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Nigeria’s steel makers extend footprints to African market

by ODINAKA ANUDU

October 19, 2017 | 1:30 am
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Even though Nigeria’s steel sector is riddled with challenges, some players are beginning to expand investments and export simple products to the African market.

African Industries, the country’s biggest steel maker, now exports iron rods to Morocco, Egypt, and Ghana and is currently looking beyond the continent.

African Industries has 12 subsidiaries, including six big steel plants, such as African Steel Mills, Ikorodu Steel Mills, African Foundries, and Abuja Steel Mills.

“We already produce one million tonnes of steel per year and our target is to export between 200,000MT and 400,000 MT by next year. You can see we are earning foreign exchange when others are demanding it from the government,” Uche Iwuamadi, group executive director, African Industries, told BusinessDay.

In a recent interview, Raj Gupta, chairman of African Industries Limited, said: “We have invested $500 million in Nigeria. We believe that the steel sector is the backbone of any major economy in the world. Without steel, there cannot be any other industry in the real sector of any economy.”

Aarti Steel Nigeria Limited, which recently completed a 120,000- tonnes capacity cold-rolled mill in Ota, Ogun State, is already exporting steel to West African countries such as Togo and Mali, and is expanding to Central Africa, Ivory Coast and Benin, to boost capacity, earn more foreign exchange and tap the growth potential in the continent’s market.

Aniket Singal, Aarti’s vice chairman, told BusinessDay that the company is looking at expanding its export footprints, but stated that infrastructural challenges presently at the Apapa and Tin Can Island Ports, remain a big threat, as several cargoes of imported raw materials lie at the port.

“One key thing, that is important is a policy that will keep substandard roofing sheets at bay,” Sighal said.

Sun Metal Industries Limited has a combined installed capacity of over 350,000 metric tonnes per annum.

The steel maker currently exports to Africa and has its products registered with the London Metal Stock Exchange (LMSE). It likewise operates two subsidiaries which are major suppliers of export products to some of the major auto manufacturers in Asia and South America.

It manufactures ferrous and non-ferrous ingots made from aluminium, copper, stainless and lead, utilising secondary sources as raw materials.

The new steel maker, HongXing Steel Company Limited, which is pumping $100 million into scrap and billet manufacturing plants in Aba, Abia State, has registered at the Manufacturers Association of Nigeria, as an exporter and is planning to be dominate the ECOWAS market.

Standard Metallurgical Company Limited (SMC) is set to launch a billet mill to produce standard wire rods in Nigeria for the local and ECOWAS market.

“Currently, we are producing 300,000 tonnes of wire rods per year. With phase two, we would produce 260,000 tons of billets in Nigeria. Nigeria today, is a big market and we are committed to meeting local demand and the surplus can go to the ECOWAS market,” Mohammed Saade, managing director, SMC, told BusinessDay.

Nigeria, Africa’s biggest economy, spends about $3.3 billion on steel imports every year. Eighteen of the 30 steel manufacturers in Nigeria produce about 2.2 million tons a year with scraps and billets imported mainly from China.

An average of steel products such as standard plates, hot-rolled coil, cold-rolled coil and rebar is $464.7 using Chinese prices, which means Nigeria imports about 7.1 million metric tonnes of steel annually.

The publicly-owned Ajaokuta Steel Complex is in disrepair, after government put in over $5 billion into the plant. The government has been slow to hand it over to a private investor, despite interests from foreigners.

 

ODINAKA ANUDU

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by ODINAKA ANUDU

October 19, 2017 | 1:30 am
  |     |     |   Start Conversation

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