The Nation Newspaper

Category: Industry

  • WEMPCO’s debut ignites hope for Nigeria’s steel industry

    The coming on stream of Western Metal Products Company Limited (WEMPCO) has provided the vista of hope required to ignite the comatose state of the steel sector, SIMEON EBULU, Deputy Business Editor, reports

    The steel sector so widely recognized as essential for industrialization, but largely neglected, is gradually receiving attention. Steel, in all its ramification, is regarded as the pivot around which economic activities and development revolve worldwide. Its relevance has universal appeal, but for some inexplicable reasons, Nigeria, despite of its gifting in this resource, has not lapped on its advantage. But all that is changing now, perhaps.

    The successful execution and commissioning of the Western Metal Products Company Limited (WEMPCO)s, a private sector initiative by President Goodluck Jonathan last month, may well be the elixir needed to ignite both government and private sector interest required to harness and unbundle the untapped resources in the sector. WEMPCO is evidently a privately owned entity, but its bold initiative in the steel sector is “a clear evidence of commitment to the industrialization, job and wealth creation for the nation,” said the Group Managing Director, Mr. Lewis S. N. Tung, stressing that “steel is very crucial and fundamental to any industrial development in any country.”

    Mr. Tung underlined the WEMPCO’s commitment to making a success of the venture, just as it has done with its other 12 subsidiaries, saying that the firm sources almost 90-95 per cent of its raw materials locally, and has gone ahead to obtain two licenses towards actualizing the first backward integration agenda in steel making.

    Jonathan could agree less, While inaugurating the plant, he said: I strongly believe that self-sufficiency in steel production will open major downstream sector activities with the attendant massive job opportunities and economic empowerment for our engineers, artisans, fabricators,” and all those that have to do with the steel sector.

    He assured existing and prospective investors of government’s support to collectively strive for self-sufficiency in local steel production, but enjoined WEMPCO to continue to strive to expand its current production capacity, which presently stands at 700,000Metric Tonnes, “to gradually meet the nation’s demand of flat sheet steel,” estimated at three million Metric Tonnes by the end of 2013, and 12million Metric Tonnes by the year, 2020, and fast-track its backward integration drive in the steel sector, saying that with such a move, the problems of Ajaokuta will be addressed.

    The President’s avowed commitment to promote the steel sector and WEMPCO’s leap in actualizing the dream, mark a turning point in the nation’s quest to be counted among steel producers, a journey that started over 50 years ago.

    The starting point was the search for appropriate local inputs, the characteristics of which determined the particular technologies that would be used. To this end, Iron ore was located at Agbaja, Itakpe and Udi; suitable Limestone at Jakura, Mfamosin and other parts of the country. Coal deposits were always there at Enugu, while potential coke-able coal was struck at Lafia.

    Between 1961 and 1965, many firms from the industrialized nations of the West submitted proposals for the construction of an integrated Steel Plant in Nigeria. In 1967, a UNIDO survey identified Nigeria as a potential steel Market. This led to the signing of a bilateral agreement between the defunct Soviet Union and Nigeria, leading to the arrival of Soviet steel experts to Nigeria to conduct a feasibility study.

    The overriding objectives of the steel industry is to be able to meet the demands for cast iron, rods and bars, wires, structural steels, flat sheet steels, and also the entire spectrum classified as flats, stainless and other special alloy steels, rails and pipes, as well as  Plates in its various sizes in width and thickness.

    Former President of the Manufacturers Association of Nigeria and technocrat of many years in the Federal Civil Service, Alhaji Basir Borodo, gives insight into the steel sector unfolding development. “I think this thing started right from our independence. I recall when we were in the universities in the ‘60’s, we were among the students who were saying that Nigeria should start steel production. So the idea was there. During the time of Yakubu Gowon, we also thought about it. It was a very important thing in his agenda. The thing started in the ‘80’s when we had some rolling mills that were working – the one in Katsina, Jos and in Delta – were all doing well. We were all waiting for Ajaokuta to be completed and the thinking was that we were going to get the materials from either Guinea or some other place.”

    Borodo explained that the drive to develop the steel sector was well on stream, until the advent of military coups that led to the incessant change of governments altered the equation.

