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January 17, 2021

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Nigeria’s paper mills moribund yet options for reviving them abound

15 min read

On Danladi Abubakar’s corn farm, now harvested, lie massive heaps of stalks about to be burnt. The farmland is located at Moniya, a suburb of Ibadan, Oyo State.

This practice of Mr Abubakar’s, like many other farmers’, causes emissions of carbon dioxide, an harmful chemical compound, into the atmosphere, hence contributing to global warming and ultimately, climate change.

But if not burnt, the heaps could follow through a supply chain ending in machines of paper-product manufacturers, who, currently, depend on imported wood-based raw materials, which constrain their productivity and profitability.

Heavy dependence on such wood-based imports has seen Nigeria’s paper mills grounded for more than a decade. Experts now say crop residues, like Mr Abubakar’s, as well as other agriculture waste, could help revive the moribund paper mills.

Leveraging these alternatives means reduced deforestation, a key measure towards climate change mitigation and more jobs across a chain that involves suppliers of the residue, experts have also posited.

Rise and collapse of Nigeria’s paper mills

As part of its strategic plan for pulp and paper production for domestic and export markets, the Nigerian government commissioned the Nigeria Paper Mill, Jebba, Kwara State, in 1969; Iwopin Pulp and Paper Company (IPPC), Ogun State in 1975 and Nigeria Newsprint Manufacturing Company (NNMC) in Oku-Iboku, Akwa Ibom in 1986.

The government’s plan was for the three pulp and paper mills to provide tonnes of different papers in their thousands every year and of course, their performance was encouraging and promising.

As of 1985, the Jebba mill was producing 65, 000 tonnes of Kraft paper, liner and chipboards, sack kraft, and corrugated cartons per annum.

Entrance of Nigeria Paper Mill (NPM), Jebba Photo Credits/Alfred Olufemi

The IPPC, which was billed to produce 38,000 metric tonnes of bleached short fibres and 65, 000 metric tonnes of fine writing, printing papers annually, performed above 96 percent, data from BPE, showed.

Likewise, the NNMC, which had an installed capacity of 100,000 metric tonnes of newsprint per annum, produced an average of 25,440.5 metric tonnes between 1988 and 1992.

The end products were used for periodicals, magazines and journals, exercise books, text books, writing papers, duplicating papers, photocopying papers, etc.

During these years, NNMC was producing international standard newsprint which was exported to the United States of America, Canada, Ghana, Sierra Leone, and many other countries. Also part of its achievements, the mill reduced Nigeria’s importation of newsprint up to 12.5 percent in 1987.

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However, by 2002, the three mills had stopped working.

Infographics - the rise and collapse of Nigeria's paper mills Credits: Kabir Yusuf

According to the head of Ikot Abiyak village where NNMC is sited, Effiong Ikotidem, things began to fall apart for NNMC when the wood pulp imported got stuck at Calabar port around 1992.

Mr Ikotidem, who worked as a driver in the company in 1979, said he left the company in 1997 when several workers were retrenched following the exit of the foreign nationals who formerly managed its operations.

“There was no money to clear the (wood) pulp at the port, it was at that time that the mill began to collapse,” he said.

The company, he said, resorted to sourcing wood pulp locally. The mill was later shut down around 1994, he said.

Signage on the road leading to Iwopin Pulp and Paper Company (IPPC) Photo Credits: Alfred Olufemi/ PREMIUM TIMES

For IPPC, the business started nose-diving in the late 1990s as a result of poor funding and poor management. Also, the reliance on imported raw material led to the eventual closure of its operations in 2002.

Like others, NPM in Jebba packed up in early 2000.

Privatised but not resurrected

In a bid to revive the defunct companies, the Nigerian government made moves to privatise the companies through the Bureau of Public Enterprise (BPE), starting from the mid-2000s.

For the NNMC, the government sold 90 per cent of the company’s shares to Negris Holding Limited, an indigenous engineering company and affiliate of the Energy Company of Nigeria (ENCO) in 2008.

Remains of NNMC Admin building Photo Credits: Cletus Ukpong/PREMIUM TIMES

After the transaction with the BPE, Negris entered into a technical partnership with some firms with high hopes of reviving the NNMC’s operations but the company was soon hit by a financial crisis.

Access Bank, one of Nigeria’s biggest money lenders, obtained a court order to liquidate Negris following its inability to pay back the N2.7bn credit facility granted to purchase the company in 2012.

Consequently, the bank engaged the services of an international valuer to value the mill, after which the Asset Management Company of Nigeria (AMCON) took over NNMC as one of the liabilities of Negris.

As of 2018 when a delegation of the House of Representatives visited the property, all the machines and valuables had been stripped.

