Paint manufacturers receive 15 strategies to thrive
By Omolola Dede Adeyanju
The Paint Manufacturers Association of Nigeria (PMAN) in response to economic challenges has received critical strategic initiatives in order to thrive in a constantly evolving marketplace.
The initiatives were recommended at the association’s 32nd Annual General Meeting by the guest speaker, Principal Partner of Tomflims Associates International Limited, Hon.Ogundimu Leke lectured on the theme: ‘Post Fuel Subsidy Removal- Survival Strategies for Pains Manufacturers’.
Speaking, Hon.Ogundimu said, “According to the June edition of Nigeria Development Update, petrol subsidy has grown to be a huge fiscal burden on Nigeria’s economy as it increased from 1.1% of total revenue in 2020 to 32.4% in 2022 overshadowing budget allocations for health, education and social protection in the same year.”
“There was a dilemma and a tough decision the government was confronted with continuing the subsidy or deepening an unsustainable fiscal deficit or risking potential social and economic unrest by its removal. Fuel subsidy removal could save Nigeria around N7tn annually which could be channeled into infrastructure, education and health. Ghana removed fuel subsidies in 2013, causing petrol, kerosene, diesel and LPG prices to increase by 15% to 50% until reaching market levels by mid-September. They invested the savings into critical sectors.” He stated.
Hon. Ogundimu explained that as it stands, the elimination of fuel subsidy brings both challenges and opportunities.
He explained that the withdrawal of fuel subsidy led to a 150% to 200% surge in fuel costs (N500 – N600) across the country.
Also, he expressed, “Small and medium-sized enterprises are facing difficulties in accessing affordable power. As a measure to address these difficulties, the Federal Government has announced an N5bn palliative for each state, including the Federal Capital Territory, to cushion the impact of the removal of the petrol subsidy.”
He highlighted 15 critical strategic considerations Paint Manufacturers can implement for Response to Economic Challenges as; ‘Assess the; Situation; Define Clear Objectives; Strategic Planning; Cost Management;Digital Transformation; Diversification; Innovation; Customer Centric Approach; Talent Management; Risk Management; Monitor Progress; Adaptability; Communication; Collaboration; Long-term Vision.
“Paint Manufacturers may consider hedging strategies to mitigate these risks, such as; forward contracts to lock in exchange rates for future transactions; Currency hedging involves using financial instruments like forward contracts, options, or futures to protect against adverse currency movements.”
He further recommended that manufacturers embrace cost-cutting Innovations, stating that thehigh inflation and devaluation of the Naira has emphasized the importance of optimizing expenses. ‘Don’t be afraid to think outside the box and uncover innovative cost-cutting measures’ he urged.
Hon. Ogundimu concluded, “While the removal of subsidies, high inflation, and Naira devaluation have presented significant challenges for Nigerians and businesses, there is a silver lining amidst the storm. Implementing the above strategies can help transform challenges into opportunities and thrive in this new economic era. The key lies in embracing change, staying agile, and envisioning a future that transcends the obstacles of the present.”
In his welcome address, the Chairman, PMAN, Mr A.S Babatunde noted that this is the first Annual General Meeting to be held since the last one was held in 2018, he explained that the Covid 19 Pandemic disrupted economic, financial and social activities around the world especially in the areas of inputs supply chain and domestic foreign exchange availability.
Reiterating the theme of the AGM, the chairman pinpointed reasons why the theme becomes necessary at such time, saying, ‘The theme for the AGM was chosen because of the need for members of the Association to explore ways and means on how to survive in the present economic challenges posed by the sudden and unprepared removal of subsidy on petroleum by the Federal Government, which has further disrupted secial and economic activities in the country. The need for paint manufacturers in the country to look inward and come up with strategies to sustain their business so as to remain afloat also influenced the choice of the theme’ he revealed.
