Manufacturers’ Energy, Raw Materials Cost Hits ₦1.01tn Amid Rising Input Pressures
Nigeria’s manufacturing sector is facing renewed cost pressures as expenses linked to power supply and production inputs surged sharply in 2025, underscoring the fragile operating environment confronting local producers despite recent policy interventions in the energy space.
An analysis of unaudited financial statements of eight listed manufacturing firms shows that manufacturers’ energy, raw materials cost rose to ₦1.01 trillion in the nine months ended September 30, 2025.
This represents a 21.1 per cent increase from ₦828.6 billion recorded in the corresponding period of 2024, reflecting persistent inflationary pressures across critical input segments.
The figures, derived from cost-of-sales disclosures, cut across companies operating in cement production, food processing, breweries, glass manufacturing, healthcare, and agribusiness—sectors considered central to Nigeria’s industrial base.
Manufacturers’ energy, raw materials cost driven by fuel and power inflation
Manufacturers’ energy, raw materials cost surges across sectors
A closer look at the data reveals that energy expenses alone climbed to ₦195.36 billion, up 18.7 per cent from ₦170.51 billion a year earlier. Meanwhile, raw materials and other consumables rose to ₦811.51 billion, marking a 21.7 per cent increase from ₦658.11 billion in 2024.
Industry analysts attribute the trend to a combination of higher fuel prices, foreign exchange volatility, increased logistics costs, and sustained reliance on self-generated power due to unreliable grid electricity.
According to financial analysts, cost of sales—commonly referred to as cost of goods sold—captures the direct expenses incurred in producing goods, making it a reliable indicator of the operating pressures manufacturers face.
Cement, food, brewery firms record sharp cost increases
Among the companies reviewed, BUA Cement Plc reported energy costs of ₦113.42 billion, representing an 11.8 per cent increase from ₦101.45 billion in 2024.
The company’s spending on consumables rose even more steeply, climbing 27 per cent to ₦4.44 billion from ₦3.49 billion, highlighting sustained input inflation despite expanded production volumes.
Similarly, BUA Foods Plc recorded energy expenditure of ₦46.45 billion, up 25.3 per cent from ₦37.06 billion in the same period of the previous year.
While the company did not separately disclose consumables, analysts say the surge reflects the continued impact of diesel costs and electricity tariffs on food processing operations.
In the brewing segment, International Breweries Plc reported ₦260.17 billion in materials consumed and production overheads for the nine-month period, compared with ₦210.56 billion in 2024—an increase of 23.5 per cent.
Energy costs were embedded within production overheads, a common reporting practice among brewers.
Nigerian Breweries Plc also recorded a substantial rise in production inputs, with raw materials and consumables increasing to ₦486.88 billion, up 19.5 per cent from ₦407.20 billion.
Although energy costs were not stated separately, market watchers note that higher production volumes and cost inflation likely contributed to the increase.
Glass, agribusiness firms feel sustained pressure
The pressure from rising manufacturers’ energy, raw materials cost was equally evident in the industrial and agribusiness segments.
Beta Glass Plc saw material consumption rise 21.8 per cent to ₦28.01 billion, while energy costs covering fuel, gas, and electricity increased to ₦24.52 billion from ₦22.81 billion, a 7.5 per cent rise.
In agribusiness, Presco Plc recorded one of the steepest increases, with raw materials costs jumping to ₦25.03 billion from ₦9 billion in 2024—an increase of 178.1 per cent.
Energy expenses were not disclosed separately, but analysts say the spike reflects rising input costs across plantation operations and processing activities.
UAC Plc reported electricity and power expenses of ₦4.87 billion, up 22.9 per cent from ₦3.96 billion, compounded by higher vehicle maintenance and fueling costs.
In the healthcare sector, Fidson Healthcare Plc posted energy costs of ₦3.99 billion, representing a 30.8 per cent increase from ₦3.05 billion, pointing to the energy-intensive nature of pharmaceutical manufacturing.
Few firms record marginal relief
Only a handful of manufacturers recorded modest relief. Champion Breweries Plc reported that raw materials and consumables rose 43.5 per cent to ₦6.98 billion, but energy and water costs declined slightly by 3.3 per cent to ₦2.11 billion, making it one of the few firms to benefit from temporary cost easing.
Manufacturers warn power supply remains key challenge
Reacting to the trend, Segun Kuti-George, National Vice President of the National Association of Small-Scale Industrialists, said high energy costs continue to undermine competitiveness, despite recent government interventions.
He noted that while fuel price stability has improved compared to earlier projections, electricity supply remains the biggest bottleneck.
“Energy costs are still high, even with Band A tariffs. However, without recent interventions, the situation would have been far worse,” Kuti-George said, adding that expanded local refining capacity is critical for long-term price stability.
He stressed that addressing power generation shortfalls and distribution inefficiencies is essential if manufacturers are to withstand rising input costs and remain competitive.
