RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL (RMRDC) FEDERAL MINISTRY OF SCIENCE AND TECHNOLOGY (FMST) 3RD NIGERIAN NON-OIL EXPORTABLE PRODUCTS INTERNATIONAL TRADE FAIR MADE IN NIGERIA SHOES EXPO PROMOTING THE DEVELOPMENT AND UTILIZATION OF INDIGENOUS RAW MATERIALS FOR THE LEATHER AND FOOTWEAR INDUSTRIES IN NIGERIA BY DR. H. D. IBRAHIM DIRECTOR-GENERAL/CEO (RMRDC) AT ROYAL EVENTS CENTRE, LAGOS Raw Materials Research and Development Council (RMRDC) 17, Aguiyi Ironsi Street, Maitama, P.M.B. 232, Garki, Abuja Website: www.rmrdc.gov.ng E-mail:[email protected]1
Transcript
RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL (RMRDC) FEDERAL MINISTRY OF SCIENCE AND TECHNOLOGY (FMST)
3RD NIGERIAN NON-OIL EXPORTABLE PRODUCTS INTERNATIONAL TRADE FAIR
MADE IN NIGERIA SHOES EXPO
PROMOTING THE DEVELOPMENT AND UTILIZATION OF INDIGENOUS RAW MATERIALS FOR THE
LEATHER AND FOOTWEAR INDUSTRIES IN NIGERIA
BY
DR. H. D. IBRAHIM DIRECTOR-GENERAL/CEO (RMRDC)
ATROYAL EVENTS CENTRE, LAGOS
Raw Materials Research and Development Council (RMRDC)17, Aguiyi Ironsi Street, Maitama, P.M.B. 232, Garki, Abuja
I am indeed happy to be here with you on this occasion of Third Nigerian Non-Oil Exportable Products International Trade Fair with special emphasis on Made in Nigeria Shoes. My topic “Promoting the Development and Utilization of Indigenous Raw Materials for the Leather and Footwear Industry in Nigeria” is of particular relevance in view of the myriad of challenges that currently confront our nation as a result of the economic recession caused mainly by a drop in global oil prices.
Before the discovery of crude oil, the Nigerian economy was predominantly sustained by agriculture, providing the bulk of our foreign exchange earnings, employment and government revenue. The share of agriculture in the Gross Domestic Product (GDP) declined significantly in the 1980’s while crude oil revenue replaced agriculture as the nation’s mainstay during this period. The period brought with it profound changes in the Nigerian economy and with the large receipts from crude oil exports, there was excessive importation of finished goods, raw materials, food and services resulting in high import bills. In addition to this, was the proliferation of import substituting manufacturing industries which depended heavily on imported inputs with very low local value added till today.
The establishment of Raw Materials Research and Development Council (RMRDC) in 1987 had its background in the above stated scenario in the Nigerian economy as a response to a clarion call from the Organized Private Sector at a private-public interactive workshop aimed at finding a mutually acceptable solution to the problem of raw materials sourcing for manufacturing industries.
WHAT ARE RAW MATERIALS?
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Raw material can be defined as expendable matter or substance on which labour has been expended on its exploitation and which on further development or processing will serve as an input in the manufacture of industrial goods and services.
MAJOR CLASSES OF RAW MATERIALS UTILIZED BY THE INDUSTRY
• Primary Raw Materials: these are unprocessed raw materials directly obtained in their natural states with or without tangible value addition.
• Secondary Raw Materials: Semi-processed raw materials that have received minimal or sufficient value-addition.
• Tertiary Raw Materials: these are somewhat finished products at a particular level of production which may find other uses in different industries as starting materials or ordinary ingredients.
