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Local firms want FG to ban steel profile importation

Local steel manufacturers have lamented the slow rate of growth in the sector and asked the Federal Government to discourage the importation of steel profiles, which they said could be produced locally.

Some of the manufacturers told our correspondent that an outright ban would enhance the performance of local companies and boost the contribution of the sector to the Gross Domestic Product of the country.

The Head, Interim Management, Delta Steel Company, Mr. Chilaka Uwakwe, in an interview with The PUNCH, said there was a need for the government to come to terms with the fact that steel was too strategic and capital intensive to be left solely in the hands of the private sector.

According to estimates by stakeholders in the sector, the country currently produces three million tonnes of steel and is expected to increase to 12 million tonnes by 2020.

Uwakwe, however, said that with the current situation in the industry, the 12 million tonnes projection might not be feasible.

He said the present consumption in the country was 10kg per capita for a population of 160 million people, which translates to 1.6 million tonnes per annum, a far cry from the average world standard of about 130kg per capita.

He added that the country could not be viewed as an industrialised nation as its steel production figure was still grossly inadequate to meet the nation’s demand, saying that a fair projection to start with would be about 50kg per capita.

He said, “Under the present scenario, the projection for a production of 12 million tonnes by 2020 is certainly not feasible. There is no magic that can be done about that, not when the key players as Delta Steel Company, Aladja, installed a capacity of one million tonnes expandable to 2.3 million tonnes per annum; Ajaokuta, 1.3 million expandable to 5.2 million tonnes per annum and the major sources of iron ore, such as the National Iron Ore Mining Company, are all in comatose.

“The projection could be possible if only there was a radical change in approach to steel production and manufacturing in Nigeria.”

He said currently, all the local manufacturers were producing less than 20 per cent of national demand.

Uwakwe said no nation could truly industrialise without steel and urged the Federal Government to take the necessary steps in fully reviving the sector.

He said, “The Federal Government now has ‘noble ideas,’ including youth empowerment, small scale industries promotion, expansion of transportation systems, railways, introduction of agriculture-based economy, to name but a few and now construction of a second Niger bridge among others and various projects at all levels.

“It should be noted that all the noble ideas are steel product based, the question is, what will be the local input to these projects when all the government-owned steel plants in the country and the sector in general are in comatose?”

A spokesperson for an indigenous steel company engaged in the production of telecom and electricity towers, but who preferred to speak on the condition of anonymity, said an environment conducive for business and government incentives could be the turning point for the sector.

According to him, the Federal Government is still involved in the importation of steel profiles from Sri Lanka, Indonesia, China and Turkey among others, while the sector currently boasts a few well equipped manufacturers within the private sector, with modern and computerised equipment to meet certain requirements.

He said, “It is curious that even foreign companies based in Nigeria, which are owned by Turkish, Chinese, Indians etc, do patronise these local manufacturers but the Federal Government prefers to seek the services of foreigners, who will go back to their country to get the materials duty-free while for the local manufacturers, raw materials import attracts between 20-25 per cent import duty, which is killing business and not encouraging local content.

“We are seeking government’s intervention and patronage because it (government) consumes much of the steel by reason of the rapid developmental processes in the country. The local manufacturers should also benefit from this huge demand which, on the average, is about 900,000 tonnes per annum.”

He said this would stimulate growth in the steel business and in the long run contribute to economic growth and development.

Babatunde Akinsola

Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

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