nigeria Limited, a subsidiary of Dunlop Nigeria Plc and ENG-HAUT Industries. It is time the Cross River State Government partnered with these companies to increase production of rubber in the state and establish a tyre manufacturing plant to meet the growing demand for the product in Nigeria.
It is worthy of note that the former Managing Director of PAMOL Nigeria, former President of Natural Rubber Association of Nigeria and a Council Member of International Rubber Study, who is currently the President of Nigeria Association of Chamber of Commerce, Industry, Mines and Agriculture, NACIMA Chief. Bassey Edem is from Cross River State.
It is important that the state seek ways to make the best use of the opportunity this offers, with his vast knowledge in the rubber industry and contact in the Organized Private Sector in Nigeria, he can help promote investment in rubber production and the manufacturing of tyres in the state.
Natural rubber production is considered to be one of the most profitable agro industrial ventures. It is a strategic material because it cannot be replaced by synthetic rubber in some important applications due to its outstanding characteristics like elasticity, resistance to abrasion, impact and corrosion, its impermeability, insulating properties and ability to disperse heat.
Rubber is currently also used in more than 50,000 other different products such as adhesives, surgical gloves, health equipment, and accessories, condoms, coatings, floor coverings and many more.
As reforestation crop, rubber can help to control the level of carbon dioxide in the atmosphere thus combating the green house effect. With Cross River State Government plan to invest in the regeneration of its forest to contribute to environmental protection, it would be a great idea if the government considers planting a commercially viable tree like rubber in the vast land mass that the state has.
If the Cross River State government makes the wise decision to invest in this very important sector of the economy, then I can be sure that in the next few years, I will not only buy tyres manufactured in Cross River State at a competitive price, but also the state would have succeeded in creating jobs for thousands of its citizens, stopped the loss of foreign exchange through importation of these products and contributed in the creation of a carbon sink for the REDD programme.
This is a dream that our dear state must realize.
Emmanuel Etim is a development consultant based in Nigeria (firstname.lastname@example.org)
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