 Log of woods harvested illegally in the forest around the NNMC Photo Credits: Cletus Ukpong/ PREMIUM TIMES

The community accused Negris of covertly selling those valuables since AMCON took over its liabilities.

When PREMIUM TIMES arrived at the village in November, tall grasses had taken over the paper mill’s premises with loud sounds coming from a distance.

The sound later turned out to be a product of hammers chipping off some hard rocks. Where the reporter traced the sound to had more than 20 young men chipping away concrete from the building.

They had more concrete blocks stacked near the building entrance kept for buyers.

“Hello guys, who are you working for and why are you doing this?” the reporter queried the young men. “Mbion adong owo (People are hungry)!” One of them responded in Ibibio.

Less bothered about the reporter’s presence or disposition, the boys continued the vandalism of the facility meant to be at the fore of paper production in Nigeria.

Mr Ikotidem said the “community boys” joined Negris to strip NNMC’s assets when they could not stop Negris, noting that the two electric turbines, as well as other equipment in the mill, had been stolen.

Similarly, the BPE formally handed over the Iwopin mill to Beulah Technical Company Ltd (BETCO) as the core-investor on March 3, 2014, offering it 100 per cent of the company’s shares.

Handing-over meeting with BETCO and BPE officials Credits: BPE/Twitter.com

Six years later, when a PREMIUM TIMES reporter got there, the buildings, covered with weeds, were only manned by security officers.

Abandoned Iwopin building Photo Credits: Alfred Olufemi/ PREMIUM TIMES

Our reporter was denied access to the inner parts of the facility because no one is permitted to enter except authorised by the management of BETCO in Lagos.

Although the primary school built within its premises is still active, the factory has remained the way it was since BETCO took over in 2014.

A resident who is in her early fifties, identified as Alhaja Awonuga, begged for the government’s intervention since the private company has not proven to be efficient.

Apart from producing paper, the company will be a major driver of development, Mrs Awonuga said.

When PREMIUM TIMES contacted BETCO, the project manager of the paper mill, Nick Crown, said there are plans to start as he claimed a setup going on there.

Entrance of Iwopin Pulp and paper company (IPPC) Photo Credits: Alfred Olufemi/ PREMIUM TIMES

He however refused to give a specific time or time range.

“If you buy a property you won’t just start putting money there. Now that that is sorted, there is setup going on there. A couple of months. The second phase is starting soon. Definitely, things will spring on,” he said.

Reeling off the plans of revitalisation, Mr Crown stated that the company will commence the production of pulp as well.

“There is no choice to that. To produce pulp, there are certain chemicals you need. Those chemicals have to be imported. So, we’ll need the government to cooperate with us and reduce the tariff on importation of those chemicals because the place was set up initially, there is no private company that will run that place at a profit,” he said.

The project manager also cited the unavailability of land, tariff on importation, and the unstable power supply as the reasons for the delay.

“We actually need at least 100,000 hectares for an impactful paper industry to begin and we have been struggling with the states just to even get 20,000 hectares for several years. You see part of the reasons for delay?” he asked.

“Government can be pumping money in. We cannot just be pumping money into the factory.

That place was set up to produce some chemicals itself like chloroaniline. That’s part of the chemical.”

Under-performing Jebba mill

The Jebba mill was sold to MINL limited, a foreign subsidiary of Manaksia, a multinational conglomerate headquartered in India, in 2006 but did not commence operations until 2010.

Welcome to NPM, Jebba Photo Credits: Alfred Olufemi/ PREMIUM TIMES

But unlike NNMC and IPPC, it is still functioning , however, below the capacity installed at inception.

Its workers were just rounding off their lunch break when our reporter got to the facility but without much ado, a representative of the management directed the reporter to the corporate office of MINL in Lagos.

“Nobody will attend to you here. Only in the corporate head office in Lagos. Go there! ” he said, barring PREMIUM TIMES from entering.

Upon getting to the Lagos office the following week, the Human Resources Officer refused to respond to PREMIUM TIMES’s inquiries on the status of the mill or its activities.

MINL Lagos office

However, from unofficial interactions with the casual workers in Jebba and management staff in Lagos, it was gathered that the company only recycles used paper into carton papers and cardboard papers for its clients.

Its production is based on requests from clients, said the worker who craved anonymity for fear of being thrown out of the job.

He added that the company buys used papers from every part of the country, being the major material for production.

According to the management staff who is not authorised to grant press interviews, the company could not engage in the production of pulp because the trees in the Jebba forests have outgrown the pulp stage.

“The trees have outgrown the pulp stage. I believe It would have been stronger to go into that. It gives us a virgin pulp and a stronger paper,” the management staff said.

Worried FG

The non-performance of the paper mills has been a concern to the federal government.

Earlier this year, the Senate began the probe of the moribund paper mills in the country with a view to reviving them.