The major raw material for the leather and footwear industries are Hides and Skins which are essentially by-products of the meat industry derived either from the slaughter of cattle, camels, sheep and goats. Leather tanning refers to the process of converting raw hides and skins into stable, non-putrescible product technically referred to as Leather. This conversion process is mainly chemical in nature; the two most common processes being vegetable tanning and chrome tanning. For many centuries, the techniques used to convert a putrescible (hides and skins) materials into a durable articles are based on small-scale, traditional, artisanal (tanning) procedures. In the nineteenth century, scientific and technical developments provided scope for the introduction of large-scale commercial procedures; these now form the basis of most of today’s leather-making technology. From time immemorial, hides and skins have provided humankind with raw materials for the manufacture of a range of useful articles such as garments, footwear, leather goods-bags, handbags, hand gloves, industrial gloves, wallets, ruck sacks, folios, brief cases travel wares, belts, sports goods, upholstery and saddlery goods among others.
TABLE 1: LIST OF MAJOR RAW MATERIALS FOR THE LEATHER INDUSTRY
Leather manufacturing process is divided into 3 fundamental sub-processes: preparatory, tanning and crusting. A further sub-process, surface coating can be added into the leather process sequence, but not all leather receive surface treatment.
Traditional/Artisanal Tanneries have a long history in Nigeria of employing traditional methods to convert lower grade raw skins into a reasonably good quality finished leather, primarily for the local market. Traditional tanners typically work with raw skin and wet blue rejects, which are obtained at favorable prices through various channels: (1) directly from the village slaughter place, (2) through the network of skin traders or (3) from tanneries. In some cases, rejects have been discarded by the industrial tanneries and are obtained free of charge by the traditional tanneries. However, in the past year, the number of skin rejects has fallen as larger tanneries are keeping the even the lowest grades of skin and wet blue. Small-scale tanners, dryer and leather product manufactures have increasingly been forced to search out for foreign market in neighboring countries to source their skins and leather.
These tanneries are generally small family-owned units which are clustered mainly in and around the towns with manufacturers of footwear and other leather products. Within the Kano Metropolitan area alone, there are five artisan tanning clusters tanning around 25-30,000 skins weekly. The handmade tanned and dyed leather produced by these tanneries supply local leather products manufacturers and the Nigerian handicraft sub-sector. Both the handmade leather and resulting products are sold within Nigeria and also other countries in West Africa.
Finished Leather Goods (FLGs): The Nigerian FLG value chain comprises the producers group of actors which accounts for over 60% of all actors in the sector. They are of two types of these – industrial and artisanal producers. Based on the scale and type of operation and the level of machinery involved, the industrial producers group can be divide into two main production groups – large and small industrial producers. The large industrial production group is characterized by complete and fully-integrated automated production systems with less label involvement.
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Premium quality leather commands a great share of the international market. According to Chemonics International Report of 2002, there is a steady growth of 3% annually. The global market for leather is about $72 billion and $4.4 billion for raw hides and skins. Nigeria’s leather sector is the second highest foreign exchange earner after the oil industry. In 2009 alone, Nigeria earned about $680 million from tanned skin (GEMS1, 2012).
SOURCING OF LOCAL RAW MATERIALS IN NIGERIA
It is possible to source locally, most of the raw material components needed for the leather industry. However, available records show that only few raw materials are sourced locally, leaving the rest vastly under-developed and untapped especially those derived from the petroleum industry.
CHALLENGES OF SOURCING OF LOCAL RAW MATERIALS
Cheap and accessible materials are the basis of a successful leather and leather products industry. However, the raw materials must be available in the right quality for these products to compete favourably both locally and internationally.
The challenges below tend to limit the sustainable sourcing of local raw materials:
• Inadequate appropriate information on raw materials sourcing due to the high financial outlay in information/data gathering and documentation.
• Inadequate technical skills and training facilities.
• Lack of basic raw materials especially in iron and steel sector.
• Inadequate infrastructures.
• Adverse effect of globalization – unfair competition and dumping of products.
• Inaccessibility to fund with low interest rate for investments.
• Low level of research and development (R&D) activities due to poor funding.
• Poor commercialization of R&D outputs.
• Limited availability of appropriate technology, equipment/right machinery for raw materials processing and storage.
