Nigeria’s near-moribund steel sector may soon bounce back. The Standards Organisation of Nigeria (SON), in partnership with steel manufacturers, is set to boost local production and standardise the product. Is this goodbye to imported iron and steel? Assistant Editor Chikodi Okereocha writes.
The Minister of Industry, Trade and Investment, Dr. Olusegun Aganga, rekindled hopes of a possible turnaround in the fortunes of the steel sector.
At an interactive session with leaders of the Organised Private Sector (OPS), he said the government was considering a new paradigm that would boost the industry’s development.
He said the government would implement a backward integration policy that will enable the country explore its abundant iron ore deposits to support industrial growth.
Aganga said: “There is no country that has been industrialised without growing its iron and steel industry. In Nigeria, we import raw materials for the steel industry yet we have a lot. As part of our industrial revolution, we need to embark on big strategies, working with the Ministry of Solid Minerals and Steel Development, to process the raw materials used in the steel industry. This means that we need to look at the overall structure, including the current pricing, availability and affordability, in addition to developing an export strategy for the sector.”
The strategy is in tandem with President Goodluck Jonathan’s administration’s desire to re-position the industry for sustainable growth.
The president in 2011 noted that the Ministry of Industry, in conjunction with other ministries, departments and agencies (MDAs,) developed an Industrial Revolution Plan, which identified the iron and steel industry as a focal sector. The plan, he said, aims to develop the complete ecosystem of the sub-sector.
The President said: “I would like to assure existing and prospective investors of the government’s support as we collectively strive for self-sufficiency in local steel production. I strongly believe that self-sufficiency will open major downstream sector activities with the attendant massive job opportunities and economic empowerment for our engineers, technicians, artisans, and fabricators alike.”
To realise the President’s dream for the sector, the Standards Organisation of Nigeria (SON) is to regulate the activities of the sector to encourage local companies. Specifically, SON,in partnership with manufacturers, hopes to boost local production of steel. The ultimate objective of the partnership is to stop importation of steel products and drive the nation’s industrialisation.
During a tour of some steel factories, SON Director-General Dr. Joseph Odumodu praised the local steel companies for consistently meeting the specifications of the Nigerian Industrial Standards (NIS). He said locally produced steel was becoming the first choice for foreign and indigenous construction companies. He said despite the challenges faced by steel operators, some have been able to do things the right way.
“My visit is a way to express my profound appreciation and share the successes of companies that have done well in the steel sector,” he said.
Odumodu said the yearly requirement for reinforcement bars in Nigeria was about 1.8 million metric tonnes, and the industry’s installed capacity can meet the demand.
“The operators are saying they have a challenge of using only 75 per cent of this number. As a result of this, we have an opportunity to import some of these products; but what we are saying is that the locally produced ones have a set of criteria like the identification marks. But some of the products imported do not have identification marks, making traceability difficult,” he said.
He said in 2010, a directive was given that there should be a code on every reinforcement bar in the country and that the agency even gave enough extension to manufacturers.
“What we are saying now is that there is no room for further extension; every reinforcement bar, irrespective of where it comes from, must have identification marks acceptable to SON,” he said, adding that it would help trace the products to the manufacturers at any point in time whether in a failed building or market.
He expressed optimism that the new industrial policy of the government would give steel operators a comparative advantage in the global market. He said the government was interested in backward integration and providing incentives for steel operators to thrive.
“Our mandate is to ensure that locally manufactured goods in Nigeria give the required satisfaction to consumers through compliance with government policies on standardisation and conformity assessment. We also make sure that goods imported into Nigeria meet the minimum requirements of the NIS or any other international standards,” he said.
According to SON and the steel manufacturers, there is no need to import iron and steel materials anymore, as local manufacture of the product has improved with capacity to meet annual demand. They also noted that a vibrant steel industry is the driver of a nation’s industrial and technological advancement. Countries that have attained industrial growth or are seeking to do so strive to become self-sufficient in steel production, which experts say has a ripple effect on the economy.
The Managing Director of Real Infrastructure Nigeria Limited, Mr. Subhash Gupta, said steel and cement are the basic raw materials for infrastructural development of a nation. Noting that the future of Nigeria’s steel industry is bright because of constructions going on. He said his company makes international quality reinforcement bars to meet the consumers’ need.
Gupta said SON’s regulatory and supervisory role has created a positive impact on steel production, making manufacturers to adhere to international standards.This, he stressed, led to expansion in terms of output. “Three years ago, we were very small but presently, we have grown about four times bigger than before,” he said, adding that one of the major challenges facing the industry is power. He said the required amount of electricity needed to boost local operations is still low.
The Managing Director, Monarch Steel Limited, Mr. Gupta Prakash, also noted that, despite the potential of the sector, electricity remained a major setback and must be addressed urgently.
According to him, the huge production cost of local operators because of unreliable power supply created unhealthy competition between the local industry and its foreign counterparts.
