The languid Nigerian textile industry is on the verge of resuscitation as Pakistan investors are gearing up to take over Kaduna Textile Limited (KTL), Notex and Finetex. This has also raised rebound expectations for the United Nigeria Textile Limited (UNTL) and other textile industries, BusinessDay’s Real Sector Watch has exclusively gathered.
“We have investors from Pakistan who are willing to take over these companies. Negotiations are on and they have done the physical inspection of the companies,’’ said Garuba Salawa, director-general, Kaduna Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA), in a chat.
“They are looking at KTL, Notex and Finetex. UNTL is having a problem as it can only produce at 10 percent capacity. But efforts are on gear,’’ he said.
It was further gathered that the potential investors had been told of challenges bedevilling the textile companies and will have to map out strategies to deal with issues relating to cotton seedlings, which are essential raw materials used in the industry. They are also expected to pump adequate funds that will be able to raise machinery to world standards, it was gathered.
Nigeria textile industry has suffered untold hardship owing to policy somersaults, poor research and development (R&D), lack of competition in the supply of raw materials, smuggling and poor power supply, among others. This consequently led to reduction of the players in the industry from over 180 in the 1980s to 34 by 2010.
To bail the sector out of doldrums, the government established the N100 billion Cotton, Textile and Garment (CTG) Revival Fund in 2006, to tackle the problem associated with funding in the industry. The Fund, managed by the Bank of Industry (BoI), began operation in 2009, and lent to textile manufacturers at about 6 percent interest rate.
But Salawa said unequivocally that it had often been difficult for industry players to access this fund.
Mohammed Badaru Abubakar, president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), had earlier said in an interview that the N100 billion CTG intervention fund had failed to achieve the purpose for which it was established, attributing the situation to lack of consideration of issues such as uncompetitiveness of supply for raw materials, R&D, skills gap as well as insufficiency of the fund to bail out wobbling textile companies.
“The main raw material is the cotton, then the machineries. If they are not available, we cannot be competitive by world standard,’’ he said.
“Thirdly, how do we train people to work competitively? Again, what happens when the loan is not enough to change the machineries completely to be competitive to world standard?” he queried.
Earlier too, Paul Jaiyeola Olarewaju, director-general, Nigeria Textile Manufacturers Association of Nigeria (NTMAN), had told BusinessDay that funding occupied only 30 percent of the problem in the sector, as issues such as unbridled imports, smuggling, inability of government agencies to patronise local manufacturers, poor power supply and absence of black oil in the Northern Nigeria, were among numerous issues that should be properly looked into to make local players compete effectively with importers.
The BoI had said in December that 60 percent of the N100 billion CTG revival fund had been disbursed.
ODINAKA ANUDU
