Imported Tyres Replace Local Production at Dunlop Nigeria
In late April Dunlop Nigeria’s long awaited end of local production was realised. Less than four years after the decision was taken to invest an estimated 6.5 billion naira (£29.4 million) on radialising plant technology with a view to further boosting commercial vehicle tyre output, domestic production has been replaced by tyres imported from South Africa.
The Dunlop Nigeria plant held a capacity to turn out 300,000 heavy-duty tyres per annum and manufactured products such as the Supersteel 315/80, which was launched in May 2006. Its demise so soon after upgrading is being blamed upon a combination of the faltering domestic economy and an influx of cheaper foreign produced tyres. The unreliability of power supplies in Nigeria is also said to have pulled the plug on the manufacturer’s competitiveness, and the company’s hope of a reliable source of affordable carbon black from local refineries was never realised.
When Michelin ended production in Nigeria three years ago, Dunlop’s reaction prompted the Economic Community Of West African States Bank for Investment and Development to grant the company a US$8 million loan to help modernise manufacturing processes with the aim of reducing operating costs. “More job opportunities would be created where the cost of production is cheaper, and the goods produced in those countries may relatively be cheaper, even up to 30 per cent than ours, because of the high production costs we face here every day,” confessed Dunlop Nigeria managing director Mohammed Yinusa at the time.
Yinusa’s assessment of market forces have proven to be accurate, to the local plant’s detriment, and recently Dunlop Nigeria reached an agreement with Dunlop South Africa owner Apollo Tyres to locally market and distribute the South African Dunlop product. The sale of plant equipment from the Nigerian factory to another company is under discussion, and it appears this machinery will be exported to another country where conditions for manufacturing are more favourable.