Nigerian steel manufacturer saves economy N236bn

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Manufacturing
Thursday, October 26,2017
African Industries Group, Nigeria’s major private sector steel manufacturer, yesterday, said that it saves the country $650 million (about N236 billion) through import-substitution, by exporting finished steel from its plants to other African countries.
The group also lamented the high cost of sea freight of steel products to other countries within the continent, calling on the port authorities and other relevant agencies to ease the bottleneck associated with exporting cargoes through the ports and reduce the various charges to acceptable level to make Nigerian goods competitive in the global market.

Group Managing Director, African Industries Group, Alok Gupta, revealed this in a presentation on ´Taking Nigerian Steel to the Global Map´ to government officials, banks, among other stakeholders in Lagos. He said his company has invested more than $1.1 billion in Nigeria with plans to invest more in upcoming projects. He said: “All these efforts have resulted in huge saving of $650 million in foreign exchange to the country. We have been exporting between 150,000 – 200,000 metric tons of steel on annual basis to Ghana, Ivory Coast, Egypt and Morocco. However, our steel products had to compete with big producers from Ukraine, Russia, China and other developed countries.

“Our export of steel during the first nine months of this year has increased over three fold by weight and value compared to the whole of 2016. To put numbers on it – in 2017 for the first three quarters, our steel exports are almost $13.5 million compared to $4.1 million in 2016 and we are expecting an additional $12 million of steel exports in the final quarter of the year. Overall, we expect over $25 million in the current year 2017. We are proud to achieve this milestone due to combined effort of our team and enabling environment created by domestic industrial policies.” On export challenges, Gupta stated: “There are many challenges both on logistics and fiscal policy issues. Sea freight between Lagos and other West African countries is almost double of what it costs to bring the steel product from Ukraine or China. For example, sea freight from Ukraine to Ghana is $35-40 per metric tons while from Lagos to Ghana costs $65 per metric tons which is almost 50 percent more.

“We appeal to shipping companies operating in Nigeria to remove this abnormality and make a level playing field for us, if we really want Nigeria to emerge as global player in steel sector. We need our colleague, partner and workforce among port authorities and customs to ease the bottleneck associated with smooth flow of export cargoes through port, reduce the various charges to acceptable level so as to make Nigerian goods compatible in global market.” Minister of Mines and Steel Development, Mr. Kayode Fayemi, lauded the company’s stride, saying that the federal government’s policy on privatization of the steel sector is working.

Fayemi who was represented by Mr. Ime Ekrikpo, Director, Steel and Non- Ferrous Metals, assured operators in the sector of right policy support and incentives aimed at taking the industry higher. “Our key target in the mining industry is the steel and we will give them all the necessary support to begin to produce from iron ore,” he said. Also Speaking, President, Manufacturers Association of Nigeria, Mr. Frank Jacob, applauded the company’s export feat. “In spite of harsh operating environment, they are able to produce, export and earn foreign exchange for the country,” he said.

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