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Nigeria To Generate N236bn From Steel Export – AIG

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BY OLAJIDE FABAMISE, Lagos

Group Managing Director, African Industries Group (AIG), Alok Gupta, has disclosed that Nigeria’s major private sector steel manufacturer is to save the country $650 million (about N236 billion) through forex by exporting finished steel from its plants to other African countries.

He revealed this in Lagos during a presentation on ´Taking Nigerian Steel to the Global Map´ to government officials, banks, among other stakeholders.

He lamented the high cost of sea freight on 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.

Gupta said his company has invested more than $1.1 billion in Nigeria with plans to invest more in upcoming projects.

He noted: “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”.

Also speaking, the Group Executive Director, African Industries Group, Barr. Uche Iwuamadi said that there is no need of importing finished iron rods into the country.

On his part, Minister of Mines and Steel Development, Mr. Kayode Fayemi, who was represented by director, Steel and Non- Ferrous Metals in the ministry, Mr. Ime Ekrikpo, lauded the company’s stride, saying that the federal government’s policy on privatization of the steel sector is working.

He 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.

In a Good will messages, the 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.

Also, the Director General of Standards Organisation of Nigeria, Osita Aboloma, cautioned steel manufacturers against deviating from the approved standards for steel production in the country.

The DG warned that any steel manufacturer whose production falls short of the minimum requirement of the Nigerian Industrial Standard would be prosecuted and the factory shut down indefinitely.

Aboloma also disclosed that steps are underway to harmonise standard for steel production in West Africa, adding that the harmonization will avail steel manufacturers the required standard to produce and export to different countries in the sub region.

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