The resolution was sequel to a motion sponsored by Chris Ekpenyong (Akwa Ibom) during the plenary on the need to revive the moribund paper mills in Nigeria

The lawmaker noted that the sector had gone moribund since the privatisation, leaving the country with another huge income deficit.

The president of the Senate, Ahmad Lawan, urged the Committee on Privatisation to investigate the activities and operations of the mills and report to the Senate.

When contacted, the chairman of the Senate’s Committee on Privatisation, Theodore Orji, acknowledged the receipt of PREMIUM TIMES’ inquiry for an update on the committee’s move but was yet to respond despite multiple reminder messages sent.

However, the spokesperson of the Minister of Industry, Trade and Investment, Ifedayo Sayo, said the ministry, alongside the Bureau of Public Enterprises (BPE) has started engaging stakeholders on the same concern.

“There is a committee in place to address the challenges of the paper mills. The committee is engaging the stakeholders to address it holistically. The committee is headed by the permanent secretary here,” Mr Sayo said.

This paper also learnt that the committee has commenced a tour around the facilities as one of its plans.

“We are also in Lagos. We are going to Iwopin. Another team went to Oku-Iboku two weeks back before the EndSARS protest,” a BPE official told PREMIUM TIMES in November.

The price we pay

Due to the non-performance of the paper mills, Nigeria depends on importation to meet the paper needs of its growing population.

For example, FAE Limited, one of the largest envelope manufacturers in Nigeria, says it imports paper to meet up with the demands of its customers like many other paper-products manufacturers across the country.

In some cases, the company waits for a longer period because paper mills in America and Europe are fully booked throughout the year.

“Even when we decide to buy from them, at times we are on the queue,” the Managing Director, Funlayo Okeowo, told PREMIUM TIMES, restating that a large percentage of the production cost goes abroad.

Funlayo Okeowo at her Lagos residence Photo Credits: Alfred Olufemi / PREMIUM TIMES

Olugbemi Malomo, the President/Chairman in Council, Chartered Institute of Professional Printers of Nigeria (CIPPON), who runs a printing firm in Lagos, also decried the heavy dependence on importation.

“We don’t have any option. Since we don’t have…, we have to bring from abroad,” he told our reporter in September.

Olugbemi Malomo Photo Credits: Alfred Olufemi/ PREMIUM TIMES

To put Mrs Okeowo and Mr Malomo’s plight in figures, in 2015, the director-general of the Raw Materials Research and Development Council (RMRDC), Hussain Ibrahim, said the country was losing N180 billion from non-performance of the three paper mills in the country.

This, according to him, was worsened by the fact that the federal government of Nigeria spends N50 billion on the import of papers annually.

However, three years after, the figures have greatly soared as Azikiwe Onwualu, the new DG of RMRDC, disclosed that Nigeria lost over N800 billion yearly to paper importation in 2018.

According to the Nigeria Bureau of Statistics, in 2016, N398 million worth of papermaking material, paper, and paperboard were imported into the country. It grew to N845.7 million in 2017, N1.5 billion in 2018, and N1. 2 billion in 2019.

For Mr Malomo, these figures are conservative because they do not include the finished papers imported in the form of books, electoral materials, etc.

“Also, they are figures from the Nigeria Customs and probably the port Authorities. But what about those smuggled in? Nigeria today, we print over 1.2million books annually…”

By his own estimation, not less than 3 trillion naira is expended on the importation of different forms of papers annually.

Reviving paper mills with ‘waste’

Since the unavailability of raw materials was a major reason for the collapse of the mills, Oluwafemi Oluwadare, a professor in the Department of Forest Production and Products, University of Ibadan, posited that they can be revived with the available resources.

Welcome to the department of social and environmental forestry, University of Ibadan Photo Credits: Alfred Olufemi / PREMIUM TIMES

“The basic limiting factor is the raw material supply; the raw material supplied will be from two sides, we have the wooden part and the non-wooden part. From research we can establish that we have enough raw materials, both from trees and materials that are not trees, which are non-wood,” Mr Oluwadare said in an interview with PREMIUM TIMES.

Amongst these non-wood materials are agricultural residue.

“For the agricultural residue, which are non-wood materials because they can be grown for a period unlike trees that have to be grown for years, 10, 20,50 or 100 years. The area of crop residue, we have a lot of them wasting off, you can imagine the volume of sugarcane consumed in Nigeria, maize once the crops are harvested the loafers are left there,” he said.

The professor showed PREMIUM TIMES samples of pulp made from non-wood materials like Kenaf, a plant produced in many states in the country.

Professor Oluwafemi Oluwadare in his office Photo Credits: Alfred Olufemi / PREMIUM TIMES

Also, he displayed a bleached paper produced from Thaumatococcus daniellii, a plant species used for wrapping various types of foods such as bean cake, yam flour, rice and pounded yam.

