THE NIGERIAN PRINTING INDUSTRY IN THE GLOBALIZATION ERA

Digital technology has been a mixed blessing to printing companies in Nigeria; it has enhanced automated print production with attendant benefits of faster production, improved print quality and efficient service delivery. But it has also thrown Nigerian printers right into the deep sea of global competition. How can they survive a competitive global market in a Nigerian economy that places them at a great disadvantage?

A New Era of Competition
Globalization has become a force to reckon with in the printing industry. The various technological improvements in various spheres of lives have opened unhindered access to different parts of the world. As Frank Romano asserts, 'The ability to send files electronically and collaborate online on document changes and proofing has made the physical location of the printing company less important.' In the days of old, printers in Nigeria used to compete with fellow printers across the road. Now, they have printers across the globe to compete with.

The Challenges of Globalization in Nigeria
Late Chief Olu Oriade, the former President of the defunct Institute of Printing of Nigeria (IOPN) highlighted the following key points in a presentation he gave on the challenges of globalization:1

1. The manufacturing sector in Nigeria has been a major casualty of globalization as our industries are facing unfair competition arising from dumping and importation of fake, cheap and sub-standard products into the country. The globalization of the world economy and the current new industrial revolution have made Nigeria to face a number of critical challenges but they also present new opportunities.

2. The major challenge is how Nigeria's ailing industries will survive and expand in the face of intensified competition brought about by globalization, particularly taking into account the enormous challenge of attracting Foreign Direct Investment (FDIs).

3. Globalization is a MUST. But the whole process must recognize the state of our development to ensure that we do not fail in industrialization. Oriade affirmed that the vision for the industry must be to build strong and virile competitors and resilient manufacturing sector in Nigeria. This, he argued, would create a new industrial order capable of facing the challenges presented by globalization. Such an industrial order will emerge if we take deliberate and positive actions to urgently redress the present structural defects of the Nigerian manufacturing sectors. Oriade concluded that Nigeria must accept and embrace the clear and compelling challenges if we are not to be left behind in the sweep of globalization and overwhelming economic liberalization.

On his part, the Managing Director of Heidelberg Nigeria Limited, Jakob Bejer, commented that; 'Previously consumers were going abroad for quality control in their printing but Nigeria now has enough quality printers to rubbish that idea. People are going abroad now, not for quality printing but intangible things like image preservation, collection of estacode for foreign trips for those involved, even capital flight where they use the excuse of going abroad to print to stash money in foreign accounts"(THISday 2003 March 20).

In a similar vein, Rume Wilson, a researcher on the impact of globalization, says in the midst of a globalized market environment, there are countries that facing enormous challenges in partaking in the benefits of globalization. He highlights these challenges to include structural deficiencies, inefficient and inappropriate economic policies, and high existence of corruption. According to Wilson, 'all these internal problems reduce their strength and capacity to successfully compete in the global trend; rather they tend to reap the negative effects of globalization.'2

The Rising Cost of Doing Print Business in Nigeria
The printing and publishing sector of Nigeria's economy has made immense contributions to national development. According to the erstwhile Director-General of the Raw Materials Research and Development Council, Prof Azikiwe Onwualu, the pulp, paper, paper products, printing and Publishing sector of the Nigeria's economy (as at 2010) employed over 300,000 people with investments worth over N100 billion (The Punch, Wednesday, July 7, 2010 ). At present, the industry, though still vibrant, is beset with myriads of problems. One major problem is the rising cost of doing business which is regarded as one of the highest in the world. High production costs, no doubt, translate to low profit margins and even total loss of print jobs. This unfavourable factor places Nigerian printers at a great disadvantage when they have to compete for print jobs with printers in other climes, particularly the Asian countries who are presently the toast of Nigerian publishers.

Feeling the Heat of Global Competition
In an advertorial placed in a national newspaper on July 21, 2010, a body with the name 'Concerned Printers of Ibadan' lamented the sorry state of Nigerian printers. According to the body, the bulk of the printing orders given through government agencies for execution are taken wholesale to countries like India, China, Dubai, Malaysia and South Africa. Specifically, the body identified some of the issues that tend to destroy the foundation of commercial printing enterprises in Nigeria as:

a) that the Federal Government recently awarded the Universal Basic Education (UBE) contracts for the production of educational textbooks to Nigerian publishers. The order was in turn contracted to foreign printers to execute without any consideration for Nigerian printers.

b) The introduction by the Federal Government of the zero import duty on finished educational books as against a corresponding increase in the duty payable on paper and allied products from 5% to 35%. This policy improves the economy of the foreign countries where jobs are taken to from Nigeria to the detriment of the Nigerian economy.

The body of printers minced no words in stating that 'the cost of doing business in Nigeria has been compounded by the above measures, leading to heavy reverses in the industry and growing job losses.' This statement paved the way for the body's call for the intervention of the President of Nigeria. The plea is captured in the following words: 'The industry is now groaning because of the downturn of printing jobs coming to their companies, the under-utilization of their machineries, the inability to service the debts incurred on procurement of modern machinery. Workers are being laid off and printing businesses are closing down.'3

Publishers in Nigeria have also voiced their concern about the high cost of operation. Dayo Alabi, the managing director and chief executive officer of The Books Company Limited, says the bulk of books used in Nigeria are printed outside the country. In his words;

I can assure you that not less than 75 percent of books published by Nigerian companies are printed abroad. Do the companies that are here have electricity to operate? If they are dependent on generators all the time, the cost of production will go up.

the printing companies in Nigeria are using papers which are imported, they are using plates which are imported, they are using films which are imported, and all these carry duty.