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Critical Factors Affecting Hides and Skins Quality
Low quality of Hides and Skins could be attributed but not limited to the
following:
Poor animal husbandry, including inadequate and poor quality feeds,
inadequate parasite and disease management, branding with hot iron for
identification purposes which may lead to low quality of hides and skins;
Slaughtering especially in rural areas outside organized slaughter houses,
due to inappropriate slaughtering, flaying, collection and initial processing
methods used, leading to spoilage and rejection in the market;
Inappropriate technology used at various stages in the processing chain
from raw hides to finished leather products;
Inadequate investment in both technology, infrastructure (physical,
financial, information) and skill of manpower engaged in the sector which is
very low in comparison to the need and potential leading to poor quality
output;
Lack of grades and standards for branding; and
Lack of appropriate/adequate incentives for the primary producers of Hides
and Skins.
In order to fully utilize its manufacturing capacity for leather products, the
manufacturing industry needs more sources of quality inputs. Traditionally,
Nigerian hides and skins destined to become leather have been exported raw and
in semi-finished forms for processing elsewhere, and local industry now needs a
radical change to more local tanning and leather preparation. Hides and Skins
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tanned locally tend to be of poor quality, and the limited high grade leather that
is produced is almost exclusively for export.
OVERVIEW OF RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL (RMRDC)
The Raw Materials Research and Development Council (RMRDC) is a parastatal under the Federal Ministry of Science and Technology (FMST) vested with the mandate to promote the development and utilization of Nigeria’s industrial raw materials.
Why RMRDC Was Established
• To serve the interests of industry/private sector by facilitating the sourcing, development and utilization of local raw materials by manufacturers.
• To provide information to enable government formulate appropriate policies for local raw materials development and utilization.
• To reduce the expenditure on raw materials imports, conserve foreign exchange by ensuring increased productivity, capacity utilization and sustainable industrial growth which in turn create millions of jobs.
Our Vision
To be an Indispensable Catalyst for Industrial Growth and Development in Nigeria.
Our Mission
To Promote the Development and Optimal Utilization of Nigeria's Raw Materials for Sustainable Industrial Growth.
MANDATE
The overall mandate of the Council is to promote, support and expedite industrial development and self reliance through optimal utilization of local raw materials as inputs to the nations industries
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OUR AREAS OF FOCUS
Development of raw materials for the following industrial sectors:
• Food and Beverage
• Textile, Leather and Leather products
• Wood, Pulp and Paper
• Chemicals and Pharmaceuticals
• Plastic, Rubber and Foam
• Metallic and Non-Metallic Minerals
• Industrial Equipment including Vehicles
• Electrical and Electronics
• Motor Vehicle and Miscellaneous Assembly
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OUTLINE OF THE RMRDC ACHIEVEMENTS ON RAW MATERIALS UTILISATION
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1) The Annual Nigerian Raw Materials (NIRAM) exposition which holds in Lagos and Kano is a strategic programme of the Council designed to:
promote efficient synergy among stakeholders involved in raw materials value chain for the purpose of ensuring sustainable sourcing of raw materials in Nigeria.
provide conducive platform for exhibition and showcasing of the available raw materials in order to aid the sustainable sourcing of inputs of manufacturing in Nigeria.
facilitate direct business interactions and transactions between producers and users of raw materials at large economics of scale.
encourage the growth and development of resource-based micro, small and medium manufacturing industries in Nigeria.
2) Establishment of Common Facility Centre (CFC) for Leather and Leather Products in Kano: A Collaborative Project Between Kano State Government, UNIDO and RMRDC.
located at Sharada Small Scale Industrial Estate, Kano is aimed at developing production and business management skills through purpose-designed training programmes for the small and medium scale leather products manufacturers. The hides and skins improvement component facilitates a sectoral strategy for hides and skins handling in Kano.
commissioned in 2013 has improved the quality and income of footwear and other leather products manufactured by the small-scale entrepreneurs.
has been listed as one of the UNIDO’s 2014 Country Wide Programme under the Poverty Reduction through Productive Activitie, would entail upgrading the center to serve garments & leather work artisans from across Nigeria. RMRDC is a member of the Joint Implementation Committee for the upgrade under the UNIDO Country Framework.
