Nigeria’s Steel Plants Producing Less Than 200,000 Tonnes Annually

The Basic Metal, Iron and Steel and Fabricated Metal Products Sectoral Group of the Manufacturers Association of Nigeria (MAN), has raised an alarm over possible massive retrenchment of the workers in the steel sector, as non-patronage of local steel products spells doom for the industry.

With only about 35 or less of the steel plants still active, operations in the firms have been at below capacity with utilisation less than 20 per cent and production less than 200,000 tonnes yearly.

The immediate past Chairman of the Group, Chief Oluyinka Kufile, at its yearly general meeting, said construction activities in Nigeria in the last two years lacked local content input in terms of steel and aluminium products, as bulk of such items were being imported into the country.

He alleged that contractors involved in many of the infrastructural projects refused to engage some of its members, which prevented local producers from deriving proportionate benefits from governments and private expenditures, thus resulting in poor capacity utilisation as well as low demand for steel and aluminium products.

He said as manufacturers and investors in the industry, the sector may have no choice if the situation persists, but to consider the option of closure to save their investments from further losses.

Such decisions, he said, have consequences for the retrenchment of workers.“We are hoping that government will quickly address these issues, otherwise, unemployment along with poverty will worsen as the level of hunger, social and economic deprivation and insecurity could be the order of the day,” he said.

Meanwhile, a Director, Federal Ministry of Mines and Steel, Ime Ekrikpo, said plans are underway by the present administration to take up the per capita consumption of steel products from below 10kg to about a 100kg by 2020.

“We know 2020 is in less than six months from now, but we are hoping that the federal government could still meet the target with Ajaokuta and Delta steel plants,” he said. Kufile said: “We are therefore of the opinion that the manner and persistence of the current challenges of non-patronage and importation of all manners of steel and aluminium products for infrastructure projects and upgrade across the country, could consistently spell doom for the industry.”

Going forward, he recommended the implementation of the executive order 003 and 005 to be strictly monitored by the government, to ensure that both public and private companies in the construction industry effectively comply with local patronage and local content in all their projects where such products and contents are locally available.

He said the way forward for the industry is the will and commitment of the government and the industry players to make the sector a viable one, saying that a bill has been sent to the National Assembly where all stakeholders were enjoined to participate in the process.

The new Chairman of the group, who also doubles as the Group Managing Director, KAM Group, Dr. Kamorudeen Yusuf, said he will continue to engage the federal government to formulate favourable policies to revitalise the steel industry.He said most of the steel companies closing down were due to unfavourable policies, noting that government is yet to protect local manufacturers from unfair competition to inferior steel products.

“Local manufacturers import their raw materials into the country at 15 per cent duty rate, but the smugglers bring in their products at zero or five per cent duty. This is killing the local manufacturers. The government must block all the loopholes in the Customs that allow the smuggled goods to enter the Nigerian market,” he added.