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The Nigerian packaging sector has been in existence since the 1960s, and started with about 50 plastics companies. Over time, this sector has grown in size, to over 3,000 companies, and has become increasingly sophisticated with new technologies introduced to the market.
The Nigerian plastics subsector is an emerging industry with the potential to drive growth within the country’s manufacturing industry. The sector has a production capacity of over 100,000 tons per year. Companies range from small extrusion shops to big multinational injection molding companies employing over 500 persons. Nigeria’s plastics subsector comprises of both polymer production and plastics conversion.
The activities of the packaging subsector are regulated by the National Agency for Food and Drug Administration and Control (NAFDAC), Standard Organization of Nigeria (SON) and Weight and Measures Department of the Ministry of Trade.
INVESTMENT OPPORTUNITIES
The Packaging sector presents a U$8.47 billion opportunity in import substitution.
The demand for polythene material (a popular form of plastic packaging) in Nigeria currently stands at 80 million metric tons representing a 30 million metric tons increase over a 5-year period.
Growth in the plastics and packaging sector has been driven by the increasing sophistication of the Nigerian middle class. The plastics subsector is expected to grow by 7% over the next 10 years. Packaged foods have seen increased demand following the 40% growth of organized retail outlets evidenced in the last 5 years. In addition, rapid growth in the FMCG sector has been a major driver: a trend that is expected to continue.
Nigeria’s labor force population increased to about 78.4 million in Q1 2016, with an average monthly wage of N41, 942 (US$120).
Main investment Opportunity
Investment Incentives
Testimonials
Nampak
In 2014, Nampak invested US$301 million (through the purchase of Alucan) into Nigeria’s packaging sector, bringing the company’s headcount to around 800 in Nigeria in their four business pillars – glass; cardboard; plastics (rigid plastic); aluminium cans and metal cans. Nampak’s factory in Nigeria is expected to produce 50,000 tonnes of glass a year.
Nampak is currently seeking to invest circa US$13 million in a new food canning and clean room production facility in Nigeria.
For more information, please visit: http://www.nampak.com/#
GZ Industries LTD
“Having a local supplier of Cans put an end to the plight of Nigeria’s brewers and bottlers. Local supply is significantly cheaper, reduces the long lead times for imports from abroad, and it eliminates the stock levels variability created by damages to Cans during shipment.”
GZ Industries Limited (GZI) was incorporated in Nigeria on June 3, 2006. GZI is an indigenous Company owned by; Verod Capital Management; a group of four individual investors, Ashmore Private Equity, and Standard Chartered Private Equity.
GZI has established a factory in Agbara Industrial Estate, Ogun State near Lagos, to manufacture Aluminum beverage cans for brewers and bottling companies in Nigeria and other West African countries. GZI’s initial factory production capacity was 600 million cans. However, GZI’s commitment to progressive expansion has resulted in a capacity of 900 million cans by 2011 and has achieved 1.2 billion cans per annum in 2012.
For more information, please visit: http://www.gzican.com
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