    “Everything was on course until we had a change of government. This has been our major problem, lack of consistency. If we had been consistent about all these things (six steel production mills), we wouldn’t have been in this mess,” he said, adding that the main challenge was that every Minister, or person that came introduced their different views. “So the key thing really is that things went wrong in the steel industry because we are not consistent,” he stressed. He however expressed satisfaction that the private sector has taken up the gauntlet. It is very encouraging that people in the private sector are going into the steel industry on their own, and are moving ahead, he said.

    Borodo agreed with Mr. Tung that Nigeria is well positioned to be a giant in steel making because she is endowed with oil and gas which are essential raw materials, iron ore, coal, human resources, as well as a huge internal market, adding that the only thing lacking is the machinery and the technology, which Tung said can be sourced from countries like China, Japan, Germany and the United States of America. “ If it is steel, oil or gas, God has given us all that, it’s only a matter of we actualising the potentials,” Borodo said.

    He said the WEMPCO venture is a clear demonstration of implicit confidence of the management to the nation, as well as the industry.

    He said: “It’s a matter of state and commitment. I’ll go further to say that they have been in this country for over 60 years. They started from a humble beginning. Some of the people in the management did their secondary schooling here, in Abeokuta. You can say they’re foreigners, but in terms of what they have done and what they are doing, they are Nigerians and that is the key. Sometimes, it takes somebody who is from a place and who has the love for a place to take this big investment risk. We have seen some foreigners who when they have made their money and when there is no adequate infrastructure, they just pack to more favourable economies, or just go home. The question about why they took this huge risk is because in their heart, they are Nigerians and they have the interest of Nigeria in mind. There are some other foreigners who have also demonstrated this.”

    The former MAN helmsman, said there were obstacles, but that government remained consistent and lent the required support. He was pleased WEMPCO did not disappoint anybody that had faith in them. “It is a very positive development and I hope others will follow. In this country, without adequate government support, hardly will there be any meaningful industrial development. This applies to whether it’s a new investor, a foreign investor or a Nigerian investor, but what we need are people that will deliver and transform this country,” he stated.

    Borodo assured WEMPCO that MAN will take care of its own stakeholders no matter what, saying that government should take steps to ensure adequate protection for manufacturers, no matter the sector. “I remember we had this issue on cement some years back when government allowed people to import cement into this country. I said then that, look, you can’t do this, if you do this you are going to burn those who have invested in cement and nobody will come and invest. Government should continue to support them, whether they are in steel or cement. If you look at the history of this country, most of the industries that were supported or protected have survived. Any industry that is 50-60 years old- the breweries, the flour millers, they are still around and they are growing. If you remember, we had only one company that was milling all the flour, but today, they’re probably ten or more and its better for Nigeria,” he argued.

    “I think the issue now has to do with the government. Our government has to be very clear that if it is steel, we want at least 60-70 per cent of it with Nigerian materials, otherwise, the danger is that subsidised steel could come in. Even though WEMPCO for example, has done a lot of local value addition, with several people working there, a subsidised product could come in and they may not be able to compete over price. This is something, one has to look at carefully and protect the local manufacturers. In doing so, it is not only protecting WEMPCO, but also others who are producing steel in different ways. That is the important part, but we have to appreciate the fact that the critical thing about steel is that if you want to industrialise, you must be able to produce steel, otherwise, you are almost wasting your time, Borodo, cautioned.

    Cognitive support for the sector was also echoed by the Minister of Steel Development, Musa Sada, and his Trade and Investment counterpart, Dr. Olusegun Aganga, who stressed collaboration between the Federal Government and the private investor in moving the steel industry in the country forward. The said government has provided an enabling environment suitable for private investors to enable them participate in the production of steel and its bye products.

    Sada, underscored government’s resolve to develop the steel segment, including mining, saying they provide huge employment opportunities. He said government will only regulate the activities of the sector, and give support to companies when necessary. “To the best of our understanding, the Federal Government has taken the right position. No country in Africa has the highest steel manufacturing companies than Nigeria. The steel industry is the backbone of industrialisation in any country, and Nigeria is not an exception. The steel industry also has the highest employment in countries of the world and Nigeria is ready to develop its steel industry to boost the economy,” he added.

