Regardless of the constant market demand for important items, Nigerian producers face vital energy challenges. One producer is addressing this subject by transitioning from the unstable grid provide to gasoline crops.
Ifeyinwa C. Udeagbala, government director at Kitchen Vegetable Oil, mentioned the excessive value of grid energy and the instability of the electrical energy provide, which poses a danger to their manufacturing facility tools, influenced the corporate’s choice to change to gasoline crops, relying solely on diesel gensets as a backup.
The corporate, Kitchen Vegetable Oil Restricted, a subsidiary of Udeagbala Holdings, a producer and marketer of FMCG and industrial items, together with skincare manufacturers, edible oils, multipurpose soaps and PVC pipes for dwelling and industrial use, made the change two years in the past. It’s based mostly in Aba, Abia state.
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To sort out its energy challenges, the corporate partnered with Clarke Vitality to combine a 1.7 megawatt (MW) Jenbacher gasoline plant, sourcing pipeline gasoline from one in all Nigeria’s foremost IOC downstream subsidiaries and compressed pure gasoline (CNG) from digital pipeline suppliers.
“The gasoline plant is producing cleaner electrical energy and considerably lowering our operational prices in comparison with diesel,” Udeagbala mentioned. “It has addressed effectivity points, making our operations extra sustainable.”
Udeagbala mentioned the manufacturing challenges are multifaceted, “The problem is not only about assembly market requirements; it’s about navigating the financial and logistical boundaries that make manufacturing and distribution tough.”
These embody inflation, fluctuating uncooked materials prices, low buying energy of shoppers, and restricted entry to reasonably priced capital, which hamper enterprise enlargement.
“For a enterprise like ours, which requires heavy upfront funding in uncooked supplies, tools, and labour, we want extra sustainable financial institution rates of interest. The excessive value of borrowing erodes revenue margins, making progress difficult,” she mentioned.
Clarke Vitality offered the front-end engineering designs, equipped the gensets, commissioned the plant, and at the moment offers after-sales companies.
Yiannis Tsantilas, Managing Director of Clarke Vitality for sub-Saharan Africa, emphasised the significance of sustainable and cost-effective power options for producers.
“Globally, the provision of uncooked supplies and dependable and reasonably priced power are vital drivers in industrialising any economic system. In Nigeria, many producers expertise these challenges, particularly the problems of irregular grid provide and excessive power prices, which represent virtually 40 % of their bills,” mentioned Tsantilas, citing knowledge from the Producers Affiliation of Nigeria (MAN).
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“The visionary management at Kitchen Vegetable Oil Restricted recognised the necessity to utilise accessible gasoline instead gas, permitting them to self-generate a extra sustainable energy provide to decrease their value per product and enhance their competitiveness out there,” he added.
Udeagbala mentioned the corporate has plans to broaden into neighbouring African markets. “We’re reviewing regional financial insurance policies and the best way to scale borders complexities: delays at checkpoints and the dangers related to transporting perishable items,” Udeagbala mentioned.
She mentioned their success had been as a result of their staff’ resilience, prioritising uncooked materials high quality, long-term relationships with trusted suppliers and repair suppliers, and rigorous testing protocols to take care of product high quality. The corporate mentioned it has rejected shipments of substandard supplies to guard product high quality and tools.
