Business Briefs
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THE federal government is planning to stop importing petroleum products by 2018 as the price of oil continue to fall in the international market. If this is done the country will save about $10 billion. Olusegun Aganga, minister of industry, trade and investment, said going by the government’s Industrial Revolution Plan, which started in 2012 the government was going to pay attention to sectors which it should have developed over the years, but for decades, relied entirely on exporting raw materials.
“That era has gone. That was why this administration launched the Industrial Revolution plan in 2012. We have started it already, and you can see it in the auto, the sugar, and the cotton and textile industries. If this investment goes according to plan; then by 2018, we will no longer import petroleum products into this country. We can no longer be a country that is import-dependent, especially in products we can produce ourselves. Nigeria has a comparative advantage in the agro-industrial, mining-related and petroleum sectors,” he said.
“We have spent about $3bilion importing steel. We spent about $6bn importing cars and spare parts. We spent about $1.7bn importing sugar, but we can in fact grow sugar cane in this country. As part of the industrial revolution plan, we have also identified 13 products that will replace oil. These are areas where Nigeria has comparative advantage and export capacity. Mexico did it in seven years. We can also start and diversify our economy and revenue sources,” he said.
Aganga made this known this during the inspection visit to Mikano International Limited in Ogba, Lagos, adding that the federal government has identified out 13 national strategic export products that could replace crude oil. He noted that the need to identify the products became imperative since the drop in the prices of crude oil was currently threatening the stability of the Nigerian economy.
He listed the 13 national strategic export products in three categories thus: agro-industrial (palm oil, cocoa, cashew, sugar and rice); mining-related (cement, iron ore/metals, auto parts/cars, aluminium, and oil and gas); and industrial products (petroleum products, fertilizer/Urea, petrochemical and methanol).
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Ajaokuta, Delta Steel Companies Start Production
THE federal ministry of mines and steel development has said that the Light Section Mill, LSM, of the Ajaokuta and Delta Steel companies would commence production in 2015. Musa Mohammed Sada, minister of mines and steels, who spoke through the director of steel and non-ferrous metals department in the ministry, said both companies had signed memoranda of understanding, MoUs, with different private investors on billet conversion to iron rods and other steel materials.
“The private investors will bring their billet and convert it to iron rods. We are starting that this year. The investors that signed MoU with Ajaokuta are a consortium from Nigeria and Ukraine. The LSM is a section of the rolling mill built for the production of iron rods and other steel materials. The company is divided into light, medium and heavy section mills,” he said.
According to the minister, the Delta Steel Company was sold to an India company Global Infrastructure in 2005. He said it operated for some time during which it borrowed a lot of money from Nigerian banks. “When they took over they were producing and selling the products, but unfortunately they were not reinvesting in the plant and in fact, at a point they could not even run the plant.”
The minister said Global Infrastructure was unable to repay its loan and pay workers’ salaries. He said the banks sold the debt to Asset Management Corporation of Nigeria, AMCON, and also had the challenge of replacing or repairing broken down machines. He said this led to the takeover of the plant by AMCON under the receiver-manager and had been discussing with new investors to take over the plants. “First of all, they have to agree on terms and secondly, they have to reactivate the plant. I am hopeful that Delta Steel will begin operation this year.”
He said out of the four privatised government-owned rolling mills, only Katsina Rolling Mill was functional. According to him, Delta Steel, Jos, and Osogbo Mills are yet to commence operation nine years after their privatisation. He said initially Katsina bought billet which it rolled into iron rods, but it had added other scrap-melting facilities to produce its own billet and roll into iron rods.
He said the ministry had been discussing with the owners of Jos and Osogbo Mills on the need to commence operations. “We will continue to discuss with them. Federal government’s plan is that the rolling mills should commence production after privatisation. “Unfortunately, we are still battling with the owners to see that they begin operation. These are lessons we have to learn from when next we are privatising,” he said.
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23 Firms to Invest in Car Assembly Plants
THE National Automotive Council, NAC, has said that the nation’s automobile industry had the potential to generate more than 200,000 jobs. Aminu Jalal, director-general, NAC, said the areas of job opportunities included mechanics, insurance, financing and logistics. “The auto industry is very huge and a car has over 2,000 components and each of these components is an industry,’’ he said.
Jalal said the new automotive policy of the federal government was investor-friendly. He said already 23 car assembly plants had shown interest to invest in the country. He listed the companies to include Piaggio Innoson Vehicles Manufacturing Company and National Trucks Manufacturers at Kano State.
Jalal said the federal government had given incentives to the tyre manufacturers to encourage them to invest in the economy. He said that tyre manufacturers like Michelin and Dunlop had shown interest to return to country. He listed the incentives to include free-duty on their equipment and incentive to import 20 percent of tyres into the country.
Nigeria is currently spending more than one trillion naira on the importation of vehicles and their spare parts. Substantial part of this figure would be saved if the nation’s automotive industry was fully functional. Jalal said the industry still faced the problem of scepticism on the art of potential investors who were doubtful of government’s commitment to the full implementation of the new automotive policy.
According to him, the federal government remained fully committed to the implementation of the policy and that this year, NAC would commit itself to local content development and assist local entrepreneurs in accessing financial assistance to boost their operations.
— Jan. 26, 2015 @ 01:00 GMT
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Tags: AMCON Aminu Jalal Asset Management Corporation of Nigeria Delta Steel Company Global Infrastructure Industrial Revolution Plan Katsina Rolling Mill Light Section Mill Mikano International Limited Musa Mohammed Sada NAC National Automotive Council National Trucks Manufacturers Olusegun Aganga Osogbo Mills Piaggio Innoson Vehicles Manufacturing Company
