Why Foam Production In Nigeria Is Expensive, By Industrialist

Beyond the general problem of manufacturing in Nigeria,  foam companies have peculiar challenges that make production very expensive, Deputy Managing Director of Royal Foam Products Nigeria Ltd, Jibril Mohammed, said in Enugu on Wednesday.

He made this known to newsmen during the official opening of Royal Foam depot for the  Southeast region at the Emene Industrial Layout.

Mohammed said the peculiar challenge for foam companies in Nigeria is availability of raw materials, especially as the major chemicals used in production are very expensive , much more than the industrial machines. ”Most of the chemicals used in the foam industry are imported because they  cannot be sourced locally,” he said

 

The industrialist further explained that  the raw materials cannot be sourced from any of the African  countries.

Explaining why the raw materials are usually expensive, Mohammed said they are gotten from crude oil extracts as by-products and so, are usually affected by volatility of crude oil prices in the international market.

He said, “One of the major challenges is sourcing raw materials. Raw materials for foam production, especially the two major raw materials are actually TDI (Toluene Diisocyanate) and poly (polyurethes resin). You can’t do without them. In fact they are the mattress. There is no country in the whole of Africa that produces these two items. What they do in Africa is just importation. We import ourselves.

“Looking at the entire world economic crisis, and the fact that these two raw materials are entirely by-products of crude oil, any time crude oil goes up, it affects every of the by-products. It is internationally induced cost. If price of dollar goes up, it affects us. If there is any crisis between countries affecting prices of oil like we have now between Ukraine and Russia, it definitely affects prices of the raw materials, making it to go up, and even leading to scarcity.”

Responding to why the raw materials cannot be sourced locally since Nigeria is a producer of crude oil, Mohammed said there is lack of technical and managerial expertise on how to go about producing the raw materials in the country, hence, the reliance on importation.

He added that the key to overcoming the challenge of raw material scarcity is ability to understand what happens in the international market and adopting measures to boost stock (of raw materials) to take care of that when the scarcity eventually comes.

Speaking further on the challenges faced by players in the sector, the Royal Foam DMD, pointed out that heavy taxation in Nigeria is another major negative factor that discourages investment.

He advised that government at all levels should see the need to create enabling environment for businesses to thrive, one of which is granting what he called “tax holiday” to infant businesses for some number of years to enable them break even and start earning profits, which according to him, would help in creating more jobs and boosting the economy, thereby reducing the rate of criminality in the entire country as many who indulge in such are unemployed.

He equally called on business leaders in the country especially in the south to develop the attitude of taking risks in making investment especially in production which he said is evergreen unlike trading that is more susceptible to winding up.

Royal Foam Products Nigeria Ltd, was incorporated in 1980, and manufactures foam products such as mattresses (luxury, spring and orthopaedic), pillows, bed spread, pillow covers, duvets, bed bases and bed frames of different sizes and classes for all segments of the market both locally and internationally. For mattresses, the company has varieties such as royal premium, elite, infinity, economy, Marvel, Amaze, ortho, gallant, amarya. These classes of mattresses as Mohammed claimed have super quality and last very long.

Also speaking at the event, the Royal Foam general manager, South, Ezekiel Omo Akhiromen, the company plans to expand southward having gain large market share in the North where it started about four decades ago.

Akhiromen noted that the Enugu depot which has been in operations for the past few months is to serve demands of their distributors in Southeast. He also indicated that the company plans to open another depot in the South-south in the coming months.

On the special quality that marks the product out in the midst of competition, the GM South said they believe in producing and delivering quality products that are also affordable to all classes – the rich, the poor, and the average.

“As you can see, for instance, when you look at our fabrics, you will understand that they stand out among other competitors. The belief of Royal Foam is to give the best quality product at an affordable price.

“One of the advantages that we also have is that we are cheaper than our competitors despite having a better quality. That’s why we have labels of warrantees on our mattresses, because we know what we are dishing out,” Akhiromen said.