3) To co,mplement the CFC, RMRDC has through its Research & Development programme developed a prototype leather glazing machine in collaboration
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with Bayero University, Kano & National Research Institute for Chemical Technology, (NARICT) Zaria to upgrade the indigenous process technology and improve the quality of locally produced hides & skins for the leather industry.
4) Produced a compendium of imported raw materials and products as a veritable Strategic Planning Infrastructure (SPI) that could meet the needs
of Investors, Industrialists, Enterpreneurs, Researchers, Government, Policy and decision makers for informed intervention. The compendium of imported raw materials and products will also help government to focus
and target appropriate items that could be produced in Nigeria in the short term and in the medium and long term. It is expected that such domestic production and utilisation will reflect in declining level of imports over time.
5) To maximise value-addition through the use of local raw materials, the Council established linkages between industries, promoted backward integration and encouraged training and use of indigenous manpower.
6) RAW MATERIALS MASTER PLAN. The quest to find alternative to importation of raw materials necessitated the establishment of the Council, which is saddled with the responsibility of increasing local sourcing and capacity utilization by our industries . To this end, the Council has developed a road map tagged the “Raw Materials Development Master Plan” to actualize onerous task.
7) STRATEGIC PROJECTS. Leading the diversification of Nigeria’s economy by focusing on production and development of selected agro and mineral raw materials to enhance their utilization for speedy industrialization and the overall socio-economic development through job and wealth creation. Some of the strategic raw materials that are being promoted by RMRDC include: Cotton, Sheanut, Sorghum, Gypsum, Fruits, Ginger, Honey, Ceramics, Cattle Value Chain including leather and leather products, Sesame, Starch, Vegetable Oil and Industrial Minerals.
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8) RAW MATERIALS DATA BANK. The Data bank is a sustained mechanism that enables stakeholders to access raw materials information through a well-designed process whereby useful data is gathered, interpreted and analyzed.
9) SUPPORTING R&D ACTIVITIES. The Council initiates the funding of research efforts that have relevance to raw materials and process technologies that utilize our vast natural resources. The council in collaboration with higher institutions of learning, research institutes and industries further backs successful laboratory researches into the pilot plant phase, aimed at encouraging the commercialization of such new ventures.
10) JOINT VENTURES PROJECT AND TECHNICAL SUPPORT SERVICES. The Council has continued to play significant roles in advancing the emergence of new resource-based investments through joint-venture projects and technical support services. In clear demonstration of understanding of the need to encourage growth of resourced-based industries in the economy, the Council enters into partnership with industrialists, investors and state governments to set up small scale industries to process the raw materials existing in their localities.
11) PUBLIC POLICY ADVISORY SUPPORT. The RMRDC has been playing important advisory roles with regard to Federal Government’s policy pronouncements and formulations on industrial raw materials issues. In line with its core mandates, the Council avails the federal government with data for use in fiscal policy matters.
12) CREATING AWARENESS ON RESOURCE POTENTIALS..Over the years, RMRDC has consistently been working to make Nigerians aware of the immense potentials of the abundant natural resources in the country. This it does through the mass media, publications, exhibitions, seminars, conferences and workshops.
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SOME PROJECTS IMPLEMENTED BY RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL
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SOME PROJECTS IMPLEMENTED BY RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL
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SOME PROJECTS IMPLEMENTED BY RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL
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COMMON FACILITY CENTRE: A COLLABORATIVE PROJECT BETWEEN KANO STATE GOVERNMENT, UNIDO AND RMRDC
Some equipment at the Leather Common Facility Centre, Sharada Small Scale Industrial Estate, Kano
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DEVELOPMENT OF PROTOTYPE LEATHER (HIDES) GLAZING MACHINE
A Prototype Leather Glazing Machine for local tanners
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COLLABORATION AMONG STAKEHOLDERS FOR INCREASED SOURCING OF RAW MATERIALS FOR MANUFACTURING INDUSTRIES
• Distinguished ladies and gentlemen, the objective of an event such as this "Made In Nigeria Shoe" Expo includes engendering collaboration among various stakeholders, attending the programme.
