African Industries Group, Nigerias leading steel manufacturer has appealed to the federal government to urgently intervene in the steel sector in order to avert an imminent collapse of the industry, which he said is said to be the backbone and main thrust of all developed economies in the world.
Disclosing this while addressing a press conference in Lagos on Monday, the Chief Operating Officer (Steel), African Industries Group, Mr. Sanjay Kumar, said that there are over 30 private Steel plants producing various Steel products in Nigeria with an investment that is well over N100billion since inception but the investment is in danger if nothing meaningful happens soon.
Federal Government of Nigeria under the present leadership can reverse the trend for the survival and resuscitation of the Steel industry which is currently facing serious challenges with measures such as creating of a local content policy of using made in Nigeria iron rods in all small and big government projects and prevention of dumping of steel products in the country.
Government should also create a special power tariff for the steel Industry and make available an intervention fund at lower interest costs to prevent the immediate collapse of this private steel industry where many are operating below 30percent capacity and overburdened with high interest costs, while waivers/concession may not stop completely for certain infrastructural development, the portion of Iron rod importation in any waiver should be expunged. Government should consider curtail of the multiple taxation imposed by the Federal, State and Local Government agencies and review the high cost of Gas considering that Nigeria has huge gas reserves. The cost of Gas in Nigeria is US$7.31/mmbtu as against US$4.2/mmbtu in USA, he said.
According to him, the African Industries alone has invested well over 20billion naira in Nigeria, adding that after Agriculture, the Steel Sector in Nigeria is the highest employer of labour, insisting that the livelihood of more than 1m people depends on these private Steel companies.
He however regretted that the Steel Industry is currently at the verge of total collapse just like what happened to Textile Industry if the government does not come to her rescue urgently.
“Already about four steel plants have completely shut down and more will follow soon because many are currently operating below 30% of production capacity. Most of these steel plants are now operating two weeks a month and are closed for the remaining two weeks of the month due to lack of demand. Cost of restarting each time is very high and adds to the cost burden of the ailing steel companies. Steel consumption is largely driven by government initiative on infrastructure projects.
“The major area of rescue of the Steel Sector from collapse is for the Federal Government to make a definite policy of patronizing made in Nigeria steel products (iron rods) for all government projects and give specific directive to all their contractors to buy made in Nigeria iron 30% of production capacity. There is complete neglect of the involvement of the players in the steel sector in the formulation of the Nigeria industrial policy. All over the world, due to importance of Steel in the development of the economy, the views and opinions of the key players from Steel Industry are usually sought and obtained by the Government in the formulation of economic policies as being done for the Oil or Financial Sectors.. Unfortunately in Nigeria, the Steel Sector has been left out all these years, he stated.
Sanjay stated that African industries is the largest steel manufacturing group in Nigeria, adding that the group has four steel manufacturing plants located at Ogijo (Ogun), Ikorodu (Lagos) and Suleja (Niger). “African Foundries (AFL), the Flagship company of African Industries Group is one of the few steel companies in Nigeria producing iron rods meeting British standard (BS 4449-2005 Grade B500B). It has capacity to produce 0.5 million tons of BS 4449-2005 Grade B500B Iron rods. AFL has international standard testing laboratory equipped to measure mechanical and chemical properties of Iron rods and automatically test its geometry done in European steel plants. AFL follows all management practices laid under IFC and World Bank guidelines. African Industries got involved in the Steel manufacturing in their quest to meet a gap between demand and supply at the beginning of democratic dispensation in Nigeria in 1999.
“At that point in time the Government started with the rebuilding of infrastructure and there was a clarion call for direct foreign investment. There was confidence in the Federal Republic of Nigeria for foreign investors to invest because of the democratic ideals. Furthermore, we wanted to be part of the foundation of the industrial policy of Nigeria knowing too well there would not be any concrete industrial revolution without Steel, he stated.
Contributions to the economic growth of Nigeria
With the investment of over N20b in Steel Plants, African Industries Group has generated employment well over 7000 people and is supporting livelihoods of over 100,000 Nigerians. It has helped Nigeria conserve precious foreign exchange by way of import substitution. It has contributed significantly to Government revenue through various taxes. We are actively involved in various corporate social responsibilities and also engaged in increase of skill acquisition and training of Nigeria youths.
All over the world the issue of quality is universal but the question of grades and it is same in Iron rods. We are manufacturing the highest quality standard of Iron rods that has been established with the production of BS4999- 2005 Grade B500B which has international certification. The product is also supported by precise quality control measure enforced by SON (Standard Organization of Nigeria) over the years. SON has lived up to their lived up to their expectation by ensuring strict compliance by the private Steel producers through the certification of quality standard of Iron rods. The impression has changed greatly in recent times because some of the blue-chip multinational firm are currently using Made in Nigeria Iron rods produced locally for the private projects and they fully satisfied.
Our major financial partners are various Nigeria banks and Development Financial Institutions (DFI) such as FMO, Finfund, EAIF, etc who have placed specific emphasis on implementation of IFC and World-bank guidelines for our Integrated Management system. Under this system, training and skill enhancement is mandatory. Therefore, at AFL training is done as part of standard guidelines of its management system. It is for the same reason AFL is the only steel plant in Nigeria that is ISO 9001, ISO 14001 and OHSAS18001 complied. At African industries we believe in self-reliance and therefore we practices a policy of training operators/employees right from the project stage. Each of our employees get trained and mentored whenever new facilities are added. The Proportion of local skill has gradually been growing over the years. More and more emphasis is placed on training and hands on skill enhancement. Maintenance is the key for such operations and people through on job training are being prepared for maintenance related challenges.
