Generous natural and mineral resources, good power supply and a progressive government have laid the foundations for the industrialization of Kwara State.

 

As with the rest of the Nigeria, many of Kwara State's once thrilling industries became moribund by the end of the 20th century. This is largely because government could no longer run these public enterprises profitably. The situation was worsened by Nigeria's power supply problems which forced manufacturers to make use of generators - a very costly way of generating electricity.

Kwara State's manufacturing sector has, however, entered a new era, with many of the once inactive companies being revived and completely new industries springing up across the state. The recently completed Ganmo substation has greatly improved the power supply situation in the capital Ilorin, with many manufacturers saying that they seldom have to make use of generators. The focused leadership of the current administration has also attracted many businesses and established Kwara State firmly on Nigeria's economic map.

With abundant mineral resources and vast areas of arable land, investors will find no shortage of raw materials for industrial operations. And because the state is situated in central Nigeria, with adequate road networks to both the north and the south, manufacturers and miners have a large potential market for their goods. Tertiary institutions such as the Kwara State University and the University of Ilorin also provide a steady stream of graduates that can be employed by investors.

Industry
Kwara State's industrial sector has seen a number of high-profile investments in the past decade. A South African furniture manufacturer partnered with the state government to form Kwara Ethnix Designs - one of Nigeria's leading furniture manufacturers. The factory supplies state-of-the-art furniture to five-star hotels and offices across Nigeria. The newly completed Ilorin International Airport and its accompanying cargo terminal will enable the firm to export to its European clients directly from Kwara State.

 

Another notable investment has been the recent restoration of Jebba Paper Mills by MINL Limited. The company purchased the assets of the erstwhile Nigerian Paper Mills, which halted operations 15 years ago, in 2007 and will have injected $ 75-million of fresh capital into the facility once all phases are complete. MINL plans on supplying paper to the entire West Africa region.

Further industrial concerns in the state include United Foam Products, Global Soap & Detergents Industry, Tuyil Pharmaceutical Industries which manufactures a range of pharmaceuticals and the popular Visleri Table water brand, and the Chellarams motorcycle assembly plant, to name a few.

 

The state government is actively looking for investment in fertiliser production, kerosene and gas stove manufacturing, and the resuscitation of a match-manufacturing plant. It is willing to partner with investors on some projects, although it prefers the private sector to hold the majority share in the business.

Solid minerals
With abundant solid minerals, Kwara State offers many opportunities to milling companies and firms looking to use these raw materials as inputs. Mineral resources found in the state include limestone, marble, feldspar, gypsum, kaolin, columbite/tantalite, gold, quartz, mica, talc and granite, all of which could be exploited to form the base for industrial development in the state.

Current mining activities are mainly on a small-scale basis, with some of the miners operating illegally. The administration is busy stamping out illegal mining in order to give genuine investors access to these resources.

  Good deposits of limestone and gypsum exist in the region and the establishment of a cement factory has the potential to be an especially viable business. A full feasibility study on cement production in the state has been conducted and the report is available to interested investors. Foreign interest in such a facility has already been received but there is time for other investors to submit their proposals. Nigeria currently imports close to half of the total cement used in the country. With the long-term growth of the construction industry looking positive, cement will be in huge demand for years to come.

Significant deposits of gold are found in Kwara State and the state government is looking for investors to partner with local miners already in possession of a mining licence. Exploration activities for new mineral deposits are being conducted on an ongoing basis and interested investors should contact the state government for more information on these.

Incentives

Besides the incentives offered by Kwara State, Nigeria's federal government is stimulating investment in the solid-minerals sector with business-friendly policies aimed at investors.
These include:

• A three- to five-year tax holiday
• Low income tax of between 20% and 30%
• Deferred royalty payments depending on the magnitude of the investment and the strategic nature of the project
• Possible capitalisation of expenditure on exploration and surveys
• Extension of infrastructure such as roads and electricity to mining sites 
• The holder of a mining lease shall, where qualified, be entitled to:
  - Depreciation or capital allowance of 75% of the certified true capital expenditure incurred in the year of investment and 50% in subsequent years.
  - Investment allowance of 5%
  - Exemption from payment of Customs and import duties
  - Expatriate quota and resident permit for approved expatriate personnel.
• In addition to the roll-over relief under capital gains tax, companies replacing their plans and machinery will enjoy a 95% capital allowance in the first year and 5% retention value until the assets are disposed; 15% will be granted for the replacement of an asset.

Investment Opportunities in Industrial and Solid Minerals

Cement factory
Kwara State has proven deposits of gypsum and limestone, the two important raw materials inputs for cement production. A feasibility study found that a cement factory has the potential to be very profitable. Estimated national cement consumption for 2008 stood at 13.4 million tonnes, of which only 46%, or 6.2 million tonnes, was produced locally.

Gold mining
Currently there are no significant gold-mining activities in the state and most miners only operate on a small scale. It is recommended the new investors partner with local miners already in possession of a mining licence.

Fertiliser production
The agriculture sector is growing by the day and there is a high demand for fertilizer. A large percentage of the state’s population is dependent on agricultural activities for their livelihood. All fertilizer used in the state is currently brought in from the outside. An immediate market for fertilizer therefore exists, although there is also a high demand for fertilizer in the rest of Nigeria.

Mining and processing of kaolin
Kaolin, otherwise known as China clay, is a white, inert material which is chemically a hydrous form of aluminum silicate. Commercial deposits of kaolin exist near the towns of Ilorin, Dagbalodo, Echiwada. Tsaragi, Otte and Isanlu-Isin in Kwara State. Kaolin is used in the manufacture of paper, plastics, fertilizer, rubber and paint.
For more information, contact

Furniture manufacturer invests in Kwara 
An investment by a South African company in a furniture factory bears witness to what is possible in Kwara State's manufacturing sector.

When a South African company took over the moribund Kwara Furniture in 2005, the facility was completely run-down. Five years later, Kwara Ethnix Designs is manufacturing furniture for the top hotels and businesses in Nigeria and even making plans to export to Europe and America from its base in the Kwara State capital, Ilorin.  

Ethnix Designs made its entry into Nigeria when it was approached by the Kwara State Government to invest in a furniture factory. 'They knew about our company in South Africa and suggested that we invest in a factory here,’ explains Kwara Ethnix Designs CEO Frank Cross. 

Cross says the company focuses on the up market end of Nigeria's furniture business. 'We do a lot of work for hotels and corporate clients throughout the whole of Nigeria. Last year we completed the Federal Palace Hotel in Lagos. We have also just completed the Ikoyi Hotel: he explains.

'There is a lot of opportunity in Nigeria and the economy is growing. Ilorin has grown tremendously from the time I first started coming here. At one time I was one of the very few expatriates in Ilorin and now they seem to be everywhere.' 

On his plans for the future, Cross explains that the company is looking at using Kwara State as a base for exporting. 'We have clients based in New York, London and Europe who deal with our South African company. It has always been our aim to do a lot of the work for our London-based customers from Kwara State. We can produce the same quality products so it makes sense to be exporting to the UK from here. 

'We have a new cargo terminal at the airport which we expect to use to bring in air freight. We try to buy as much raw material as we can in Nigeria but there are certain products that we need to purchase overseas. We are now looking at bringing in a Boeing 747 using the cargo-handling facilities here,' says Cross.

With an abundance of raw materials and a massive population, Kwara State has the potential to be a gold mine for manufacturers. With the state government making the right noises in order to improve the manufacturing sector, companies similar to Kwara Ethnix Designs might soon be establishing themselves across the state.