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Chemstar Paints mulls backward integration to reduce base on imported raw materials
Leading paint manufacturing group, Chemstar Paints Industries Nigeria Limited has started thinking homeward as it has started backward integration plan designed to source all relevant raw materials needed in the production of paints.
Apart from trying to run away from forex challenges, the company said the idea is to create more jobs as the patronization of local suppliers will deepen their capabilities to employ more Nigerians.
In a press conference, the Group Managing Director and Chief Executive Officer of the company, Emmanuel Awode, explained that the business community is still grappling with issues such as the scarcity of forex to import raw materials and myriads of bottlenecks hindering investments in the nation and the development has reshaped the thinking of the company.
“We have begun to look inwards to seek for alternatives that we can use to replace some of the imported raw materials. This has helped us greatly and coupled with the fact that we have very loyal customers that stood by us throughout the year.
“Despite the $1 billion foreign exchange from the Central Bank of Nigeria (CBN) to manufacturers, we have not been able to access the fund, because the demand for forex is more than what the CBN disbursed, there was no way it could go round and we still have to source for our forex from the black market,” he said.
He said the paint industry has also had its fair share of the economic downturn, saying that about 60 per cent of its raw materials for production still depend largely on imports.
He said investment in research and development would be deployed to meet the ever changing needs of its numerous consumers in the country, stressing that “We are here to have our Chemstar customer forum and it has become a tradition. We have been doing this for the past 21 years. It is to celebrate and appreciate our customers for their loyalty and patronage of our products for the last economic year. About 95 per cent of our businesses are through our distributors and since they are doing about 90 per cent of our business, we do not have any option not to celebrate them,” Awode noted.