• This provides a rare opportunity to create a multi stakeholder interest group of Federal, State & Local Governments; private sector (MSMEs) as well as financial institutions etc to address some of the problems associated with sustainable sourcing of local raw material as an outcome of this exposition. Such consortium can pool ideas and resources to jointly solve specifically identified problems to ensure that those involved in the production of leather products drive our economy along the path of prosperity, sustainable growth and development.
• By working together under the principle of Public-Private Partnership (PPP), the synergy between public, organized private sector and financial institutions will create an enabling environment to generate sustainable supply of raw materials for the Nigerian footwear and other leather industries.
ROLES OF FEDERAL GOVERNMENT
• Implementation of Policies to facilitate leather industries development.
• Setting standards for the leather industries practice.
• Provision of infrastructural facilities
• Provision of a revolving fund.
• Promotion of export of leather products
• Favourable tariff regime for leather products.
• Provision of leather data and Information Management System.
• Setting & Enforcing quality standards and control for leather products.
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ROLES OF STATES GOVERNMENT
• Ensure access to land
• Provision of rural infrastructure
• Co-ordination of data collection and information management
• Provision of soft loans/Credit Guarantee
• Provision of Common Facilities (CF)
• Provision of revolving funds
• Promotion of leather products
ROLES OF LOCAL GOVERNMENTS
• Provision of rural infrastructure.
• Mobilization of raw materials producers for accelerated production through co-operatives
• Co-ordination of data collection at the primary (ward) level
• Provision of land for new entrants
• Provision of security for the project site
• Promotion of leather products through trade fairs
• Funding assistance to leather producers
ROLES OF PRIVATE SECTOR
Provision of machinery Provision of manpower Provision of raw materials (industrial inputs) Provision of expertise Monitoring and evaluation Quality control of products
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ROLES OF RMRDC
• Research and Development
• Consultancy and Brokerage services
• Raw materials sourcing and development
• Machinery sourcing
• Capacity building
• Information services and networking
• Co-ordination of MSMEs activities for footwear and other leather products.
• Information generation and dissemination
• Monitoring and Evaluation
• Linking knowledge centers and end users
ROLES OF FINANCIAL INSTITUTIONS
• Funding at low interest rates
• Business advisory services
• Training
• Monitoring and Evaluation
• Sensitization/Awareness Creation
WAY FORWARD
• Diversifying Nigerian Petroleum-based economy implies that non-oil sector, (agricultural & mineral) resources must be given serious attention in which we all have great roles to play.
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• This can be achieved by promoting a sustainable sourcing of Raw Materials for Manufacturing in Nigeria.
• Since MSMEs (96%) constitutes the bulk of production enterprises in Nigeria, and are also the major users of industrial raw materials, all hands must be on deck to assist them solve their raw materials problems in a sustainable manner.
• The Nigerian Non-oil Exportable Products International Trade Fair (Made in Nigeria Shoe Expo) is a strategic programme designed to redirect industry to focus towards increased patronage of high quality primary, secondary or intermediate local raw materials as inputs for their manufacturing processes to replace importation.
• By working together under Public-Private Partnership (PPP) the synergy between the public sector, the organised private sector and financial institutions will create an enabling environment to ensure a steady supply of Nigerian made leatherproducts.
• This ensures conservation of the nation’s foreign exchange, promotes wealth creation and employment generation.
CONCLUSION
The leather sector has the potential to employ over 4 million Nigerians and it is also capable of generating over a billion Dollars in foreign exchange through export of leather annually and over 200 billion naira in turnover through Finished Leather Goods (FLG) manufacturing. Improvement in the sector also presents the potential of reducing importation of leather and leather goods from the foreign markets, thereby improving the GDP and real per capita income of Nigeria. That's why the promotion of both the production and processing of the raw materials for leather and leather products sector must be implemented as a multi stakeholder task that must be taken seriously by all.