  • SMEDAN, Bayelsa partner on MAME

    The Acting Director General, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Mr Wale Fasanya has said the agency is Committed to sustain its partnership with the Bayelsa State government so as to boost the MSME sector in the state.

    Fasanya made this remark during a courtesy visit to the Bayelsa State Governor, Henry Dickson at the Government House in Yenagoa.

    He said the recent survey that was conducted by the National Bureau of Statistics (NBS) revealed that the state has over 400 Small and Medium Enterprises

    (SMEs), but 99 percentage of this groups falls within the micro and informal sector.

    He said that SMEDAN will ensured that most of the small businesses expand.

    “We actually have a mandate to work with this state to see how we can develop this critical sector of the economy,” he said.

    He said one of the agency’s flagship programme was the recently introduced National Enterprise Development Programme (NEDEP)which Mr. President would soon launch, adding that Bayelsa is one of the states that the programme will start from.

    He said the NEDEP programme involved getting the state to nominate business development service volunteers who would be working with SMEDAN .

    “We will train them and use them on the field to mentor the SMEs that we have already identified,” Fasanya said.

    Governor Dickson said SMEs was the right way to go particularly for an economy that is over dependant on products and good that comes from outside its shores. He said his government was passionate about the growth of MSMEs.

    “I want this sector to blossom in Bayelsa because that is the fastest way that we can create wealth, create employment, enable people to employ themselves and perhaps employ others and then generates skills that our economy really deserves,” he said.

     

  • Manufacturers seek review of CBN’s monetary policy

    The Manufacturers Association of Nigeria (MAN) has urged the government to review fiscal policies to revive moribund industries and stimulate real sector growth.

    Speaking with The Nation, Chairman, Apapa branch of MAN, Mr John Aluya, blamed the slow growth of the real sector on the failure of the monetary policy framework to address realities in the sector.

    He raised concerns about the continued retention of the tight Monetary Policy by the Central Bank of Nigeria (CBN) and the high interest rates, describing them as burdensome and making the nation’s products lack competitive advantage.

    According to him, the real sector, which drives the economy, has become handicapped due to unfriendly monetary policies of the government.

    He said: “The truth remains that no country in the world has ever developed with an interest rate as high as 25 per cent as this has made it almost impossible for investors to access the funds needed for investments. The insecurity in the country, especially in the northern states has led to a high inventory of unsold goods and massive loss of jobs.

    “Inconsistent government policies, dearth of basic infrastructure, multiple visitation by regulatory agencies cum multiple taxation from Ministries, Departments and Agencies (MDAs), high lending rate of double digit, and unfavourable monetary policies have made cost of doing business in Nigeria as one of the highest in the world. The need to salvage our economy is now even more resounding than ever more.”

    The Chairman of MAN, Ikeja branch, Isaac Agoye, during its consultative forum in Lagos, said surplus cash in the system is responsible for CBN’s Monetary Policy Rate (MPR ) of 12 per cent and the prevailing high and burdensome anti-industry interest rate regime that makes Nigerian products uncompetitive.

    It has also led to the closure of several factories and contributed to the high level of unemployment in Nigeria.

    He said: “We recognise the dastardly blows dealt to the survival of manufacturers by smugglers. However, we note with concern that the band of smugglers, looters of the treasury and other commercial speculators fund their dollar requirement from the $2 billion or more CBN dollar allocations to Bureau De Changes every month.”

  • Govt to hire weights and measures inspectors

    The Federal Government is to hire more than 2,000 inspectors for the implementation of accurate weights and measures in transactions.

    Consultant to the Weights and Measures Department of the Ministry of Industry, Trade and Investment, Mr. Yagbagi Sani, said in Abuja that the inspectors would implement the government’s agenda in ensuring that appropriate measures were implemented in all transactions cutting across different sectors, including telecommunications, oil and gas, trade and agriculture.