The head of Technology Development Department in the Raw Materials Research and Development Council (RMRDC), Abimbola Ogunwusi, said he observed that many types of straws are available in Nigeria as by- products of agriculture and thus can be potentially used as sources of raw material for the pulp and paper industry.

This was contained in a research work published in 2014.

Pulp from kenaf Photo Credits: Alfred Olufemi/ PREMIUM TIMES

Paper from Thaumatococcus daniellii Photo Credits: Alfred Olufemi/ PREMIUM TIMES

“In view of the pulpability of straws, agro waste pulping facilities can be established in states. In most cases, the by-products are cheaper than wood. As most of the straws produced locally are by- products of agricultural produce, the total cost of production will be shared with the main crop,” it said.

Messrs Oluwadare and Ogunwusi’s position is in tandem with a research work carried out by Harshad Pande, a scholar at the University of Toronto Faculty of Forestry, Toronto Ontario Canada, which was published by the Food and Agricultural Organisation (FAO) in 1998.

In the research, the scholar noted that the most widely used non-woods for papermaking are straws, bagasse, bamboo, hemp, kenaf, jute, sisal, abaca, and reeds.

According to him, producing paper from non-wood fibres would not only increase the productivity of mills but also help in reducing the depletion of natural forests, which takes a great toll on the natural ecosystem and climate.

Between 2000 and 2005 the country lost 55.7 per cent of its primary forests, data from the United Nations showed.

The forest reserves have been cleared for logging, timber export, subsistence agriculture, and notably the collection of wood for fuel.

Reacting to this, two environmental activists, Olumide Idowu and Joshua Borokini, said while reviving the defunct paper mills, the Nigerian government should consider the non-wood options as its commitment to combating climate change.

Joshua Borokini / Facebook

“In Nigeria, we need to categorise our priorities because when there is no alternative for people, they will keep cutting the trees. It is so important that we need to look at the transition strategy that will ensure that as they are cutting, they are planting more,” said Mr Idowu.

“It is high time that Nigeria starts looking at the long term opportunities. We need to start looking at the transition process because as a country almost everything is damaged.”

Mr Idowu, co-founder of the International Climate Change Development Initiative, noted the need for penalties, policies and robust consultation with stakeholders in the pulp and paper industry.

Olumide Idowu Credits: signalng.com

“More than ever, the government, private sector, international development organizations, and civil society need to come together and collaborate on advancing knowledge transfer, research programs, supportive policies, and cutting-edge technologies that will help Nigeria harness the enormous potentials of the paper and pulp industry — now valued at $520bn with a compound annual growth rate of 3.45%,” Mr Borokini added.

In a similar vein, a forester, Abdulwaheed Alawode, stated that if the government is ready to resuscitate the companies, it would even help increase the forest resources by planting more trees.

Corroborating this, Mr Oluwadare said he published a paper in 2008, emphasising the need to use more wood for the production of more trees.

“I emphasised that particular area then I said we need to use more wood to produce more trees, the more wood we use the more we are able to replace them so in terms of global warming yes, it is true but at the same time what we are growing,” he said.

If these things are considered, not less than 5,000 jobs will be created, Mr Oluwadare added.

“The sector will create over 5000 jobs from the upstream to downstream. Because people will be involved in the planting, harvesting, pulping…,” he said.

Call for investors

Experts who spoke with PREMIUM TIMES have also made a call to interested investors as one of the ways to make a headway after solving the problem of raw materials.

“The limiting factor is getting people who are interested in that sector to invest,” Mr Oluwadare said.

For Mrs Okeowo, who is also the chairman of the printing, paper publishing group of Manufacturers Association of Nigeria (MAN) and the chairman of the printing paper group of Lagos Chamber of Commerce (LCC), the investors can form clusters to begin with.

“I don’t believe we should be looking at gigantic projects. The way I’m looking at it is that we should form clusters, clusters of about 10, or 50 in each cluster. We would look into the value chain, who wants to go into the plantation, who wants to go research or pulping and the paper mill production,” she said.

While proffering solutions, Mr Malomo of CIPPON suggested the backward integration approach, a system where the government empowers some major players for massive local production who will later supply to others, be employed.

“Sometimes ago, FG came up with a policy they called it backward integration and they said look, anything we have raw material to produce locally, government will put a lot of resources in it to produce it locally to ensure it is produced locally, they will take one or two big players, empower them, they even give tax breakers and say you will do a semi kind of manufacturing. Then others can buy from you. They’ve done it in the sugar industry, cement industry and it’s working” he said.

He also advised the government to take stringent actions such as restricting importation as it has done in some sectors.

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