Pentagon Plastic Industries Ltd (PPIL), a leading manufacturer of high-quality, cost-effective plastic housewares for home and industrial use, despite challenges, says it’s working to strengthen Nigeria’s position as a leading exporter of finished plastic products across the African continent.
Established in 2002, Pentagon Plastic Industries Ltd (PPIL), which is part of the BL Chainrai Group, is a leading manufacturer of high-quality, cost-effective plastic housewares, garden furniture, and rigid packaging solutions in Nigeria.
To carry out its operations in the midst of limited power supply from the national grid, the company relies on Clarke Energy, a multinational specialist in distributed power generation solutions, to mitigate the impact of inconsistent supply.
“With Clarke Energy, we have a partnership that goes back to 2014. The company carried out a technical study and recommended the deployment of the Jenbacher gas power plant. It has been serving us well since 2015,” said Shyam Barakale, General Manager of Pentagon Plastic Industries Ltd (PPIL).
Barakale said that if regular and consistent electrical power can be sourced from the grid, “we can concentrate on our core activity which is plastic manufacturing rather than investing in building and maintaining a power plant.”
“PPIL and Clarke Energy have a robust relationship over the years which has led to more productive service delivery,” said Barakale.
More specifically, the leadership of both companies enjoys an excellent relationship, which has helped to facilitate a seamless scheduled 30,000hours overhaul maintenance on their 1.8MW single module INNIO Jenbacher gas engine last year since its commissioning.” Yiannis Tsantilas, the MD of Clarke Energy, said
“The gas generating set has given us significant cost savings and increased our production efficiency,” said Barakale.
Clarke Energy provided a 1.8MW gas power plant for PPIL which the company purchased and regularly maintains.
However, PPIL like other plastic manufacturing companies says they are constrained by the problem of sourcing feedstock or plastic raw materials, “our biggest challenge is that we do not have any local substitute and have to import over 90 percent of our requirement.”
The impact of this is that it has raised costs for plastic manufacturers which often gets added to the product cost passed on to customers.
“We have to invest a lot in raw material sourcing and this involves sourcing for foreign exchange which makes us vulnerable to volatile exchange rates. This adds to production costs and often results in delays,” said Barakale.
PPIL operates two state-of-the-art manufacturing facilities producing over 200 different types of plastic products and generating over $28million in revenue annually.
The first factory located in Lagos State caters to the houseware and furniture segments using the latest international technology and equipment. The second located in Ogun state, inaugurated in early 2020, caters to the rapidly growing market demand of the rigid packaging segment using Husky and Sacmi machines.
According to Barakale, the Nigerian market presents many opportunities for plastic manufacturers with its large population and strategic location to serve other markets in Africa.
PPIL ships through their distributors, some of its plastics to several African countries including Benin, Chad, Cameroon, Burkina Faso, even as far as Sudan, and this export market represents 20 percent of the company’s distribution network.
The challenge with sourcing feedstock from outside Nigeria is the added challenge of foreign exchange volatility. There is also the problem of the skill gap in the plastic sector, and inadequate power supply from the grid.
According to Barakale, the plastic feedstock is a byproduct of the petroleum industry refining process and the production of high-quality plastic material is a very capital-intensive venture hence the need to localise sourcing raw materials.
Looking at the volumes of raw materials imported into the country, you would see that if Nigeria has a bigger refining capacity, a lot of these foreign exchange paid to import them would be saved, Barakale said.
Barakale said that PPIL in its 19 years of operation has contributed to the growth of the economy including employing about 500 Nigerians and its export of quality plastics contributes to foreign exchange earnings for the country.
PPIL has established a strong network of distributors located strategically throughout the country. These are complemented by its distribution arms in Kano and Delta states.