Despite challenges in the local steel industry, African Industries has unveiled plans to export its steel and iron bars to neighbouring West African and North African countries in a bid to improve its foreign exchange earnings, promote import substitution and save the nation $650 million spent on importation.
Besides, to deepen local sourcing and investments in the steel sector, the Minister of Mines and Steel Development, Dr Kayode Fayemi has charged operators to invest in the sector’s upstream by mining rather than depending on scraps alone for production.
Speaking at a business luncheon organised by the firm in Lagos, yesterday, the Group Managing Director of the company, Alok Gupta, explained that the firm decided to explore the export market having satisfied the domestic market demand for construction steel and iron bars.
“Recent adjustment of naira has made our product more competitive to the extent that a significant amount of our production is in now destined for export. We are targeting to export between 150,000 – 200,000 metric tons of steel on annual basis to start with. Our export of steel during first nine months of this year has increased over three folds by weight and value compared to last year.
“However, there are many miles to go and it is just the beginning. 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”, he added.
Fayemi who was represented by the Director, Steel and Non- Ferrous Metals, Ime Ekrikpo, 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 iron ore,” he said.
Also Speaking, President, Manufacturers Association of Nigeria, Mr. Frank Jacob, applauded the company’s export feat, saying, “In spite of harsh operating environment, they are able to produce, export and earning forex for the country. I congratulate them”.
Group Executive Director, African Industries Group, Uche Iwuamadi, noted that the company has invested over $1.1bn in Nigeria as total investment of the group and plans to invest more in upcoming projects, adding that exporting steel saves the nation over $650mn yearly.
“In the past, many people have been importing steel into this country; nobody talks about that because imported steel cannot compete with our own. We are in the same standard so you don’t need to waste your money importing steel”, he added.