Manufacturers estimate losses as production costs increase by 30% in a single year.
Nigerian manufacturers are groaning under the weight of high production costs as foreign exchange issues and erratic power supplies continue to stymie their operations.
According to a review of the financial reports of 22 enterprises listed on the Nigeria Exchange Group (NGX), the total cost of production for the companies in various categories will reach N2.19 trillion in 2021.
This was 30.48 percent more than the enterprises’ N1.68 trillion production cost in 2020.
The businesses were selected from the cement, paint, pharmaceutical, and consumer products industries.
When compared to the inflation rate, manufacturing costs were greater than the 18.60 percent recorded in June.
This means that the corporation will have to pass on costs to customers in order to make up for lost revenue.
A breakdown of the data shows that Dangote Cement, BUA Cement, and Lafarge Africa jointly incurred a total manufacturing cost of N741.17 billion.
The amount was 28.68 percent greater than the N575.95 billion spent by the three corporations in 2020.
Dangote Cement, Africa’s most capitalized corporation, spent N129.95 billion on fuel and power consumption this year.
This was also 31.29 percent more than the N98.97 billion spent by the company the previous year.
Similarly, BUA Cement spent N43.58 billion on fuel in 2022, which is 64.66 percent more than the previous year’s expenditure of N26.46 billion.
The major publicly traded consumer products companies, such as Nestle, BUA foods, and others, incurred N1.40 trillion in total production expenses, a figure that was 31.12 percent higher than the previous year’s N1.07 trillion.
The main medication companies in Nigeria, Fidson Healthcare, GlaxoSmithKline, May and Baker, and Neimeth Pharmaceutical, combined incurred N38.08 billion in the first six months of the year.
This was also 41.13 percent higher than the previous year’s figure of N26.98 billion.