Economy

Operational cost forced coys to prune down workforce by 40%- says MAN

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Written by Maritime First

Members of the Manufacturers Association of Nigeria (MAN) have been forced to reduce their workforce by 40 per cent due to high operational costs.

Its South-West Chairman, Mr Lanre Popoola, made this known in an interview with the newsmen on Tuesday in Ibadan.

Popoola said that the outrageous cost of production has very great consequences on the operations and workforce.

“You will find out that in the last one month, the workforce in factories has really dropped, those that were running three shifts now run one or two.

“The hardship is not only on the manufacturers but on employment.

“If nothing is done, we will have more local manufacturing companies closing down and more workforce laid off.

“We have reduced our workforce by about 40 per cent, because we are unable to cope with salaries due to the prevailing circumstances,” the MAN chairman said.

Popoola then urged the Federal Government to improve the power supply and provide palliative to the manufacturers.

He particularly sought for access to foreign exchange for manufacturers and to control the over rising cost of diesel.

“The bulk of our forex is being sourced from the black market, that is the level we are now, we cannot plan.

“Diesel is between N900 and N1000; so, we juggle between diesel generator and a steam engine for our operations, cut down the number of working hours or reduce our shifts to one or two,” he said.

Popoola said that though, the precarious situation of the manufacturing sector accumulated over the years, the Federal Government should take measures to check the situation.

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According to him, the reality now is that the disposable income of the people has gone down, so people are not buying stock.

Popoola said: “They are just buying what they need as at the time it is needed.

“The cost of production is very high, exporting has been difficult, because of the free market occasioned by the Africa Continental Free Trade Agreement.

“It makes countries like Morocco, Tunisia, and Egypt that have constant light and low cost of production have the upper hand.

“So, we cannot export because the cost of production in Nigeria is very high.

“Things would get better if we can get forex at CBN rate and there is a constant supply of electricity.

“It will aid the nation’s economy because we will be able to produce and sell at affordable prices.”

 

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Maritime First