THE steel industry is a very important sector in the nation’s economy.
The steel industry produces items such as iron rods, barb wires, coils, as well as metal doors and windows, while it forms the bedrock of the country’s industrialisation.
The sector also provides employment to millions of Nigerians, particularly in steel rolling companies which produce steel materials.
Over the years, the steel industry has been facing some harrowing challenges which inhibit its growth and analysts insist that pragmatic efforts should be made to address the challenges and save the sector from total collapse.
Stakeholders in the sector recently identified the problems bedeviling the industry, saying that the challenges included erratic power supply and importation of raw materials.
These problems, they added, were some of the major factors inhibiting sustained steel production in the country.
Besides, the stakeholders noted that the challenges were preventing the steel companies from producing enough steel products to satisfy market demands.
Alhaji Ismail Bello, Managing Director, Crittal-Hope Ltd., Lagos, whose company produces steel, aluminium windows and doors, told newsmen that the incessant power outages had negatively affected his company’s output and production patterns.
“In the past, the company had up to 2,000 workers, who operated on shift basis, but today the employees are less than 200 and they work on a single shift. The downturn is due to the poor electricity supply.
“We consume about two drums of diesels daily, which translate to 480 litres per day. If you multiply that by N160 per litre; it means that we spend about N76, 800 on diesel each day.
“What will be our profit margin if we spend so such money on power alone? The poor power situation is adversely affecting our business,” Bello said.
Sharing similar sentiments, Mr Otori Maliki, the National President, Iron and Steel Senior Staff Association of Nigeria (ISSSAN), said that the productivity of many privately owned steel firms in Lagos had declined abysmally because of the poor power supply.
He said that the companies, which included Crittal Hope Nig. Ltd.; NIWIL Nig. Ltd. and EUREKA Nig. Ltd., were currently producing at 30 per cent of their installed capacity due to power outages.
Besides, Maliki said that the dearth of raw materials from Aladja and Ajaokuta Steel Rolling mills in Delta and Kogi respectively had hampered the productivity of the steel firms.
He said that under normal circumstances, the steel companies should not import raw materials, adding that if the nation’s steel rolling mills were functioning well, steel products would be cheaper and more affordable.
Similarly, the Jos Steel Rolling Mill, now known as Zuma Steel West Africa Ltd., is dormant due to inadequate power supply.
The company, which was government-owned, was sold to private owners in 2003.
“We are trying to have access to steady power supply; once we can get that, the mill will come back on-stream,” Mr Innocent Zuma, the Group Executive Chairman of Zuma Steel West Africa, said.
The Ajaokuta Steel Company, the nation’s biggest steel plant, was established to produce billets for the steel rolling mills, which, in turn, would produce steel materials such as barb wires and rods.
The complex has been making efforts to revamp its source of energy so as to enable it to resume operations and supply of raw materials to steel rolling mills.
Mr Joseph Isah, the Sole Administrator of the company, said that efforts were being made to complete the rehabilitation of the company’s thermal power plant to enable it to generate 110 megawatts, its rated capacity.
Isah said that when the power plant was fully rehabilitated, it would facilitate efforts to put other completed units of the steel plant into operation.
He rejected the notion that the company was moribund, saying that the erroneous public perception was based on “misinformation and lack of knowledge about steel production”.
Isah conceded that although the company had been out of production for years, its technical capacity had never diminished.
He stressed that pragmatic and regular efforts were made to preserve the company’s equipment, insisting that the facilities were largely intact and in good working condition.
“Ajaokuta Steel Plant’s equipment and facilities are robust, rugged and designed with 25 per cent safety factor. Similar plants in Russia and Ukraine have been in operation for over 100 years,’’ Isah, an engineer, said.
He also said that the company had signed a Memorandum of Understanding (MoU) with REPROM Company Ltd. which led to the renovation of the Light Section Mill.
On his part, Mr Lalit Saraswat, the Commercial Manager of Top Steel, Lagos, urged the Federal Government to ban the importation steel products into the country.
He said that the proposed policy would help the indigenous steel companies to grow, while boosting the nation’s economy.
He noted that the steel market in the country had become oversaturated, thereby reducing the profit margin on local steel products.
“We are only trying to break even in this sector,” he added.
Besides, Sarswat appealed to the government to make pragmatic efforts to address the current power outages across the country so as to boost steel production.
“Government’s intervention via the provision of electricity, availability of raw materials, good roads, policy on ban of imported steel products and reduced interest rates on bank loans will facilitate plans to turn around the steel industry,” he said.
However, Mr Julius Idubor, the Personnel Manager of Sun Flag Steel Nigeria Ltd., Ikorodu, Lagos, moaned that the importation of steel products into the country had negatively affected his company.
Idubor said that the continued importation of steel materials had been detrimental to local steel companies, adding that it had adversely affected their sales.
He also blamed the erratic and inadequate electricity supply in the country for the company’s dwindling fortunes.
“The poor power situation is another challenge we are facing because we are constantly on a 133KVA dedicated electricity line provided by Ikeja Electricity Distribution Company (IKEDC) in this neighbourhood, without which we cannot work.
“We use electricity and gas to power our furnaces. Government should help us by improving the electricity supply situation because nowadays, our gas supply too has dropped,” he said.
All in all, analysts underscore the need for the government to make tangible and pragmatic efforts to tackle the perceptible challenges facing the country’s steel industry.

Related News