…Edo, Delta, Ondo, other rubber-producing states in first line to gain
A Chinese firm, Sailun Tyres, says it is looking at the prospects of establishing a tyre manufacturing factory in Nigeria to serve the African market and that it is currently conducting a research to this end.
Mr Xie Xiaohong, Executive President of Salium Tyres, who headed a 13-member delegation to Nigeria, gave the information in an address to journalists in Lagos, Monday.
Xiaohong said the company already has in its hands an extensive report on tyre uses in Nigeria, the peculiarity of the environment and the nature of the roads.
He said his company’s interest in Nigeria was sparked by President Bola Tinubu’s recent actions and commitments to rejuvenating the economy and encouraging foreign investment.
“We heard that the new President, Bola Tinubu, wants to reinforce the economy of the country. And we know that you can only achieve that with effective transportation and quality tyres developed for your road transportation,” Xiaohong said.
“We came to Nigeria to do some research on the tyre market for more trade and strengthen our partnership with Tanzanite Ltd.”
He further stated that Sailun develops tyres that are tropicalised and suitable for Nigerian roads, noting that China had similar road conditions in the year 2000 and its tyres were reinforced for durability.
The visiting executives of Sailun Tyres also engaged leaders of Tanzanite Ltd, a prominent distributor in Nigeria and Africa, in strategic discussions to identify opportunities for mutual growth and explore new ways to enhance customer satisfaction.
The opening of an auto tyre plant in Nigeria would return the country to its place of pride three decades ago 30 years ago, when it had two plants, Dunlop and Michellin, manufacturing tyres in the country, exporting the product across the subcontinent and sustaining hundreds of jobs locally.
Experts say that the collapse of the local tyre industry was a direct consequence of the policy somersaults of the Federal Government in 2006 by way of significant reductions of import tariffs, which exposed the local industry to cheaper and often substandard foreign products, in the face of poor infrastructure, especially power generation which crippled local manufacturing.
On how to attract investors into the tyre manufacturing, the Lagos Chamber of Commerce and Industry (LCCI) has repeatedly advocated that government first encourage Dunlop and Michelin to return because they are familiar with the terrain and can take off more speedily and efficiently.
The LCCI has likewise advocated tax holidays for five years and removal of duty on the importation of machines and other equipment, among others, and a raise of duties on imported tyres to encourage local manufacturers.
The experts further say that the Central Bank of Nigeria should extend funds to encourage local production of tyres.
However, the Federal Government has in the past few weeks taken affirmative actions and made statements indicating a liberalisation of the economy, which augurs well for foreign investors.
Government’s recent policy decisions include the unification of the country’s exchange rates, deferment of tax implementation and removal of subsidy, which allow investors to plan and project for the future, as market forces will be the determing factor, as against forceful and unsustainable controls which led to economic distortions and price fluctuations.
Local and foreign stakeholders have lauded these moves.
Furthermore, Nigeria already has relative advantage in the production of rubber, which is the base ingredient for tyre manufacture.
Natural rubber production in Nigeria was about 53,000 tonnes in 2017. Rubber is grown in Edo, Delta, Ondo, Ogun, Abia, Anambra, Akwa Ibom, Cross River, Rivers, Ebonyi and Bayelsa states. Tyre production facilities were closed down and local consumption of natural rubber is now confined to the footwear sector and for export.
The rubber-producing states and the nation as a whole would prosper and expand from the demand that local tyre manufacture would generate.
