02/21/2014

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NIGERIA: Plastic manufacturers seek govt's intervention on special levy

It is learnt that the imposed levy has continued to hike the price of key raw materials needed for the production of plastic products, thus necessitating consumers to pay more for products that should have cost lesser.

The stakeholders noted that with government incentives in terms of provision of gas at a massively subsidized rate, Indorama's cost of production remains one of the lowest in the world.

Indorama-Eleme Petrochemical Limited is a core investor in the hitherto federal government owned Eleme-Petrochemical Limited.

According to them, the special levy imposed on the key raw materials serve as a channel for the firm to make more money, as the firm increased its price equivalent to the levy increase in March/April 2013.

"By doing this, the cost to import raw materials in Ghana or Benin Republic became cheaper as the plastic industry in Nigeria pays a higher cost due to this levy.

"Analysts therefore wonder whether the incentives granted to Indorama have really been of advantage to the Nigerian economy and the plastic industry. This is because the company seems to be the only one benefitting from this levy while the common man is suffering with the burden of higher price.

"Apparently uncomfortable over the poor patronage of its polymer resins from the local plastic manufacturers, Indorama, by its letter dated 3 October 2013, petitioned the President of the Manufacturers Association of Nigeria (MAN) and same copied to the Chairman, the Economic and Financial Crimes Commission (EFCC), alleging that 17 local plastic manufacturers have been importing polypropylene with H.S. Code 3902.1000.00 under H.S. Code 3902.3000.00 belonging to propylene copolymer”.

With negotiations and talks proving futile, plastic manufacturers maintained that copolymer does not attract import levy from the federal government as it contains less than 95 % propylene by weight while the rest weight is ethylene with CAS No: 9010-79-0 and HS code 3902.3000.00 compared to the levied polypropylene homopolymer.

"The codes attached to each of the products are the same internationally. This is because Nigeria is one of the 148 countries that are parties to the HS convention since 1988. The country is also one of the 179 member countries of the World Customs Organisation since 1963. All these nations recognize and adopt HS 3902.3000.00 for copolymer. The copolymer code therefore does not form part of the ones that attracts a levy”, the manufacturers added.

The manufacturers added that the effect of such import levy on copolymer would be adverse on the Nigerian public considering the cost effect on consumers.

Source: Daily "The Guardian", Lagos; 10 Feb 2014
(Syed Rashid Ali, Karachi, Pakistan)



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