    He said: “Over 2,000 young inspectors are in the process of being employed by the government, and the first batch of private companies will work for the Department of Weights and Measures as independent service providers – providing calibration, testing and verification services to cover millions of weighing and measuring devices.

    “Trade transactions have measurement inaccuracies, which can vary from less than one per cent to 20 per cent where there is an inadequate metrology system. In a developing economy like Nigeria, the loss to both the government and the public due to measurement transaction inaccuracies is about 15 per cent of the GDP or N2.83 trillion per annum.”

  • Firm launches product

    Abblat Company Nigeria Limited, makers of popular Yoyo Bitters, has launched Yoyo Sappiro Lemon Ginseng liquor.

    Speaking at the launch Managing Director, Dr Abiola Oluwatobi, said the premium herbal blend, beyond being an aphrodisiac, is an alcoholic beverage that is fortified with herbs that boost the immune system and beneficial to both male and female.

    Yoyo Sappiro, which contains 42 per cent alcohol, among other ingredients, according to him, was a product of painstaking research, which spanned five years.

    “It is a dream come true. Good product requires good plan. Our research and Development Unit has been on it for almost five years and today, we are proud to say that we have a product we are all proud of,” he said.

    Marketing Manager, Dr Yemi Gbemibade, noted that the product, which targets mass populace, is pocket friendly.

    “We have produced it in such a way that it can be easily affordable by the people,” he said. Besides, he said the product has been designed in such a way that it would be difficult to be counterfeited.

     

     

  • SMEDAN: multiple taxes can kill small businesses

    THE Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has warned that many small and medium scale enterprises (SMEs) may die.

    Its Director-General, Mr Muhammad Umar, said at the launch of the Nigerian Stock Exchange Alternative Securities Market (ASeM) in Lagos that lack of rural infrastructure, poor access to business information and low synergy among the three tiers of government had also not helped the SMEs.

    Umar, represented by SMEDAN’s Director of Planning, Mr Wale Fashe, called for improved infrastructure and access to long-term finance to strengthen the growth of indigenous companies.

    He advocated the collaboration among SMEDAN, the capital market and the money market for the creation of viable ASeM.

    According to him, the NSE should make the listing conditions for ASeM to be less stringent to lure new SMEs into the nation’s bourse.

    In a related event, SMEDAN in collaboration with the National Productivity Centre (NPC) is set to enhance productivity and competitiveness of SMEs in Nigeria.

    Key players in SMEs’ sectors of the Nigerian and British economies have initiated a new bilateral trade-promoting platform to benefit entrepreneurs in the two countries.

    A statement by the Institute of Credit Administration said the objectives of the forum would involve promoting, supporting or opposing legislation/ policies and measures capable of affecting trade, investment and business between Nigeria and London.

    The conception and eventual incorporation of forum, according to the statement, is based on the need for the business community to join the league of credible elite advocacy and lobbyist-organisations, whose mode of operation is fashioned, structured and managed in the manner consistent with best practices.

    It stated that the group’s quarterly, half-yearly and yearly programmes such as business networking luncheon, trade and investment conference and bilateral review roundtable were held in London and Nigeria.

  • Govt urged to check imported e-waste

    The Federal Government has been urged to check the influx of imported electronic waste into the country.

    Speaking with reporters in Lagos, during a Mandatory Training Workshop of the Institute of Public Analysts of Nigeria (IPAN), a former Registrar, of the body, Mr Bola Haruna, said electronic waste dumping had become a cause for concern because such waste contain carcinogenic radioactive materials that are hazardous to health.

    He said a carcinogen is any substance that is an agent directly involved in causing cancer, adding that several radioactive substances are considered carcinogens, but their carcinogenic activity is attributed to the radiation, which they emit.

    Haruna said: “These things are very dangerous especially if they are scattered all over the place because they contain radioactive materials, which are carcinogenic.

    “We see a lot of people die of cancer these days and we do not seem to know or ask ourselves what are the causes.

    “For instance, almost every house or every room has a generator that sprays fumes all over the place. All these things go into the atmosphere. And they are not just there without causing havoc because they are not supposed to be there in the first instance.”

    He called for a regulation to check the importation of electronic waste to the country.

