CHAPTER ONE
INTRODUCTION
1.1 THE PROBLEM AND ITS SETTING Every industry operates within two sets of constraints. Internal constraints are those problems within the organization and over which the enterprise has reasonable amount of control. Personnel problem, capacity utilization and the techniques or process of production are some of such factors. External factors could pose formidable problems to an enterprise. The problems are made more severe by the fact that these problems are caused by factors outside the competence of a given enterprise to control. Examples of such factors are government regulation, traditional or cultural values etc. The bakery industry in Nigeria has been a victim of externally imposed constraint. Hitherto, bakers depended on local millers who produced their vital raw materials, flour from imported wheat. Government banned the importation of wheat and wheat product in 1986, thereby, sending shock waves to this very well established and expanding industry. Wheat products has started to consume an unacceptable amount of the nation’s foreign exchange as the table 1.1.1 below clearly demonstrates, as well as figure 1.1.1 in page 3.
Table 1.1.1 Foreign Exchange Spent on Wheat and Food Import 1981 – 1985
Import 1981 1982 1983 1984 1985 N,000 N,000 N,000 N,000 N,000
Total food 1,820,215 1,642,245 1,296,714 843,246 946,567
Wheat 159,422 79,629 255,717 243,067 327,870
C/o of total 9% 5% 20% 29% 35%`
Source: Federal Office of Statistics, Lagos Given the above circumstances, there was a clear need for government action to check the outflow of the nation’s declining foreign exchange earnings through what important. Besides, it can also be argued that there were suitable local substitutes of wheat flour for bread baking; rice, cassava, maize and sorghum have been mentioned as such suitable substitutes. To some