The Nation Newspaper

Tag: WEMPCO

  • No plans to exit Nigeria, says WEMPCO

    Western Metal Products Company (WEMPCO) has debunked claims that it is planning to end its business operations in the country.

    It said its proposed divestment in its Lagos Oriental Hotel was purely a business decision.

    WEMPCO noted that despite the challenging business environment, it was committed to and had “unshakable” faith in the resilience of the economy, like it has had for over 50 years.

    In a statement yesterday, the company said media reports to the contrary were rumours and false.

    It said WEMPCO Group of Companies was founded by businessman and entrepreneur Mr. K.F. Tung over 50 years ago.

    Tung, 97, passed away on March 27, 20l9 “surrounded by his family at the age of 97.”

    The company said: “While K.F.’s presence and guidance will be missed, both the Tung family and everyone at the WEMPCO Group of Companies remain fully committed to contributing to the ongoing growth and development of Nigeria

    “We must hereby categorically state that there has never been and there is no intention of the WEMPCO group to exit Nigeria as stated in the reports.”

    Addressing the Oriental Hotel controversy, it said:

    “The Lagos Oriental Hotel is a flagship in the Nigerian hospitality business but is not a flagship of the WEMPCO Group. It is an investment made by the Group in 2008, but not part of our core manufacturing business.

    “Although the recent spate of advertisement of the Hotel was not initiated or authorised by our Group, to divest in the asset would simply be a commercial decision based on the merits of a reasonable transaction.

    “Contrary to claims in the reports that the WEMPCO Group had relied on Federal Government waivers, the Group has never received special concessions outside of those extended to industries as a whole.”

     

  • WEMPCO chief roots for steel tariff hike

    Western Metal Products Company Limited (WEMPCO) Group Director, Mr. Robert Tung has asked for increased tariff on steel import and allied products to protect local producers.

    He lamented the high cost of production faced by indigenous manufacturers as a result of unfavourable business climate and massive importation of indigenous products, though they are of superior quality.

    Noting that the steel sector could sustain the local market, he urged the government to protect local industries.

    He spoke to The Nation in his office in Ogun State.

    The steel rolling mill, it was learnt, is worth $1.5billion and capable of producing 700,000 metric tons of steel yearly, which represents about 65 per cent of the 1.2 million of steel used in the country, which are mostly imported.

    To ensure adequate and uninterrupted power supply for the massive operations of the complex, he said about $250 million had been invested in building a 50 megawatt gas power.

    ‘’We realise that importing these products costs a lot of foreign exchange and we thought that since the raw materials are available locally, producing them locally will help conserve foreign exchange, he said. Also located at the steel complex are a ceramic tiles plant worth $500million and a nail production plant worth $200million,’’ Tung added.

    He praised the Bank of Industry (BoI) for its support for businesses in the country, which include small, medium and large scale industries.

    He said the huge investments in the complex is a demonstration of the confidence the firm has for the country.

    Tung further  said their ex factory  price is cheaper than the inferior imported substitute and wondered why Nigerians should be allowed to be ripped off my unscrupulous importers and business men who contribute nothing to the growth of the economy.

    He praised the new initiative on Industrial Policy, noting that if implemented, the  economy will be on the right path to recovery and growth.

    On the local content of their production processes, Tung said they have over 95 per cent local input.

    Noting that the country is one of the best places to run a business profitably, he said his company does not only have an effective management but also the continued patronage of local law materials.

    He, however, criticised  Nigerians’ penchant for imported goods, adding that even some of their customers insist that they put made- in-China logo on their finished products instead of that of made-in-Nigeria which will boost the image of the country abroad.

    He said: “The government should discourage the penchant for the citizens to prefer imported goods though of lower quality which is usually borne out of inferiority complex by the people. Due to the insistence of some of our customers we resorted to putting some Chinese inscription on our finished products though they are made locally. We are a large conglomerate with over 14,000 staff and we advise the government to carry advocacy on ‘’buy Nigeria’’, to encourage large industrial concerns like them.”

