Wempco invests $750 million to boost Nigerian steel industry

Nigeria: Wempco invests $750 million to boost Nigerian steel industry.
Western Metal products Company Limited (WEMPCO) has made a fresh investment of $750 million (about N88.5 billion) in a new steel plants at Ibafon, Ogun State, saying it is to boost local steel production in the country. Work in the factory which has a capacity to produce 750,000 metric tons of steel products, started three years ago, and it is expected to be completed by the third quarter of next year. "We are investing in the project in the lager interest of the economy. We have 100 per cent confidence in the economy, in the people and we believe if people see things the way we do, the better for the nation. Nigeria cannot continue to import products that their raw materials can be sourced locally. "That is our aim and focus for the flat steel sheet project and now integrated into our ceramic tile project on the same site. Some of these raw materials and construction are now sourced and done locally on site," said the Group's Director, Robert Tung. Group Chairman, Alhaji Tokunbo Alli, said the the company had also commenced moves to reduce the quantity of both hot and cold rolled steel coils being imported into the country by one quarter. He said the decision by management to cut down on the volume of the cold and hot rolled steel coils was to allay the fears of manufacturers in the sector who felt threatened by the incentive package granted to the company by the Federal Government. The chairman during a media tour of the factory sited along Lagos-Ibadan Expressway, said although the incentive package was given for the three phases of the project, yet, in order to calm the fears of member companies in the sector (Galvanized Industries and Steel Manufacturers Association (GISMA) and pipe manufactures, the company has decided to reduce the quantity of materials being imported for the construction of the projects by one quarter until the first phase of the factory is completed. The group, he stated, will later apply for same incentive package for the project when Phases II & III will continue, stressing: "We want to assure the Federal Government, Manufacturers Association of Nigeria (MAN) and our protesting manufactures that we are committed to this project and developing the steel industry as we have always done in the past in the sector we have invested in." WEMPCO Group, he said, was a long standing manufacturer established over 40 years ago in Nigeria with over 12,000 workforce that cuts across its 11 subsidiaries (all in the manufacturing sector particularly building materials.) "As a result of our confidence in the Nigerian economy and our vision for the future development of Nigeria in the steel sector, we decided as usual to further invest in flat rolled steel plant," he said. "We submitted our proposal to the Federal Government and the investment plan was approved along with some incentive package to further cushion the economic effects and encourage our group and potential investors. "Unfortunately, some of our competitors have protested against the investment incentive, claiming that it would adversely affect their own business. "The protest is on the following areas: pipe manufactures/GISMA; importation of 250,000MT each of hot & cold rolled steel coils of iron or non alloy steel, Cable manufacturer , two million meter of electric cable, and Paints manufactures, 2,000 MT of paints. "We, however, want to re-emphasise that these materials are for the project and not for sale as we are no traders. At the meeting called by MAN on 21st October, 2008, we explained on the rational for the materials that it is a turnkey project with specific specifications from our technical partners. However, we agreed as we usually do that all materials that are available would be procured locally especially for the cable and paint products when we are constructing our staff houses," he said.