Dunlop Nigeria Embarks on Strategic Redirection

Dunlop Nigeria Plc, the only surviving tyre manufacturing company in Nigeria, has embarked on a strategic redirection of its business in order to restore shareholder value which has been deteriorating as a result of consistent losses in the tyre business.

The Company’s recent N8 billion expansion into the Heavy Truck Radial segment has been frustrated by reversal of Government Policy on tariff for imported truck/bus tyres from 40% to 10% at the beginning of 2007 which has created unfair and inequitable advantages for importers of finished tyres.

Furthermore, the dichotomy between tariff for Car tyres (50%) and Truck/Bus tyres (10%) is also being abused by these importers, both in terms of tariff and haulage evasion.

Additionally, the evident decay of local manufacturing infrastructure, particularly the epileptic power & gas supply situation, imposes add-on cost amounting to about 40% which puts locally-produced tyres at a disadvantage.

The whole situation certainly confers undue advantages on importation rather than local manufacturing, which does not augur well for the interest of our great Nation, and we have been drawing attention of Government to this uneconomic reality in the last 18 months, without success.

“Thus, we are forced to scale down local tyre manufacturing operations due to the very harsh business environment.”

“Meanwhile, we have embarked on a strategic business redirection in order to restore shareholder value. Our Rubber plantation business is continuing and performing satisfactorily while being further expanded. We are equally harnessing available opportunities for growth in other sectors of the economy.”

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