  • The silent industrial revolution

    The silent industrial revolution

    In an interview published in the August 30, 2014 edition of some national newspapers, Senator Ibikunle Amosun, Governor of Ogun State, spoke about the danger that the growing army of unemployed youths pose to the country. The Governor should know. While superintending over a state like Ogun with 22 public and private tertiary institutions, and many more still under construction, Senator Amosun estimated that there must be about half a million unemployed graduates presently living in the state.

    The natural follow-up question is what the Governor is doing in the area of job creation. While the Amosun administration has directly and indirectly created over 50,000 jobs through employment in the public service, helping small scale entrepreneurs with soft loans to develop, sponsoring skill acquisition programme for youths, empowering traders to gain access to cheap funds and creating opportunities in agriculture for young graduates, it has also pursued with vigour one of its five cardinal programmes, which is Increased Agricultural Production leading to Industrialisation.

    In achieving the objective behind the industrialization programme, the Amosun administration deliberately set out to profit from the state’s contiguity to Lagos, the commercial capital of the country and the border it shares with Republic of Benin, which by inference made it a gateway to the over 300 million-population in the West African sub-region. The strategy therefore is to attract multi-national industries, both those already existing in the country but have expansion plans and those that are just coming into the country afresh. The state has abundant land resources, 16,432 square kilometers, available for industrial, commercial, agricultural and property development. This is a key factor that an investor will actually consider in deciding on a location for his new industry. More than that, the state government has equally liberalized the process of acquiring land, particularly for industrial, commercial and agricultural purposes.

    Add this to the fact that though industries located in Ogun State have easy access to the air and sea ports in Lagos, the state also boasts of having 84 percent of the strategic Lagos-Ibadan Expressway which is a link between Lagos and the rest of Nigeria, located within its territory.

    The numerous tertiary institutions in the state also provide a ready pool of skilled workers to industrialists. All these advantages have been harnessed by the Amosun Administration to create a bi-annual Investors’ Forum through which it shifts the focus of investors from across the world to investment potentials in the state and the benefits the state government offer.

    In addition, the state government has invested heavily in upgrading the infrastructure in the state. The emerging road network in Ogun State is comparable to the ones in many developed countries. The security system is so good that it is reassuring that one’s investment is secured in this environment, despite the challenge that its multi-border nature ought to pose.

    The result is that in the last three years, the state has become the industrial hub of Nigeria. The popular question in the investment community about Nigeria now is not ‘who is in Ogun State’ but ‘who is not in Ogun State’. With 47 multi-national industries having opened shop in the state in the last three years, Ogun State is now the industrial capital of Nigeria. According to Otunba Abimbola Ashiru, who handles the Commerce and Industry portfolio in the state, the new industries have altogether invested in excess of $8 billion in the state.

    The new manufacturing plants that have commenced production in Ogun State belong to the biggest industrial concerns in the world. These include May & Baker, Lafarge Wapco, Nestle, Procter and Gamble, Dangote Cement, among others. In the next few weeks, ten new industries, including Olams and Apple & Pears, will also join the train, as they are set to commission their industries. In fact, in the last three years, President Goodluck Jonathan had visited Ogun State three times to commission big industries. Today, Ogun state is the cement capital of Africa. With an annual total of 13 million metric tons of cement produced by Lafarge Wapco and Dangote Cement from their plants located in the state, (same as the total national production figure for South Africa), the state can rightly claim that appellation.

    While commissioning the Procter & Gamble Industry in Agbara, the largest American investment in Nigeria outside the oil sector, President Jonathan declared Ogun State as the most industrialized state in the country. Also, while commissioning the WEMPCO Steel Company Limited in Ibafo, the President praised the Amosun administration for creating the enabling atmosphere for industries to be trooping into the state. He added that in the nearest future, there will not be a single person who is willing to work but cannot get a job in Ogun State.

    The President’s testimony brings us back to the plan of the Amosun administration to systematically tackle the problem of unemployment among the youths, thereby laying a solid foundation for the socio-economic development of the state.

    •Olaniyonu is Commissioner for Information and Strategy, Ogun State

  • 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.