    “There is a regulation and if this is followed, there will be no problem,” he said.

  • Smugglers plan to flood Nigeria with rice, group alleges

    The Federal Government has been urged to tackle rice smuggling.

    In a statement in Abuja, the Patriotic Rice Association of Nigeria (PRAN), through its Chairman,Habibu Maishinkafa and Secretary, Martins Okereke, said the level of rice smuggling seems about 40,000 metric tonnes of rice find their way into Nigeria illegally, jeopardising the businesses.

    It said vessels with cargoes of more than 220,000 metric tonnes of rice from India and Thailand have flooded the ports of Benin and Cameroun en route Nigeria.

    “Container loads totalling over 150,000 tonnes since the start of 2013 have also started penetrating through the borders through Benin, Niger Republic, borders with Northern Nigeria .

    “More than eight million bags of rice have flooded all markets including Alaba, Daleko, Ideo, and other prominent markets in the country,” it said.

    The association estimated that about N27 billion that would have accrued to the government from duties through legitimate rice importation has been lost, and that a bleak future lies ahead of local rice growers and traders legitimately involved in rice trade. They said this will happen unless smuggling is tackled.

    “The Nigerian rice consumers are in the process short changed with inferior brands being smuggled and then re-bagged into quality brands and sold at higher prices,” it added.

    PRAN said the main cause of the high smuggling levels was the exponential increase in import tariffs since January, as this made it more attractive for smugglers to ferry in large quantities of rice without paying any duty. It added that the tendency has constituted a big threat to the Federal Government’s plan for rice self-sufficiency by 2015.

    It was reported last month that no fewer than 8,000 bags of rice worth over N56 million were smuggled into the country daily.

     

  • N2,319tr imports are from Asia, says report

    Goods worth N2,319.9 trillion were imported from Asia last year, the National Bureau of Statistics (NBS), has said.

    According to NBS report, the imports represent 41.2 per cent of total imports for last year put at N5,624.9 trillion. The records show that the country’s major imports came from Asia.

    Other major imports, according to the report, came from Europe and America, which accounted for N1,490.4 trillion, representing 26.5 per cent and N1,421.9 trillion or 25.3 per cent.

    The import trade is still dominated by the imports of machinery and transport equipment, manufactured goods and commodities.

    NBS had in March said Nigeria’s import trade value dropped significantly last year to a cumulative value of N5.62 trillion, as against the N9.89 trillion value of imported goods into the economy in 2011.This represented 43.1 per cent decline.

    The report noted that the import bill were equivalent to 13 per cent of the Gross Domestic Product (GDP) for last year.

    The trend, according to NBS, indicates that the efforts by the Federal Government to grow the economy by improving local capacity in the agricultural, manufacturing and other key sectors of the economy are yielding to desired results.

    The report released in March, listed beverages and tobacco, crude inedible materials, mineral fuel and oils, fats and waxes as contributing to the significant drop in the value of yearly imports

    However, the decrease in imports was across all categories, as machinery and transport equipment, Nigeria’s biggest import segment, declined by 63 per cent, following modest growth of two per cent in 2011.

     

  • LCCI, NSE meet today

    The Financial Services Group of the Lagos Chamber of Commerce and Industry, LCCI and stakeholders in the Nigerian Stock Exchange (NSE) will today deliberate on how to ensure growth in the capital market.

    Chairperson of the Financial Services Group and Managing Director of Resort Development Limited, (a subsidiary of Resort Savings and Loans), Mrs. Olajumoke Fashanu said the time had come for Nigerians to be made fully aware of the state of recovery of the capital market.

    “Investors and other players in our capital market need to have their confidence restored in its profitability, with proof of the market’s excellent performance in recent times,” she stated.

    According to Mrs. Fashanu, stakeholders expected at the event include capital market operators, investors and other experts in the financial sector.

    The theme of the confab is ”The Nigerian Capital Market: The Outlook”.

    The Director-General, Nigerian Stock Exchange, Mr. Oscar Onyema, is the guest speaker .

    The exchange was affected some years back by the global financial crisis which made foreign investors to divest from the market, thereby leading to crash in prices and subsequent turmoil in the sector.