Nigeria’s steel companies have extended footprints outside the country’s market, driven by a need to earn foreign exchange.
African Industries Limited started export of finished steel products to Morocco, Ghana and other parts of Africa last year in a move that buoyed the sector and consolidated local investments.
Alok Gupta, group managing director, African Industries Group, said the quality of steel products exported by the company was at par with steel from Ukraine, if not better, adding that the company had become internationally competitive in exporting products from Nigeria.
African Industries Limited has 12 subsidiaries, with six steel plants, which all together produce one million metric tonnes of steel. The group also produces iron rods, angles, channels, pipes, and wire related products.
It likewise produces 50 percent of iron rods consumed in the country, having so far invested $1.1 billion in the Nigerian economy already.
“We are saving the nation over $650 million yearly through our export,” Uche Iwuamadi, executive director of the group, said.
Similarly, Aarti Steel Nigeria Limited is already exporting steel to West African countries such as Togo and Mali, expanding to Central Africa, Ivory Coast, Benin and other parts of the continent in order to earn more foreign exchange.
The firm completed a cold-rolled mill in Ota, Ogun State, in 2017. The mill has a capacity to produce 120,000 tonnes of products per annum.
The steel maker spent $20 million to $30 million on the mill, which is expected to serve the downstream players in Nigeria using cold-rolled steel to produce home appliances, roofing sheets, metal furniture and filling cabinets, tables and chairs, among others.
“The mill just started in March (2017) and it is now fully stabilised. It is producing already. It is a big investment and it will also be good for the Nigerian economy,” Aniket Singal, Aarti’s vice chairman, told BusinessDay in Lagos.
More so, Western Metal Products Company Limited (Wempco Group) produces steel products such as nails and exports to West Africa.
Official data show that the country imports steel valued at $3.3 billion every year. An average of steel products such as standard plates, hot-rolled coil, cold-rolled coil and rebar is estimated at $464.7 using Chinese prices, which means that Nigeria imports roughly 7.1 million metric tonnes of steel annually.
Eighteen of the 30 functional steel firms in Nigeria produce about 2.2 million tonnes a year with scraps and billets imported mainly from China.
The steel sector is driven by the private sector, which is filling the gap left by Ajaokuta Steel Complex, a behemoth expected to have added at least 1 million tonnes to the national production.
With the demand for infrastructure such as railways, power, bridges and roads rising in Africa’s most populous country, steel firms are expanding capacity and investments to tap growing opportunity.
“We believe that 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,” said Raj Gupta, chairman of African Industries Limited, said.