By the time you put the cost of printing together, plus electricity that is not available, the cost of producing a particular book will be twice the book printed for you abroad.4

Offshore Printing: Why Printers in Nigeria are Losing Out

One of the phenomenon globalization has thrown up that affects the printing industry in Nigeria is offshore printing. It is certainly one that currently gives print investors in Nigeria a run for their money. But first, what really is offshore printing? Offshore printing refers to customers seeking global sourcing for their printing needs. It entails clients buying print from abroad. In practice, large scale buyers of print (like publishers and packaging companies) send print jobs overseas to countries like China, Hong Kong, India, Singapore and Malaysia. One of the key reasons for offshore printing is affordability. Without doubt, affordable printing ultimately generates profitability. It helps in trimming down operating costs, thereby increasing profit.

This section bothers itself with the questions 'Why are printers in Nigeria losing out to printers in more advanced nations?' 'Why is it that in spite of having high technology print equipment that compares favouarbly with others in the printing world, some print buyers would still shun Nigerian printers and take their printing jobs abroad?' In the past years, high print quality used to be the excuse but now it is clearly that of saving production costs and increasing profits. Does that mean printers in Nigeria are not offering enough competitive prices? Ahead of proffering answers to these probing questions, it is vital to point out that Nigeria is not the only country at the receiving end of offshore printing's ravaging impact. As some quick facts would reveal, even the United States is not spared the effects of offshore printing. For instance, in October 2004, a print market survey conducted in the US revealed that nearly 40% of printers thought that their customers are seeking global sourcing for their printing needs (PIA/GATF, 2004). Also, a researcher of a 2006 study on offshore printing between the United States and China, Yuen Wai Chow, notes that for every dollar spent on business services that moves offshore, US companies save 58 cents.5

A bit of comparative analysis would be of immense help in giving answers to the mind-boggling questions raised above. And Malaysia would be a suitable comparative subject. Why Malaysia? Well, Malaysia and Nigeria have been ranked as first among 20 major emerging economies. This is based on the outcome of a 2014 study conducted by Nikkei Veritas that assessed countries on the basis of their politics, economy and future potential. It must be pointed that Malaysia, in spite of receiving print orders from some countries like Nigeria, is striving vigorously to reduce her volume of print imports from China. In other words, the Government is actively promoting the export of printing services. So what is Malaysia doing that Nigeria is not doing?

The government of Malaysia encourages printing entrepreneurs by supporting them to acquire latest printing technology and state of the art machinery. The government is so supportive to the extent that the Malaysian printing and publishing industry is a significant contributor to the country's economy. The industry currently ranks among the top five largest industries in the country's manufacturing sector. This feat was achieved through:

Government Policies: Malaysia's business-friendly government policies have created conducive environment for the growth of print businesses. As part of making Malaysia a hub of manufacturing, the government of the country encourages foreign direct investment in the printing industry. For example, the earlier restriction on foreign equity has been lifted to pave way for endless flow of direct investment into the country. A report from the Malaysian Investment Development Authority (MIDA) indicates that 'since June 2003, foreign investors could hold 100% of the equity in all investment in new projects' The opening up of the Malaysian economy to foreign investment has attracted more than 8000 international companies from over 40 countries, making Malaysia their offshore base (www.mida.gov.my).

Incentives: The Malaysian government offers various forms of incentives to the manufacturing sector of which the printing industry is a part. These incentives come in the form of tax holidays and investment tax allowance. There are incentives for high technology companies, incentives for strategic projects, incentives for small and medium companies, incentives for machinery and equipment, etc.

Improved paper industry: the recent years have seen the Malaysian paper industry doubling its production capacity. This resulted in 90% self-sufficiency in the supply of paper and paper products. The country has 20 paper mills with a total capacity of about 1.3million tones annually.

Saving Nigeria's Printing Industry
The above expositions provide a basis to proffer insights to the questions raised earlier. The principal reason print jobs in Nigeria still find their ways abroad is global competition - and Nigerian printing companies are not faring well in this game of globalization. The Nigerian printing industry is operating in a hostile environment bereft of government support and investment-friendly policies unlike what obtains in Malaysia or any other country to which print jobs are taken to from Nigeria. Our paper industry is in a comatose state while competitive markets (Malaysia, China and others) are bolstering their paper industry for global competitiveness. To make matters worse, there are no significant achievements in area foreign direct investment in Nigeria's printing industry. All these (and much more beyond the scope of this article) make it an uphill task for the industry to offer competitive pricing at the global level. It requires no advanced knowledge to appreciate why printers in Nigeria are losing out to Asian countries in the offshore printing race in a globalized economy. Can we not borrow a leaf from Malaysia?

Notes
1. Oriade O. (2008). Institute of printing and challenges of globalization. A presentation at the National Seminar by the Institute of Printing of Nigeria. Published in Printing News, Dec. 2006, pg. 20 & 24

2. Wilson, Rume (2010). Globalization and the Nigerian manufacturing sector. Retrieved June 19, 2014 fromwww.scribd.com

3. State of Nigeria's printing industry: An open letter to the President. The Punch, Wednesday, July 21, 2010.

4. Vanguard, (May 10, 2010). 75% of books published by Nigerian companies are printed abroad. Retrieved June 19, 2014 from www.vanguardngr.com/2010/05/75-of-books-published-by-nigerian- companies-are-printed-abroad/

5. Yuen Wai Chow (2006) A study of offshore printing between United States and China. A Masters thesis at Rochester Institute of Technology. Retrieved June 20, 2014 from http://scholarworks.rit.edu/theses/3757

Afolabi teaches digital printing and publishing at the department of Printing Technology, Yaba College of Technology, Lagos. He blogs at http://graphiccomnigeria.wordpress.com

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Articles by Abdul-Rasheed Afolabi