Gupta: Backward Integration Crucial for Nigeria’s Economic Rebirth

In this encounter with the Chairman African Industries Group, Raj Gupta, he speaks on how companies are currently looking inwards to deepening local content to further explore opportunities in Nigeria’s economy. Raheem Akingbolu brings the excerpts

As a stakeholder in the manufacturing sector, how is the sector faring amid the current economic challenges?

Let me start by stating explicitly that there is no economy without challenges but government policies by various governments have ways of cushioning the effect. Much as I agree that things are a bit tough for manufacturers in Nigeria, I believe the federal government is working hard to mitigate them. Among others, we have witnessed in the last few years issues related to multiple taxation, high cost of borrowing, infrastructural inadequacy and low local content development and patronage of made-in-Nigeria products. However, the Manufacturers Association of Nigeria (MAN) has identified most of these challenges and has consistently engaged the Federal Government and other relevant authorities to address the problem.

What is your take on low local content development and patronage of made-in-Nigeria products?

 In addressing this, I will make reference to our company, African Industries Group and our determination to help Nigeria maximize steel production as a catalyst for backward integration in the steel and iron industry development. Generally speaking, Nigeria has a low local content adoption and patronage of made-in-Nigeria products and I think this is one thing the government is working hard to reverse. To this end, MAN has continued to urge government to ensure effective enforcement of local content and patronage regulations.  

 How can AIG help Nigeria maximise steel production?

One, our target is to make Nigeria Africa’s steel hub. We have put a lot of plans in place to help Nigeria grow the steel sector into a globally dependable sector and achieve backward integration. To achieve this, we will begin with the group leveraging on its huge investment in steel to make Nigeria the hub and Africa’s number one exporter of steel products. Part of our vision is to grow our investment in the steel sector to a level that we would have placed Nigeria ahead of every other country in Africa. We want to make Nigeria the giant of Africa, and export steel from Nigeria to the entire Continent. African Industries Group is a leading Iron and steel manufacturer in Nigeria, with one of the largest production capacities for steel, aluminum and lead products in Nigeria. 

What is the manufacturing capacity of the group?

AIG has one of Nigeria’s largest manufacturing capacities of 1.2 million tonnes per annum of steel products catering mainly to the construction industry. Its main aim is to make Nigeria self-reliant in steel products and eliminating its dependence on imports, AIG has been a major contributor to the growth of the iron and steel industry in Nigeria for decades.   

Nigeria has rich Iron Ore deposits and the group has invested about 600 million dollars in Gujeni, which is Nigeria’s largest non-oil FDI, to establish a fully integrated iron ore mining and processing plant, African Natural Resources and Mines Limited (ANRML), the first of its kind. ANRML has a mining capacity of over 5 million tonnes per annum. 

What is the implication of this to the overall still and iron development in Nigeria?

The Direct Reduced Iron (DRI) produced will be a direct substitute for ferrous scrap currently used as raw material for producing steel in Nigeria. It will also gradually position Nigeria as a prominent Crude Steel producer globally.

We have a massive State-of-the-art, high-tech manufacturing facilities, with various types of processing equipment and strong technical force to produce good quality steel products like Steel Billets, Rebars, Debars, Hot Rolled Steel Square Rods, Steel Angles, Steel Flat Bars, Steel Binding Wires, Cold Drawn Steel Wires, Steel Nails, ERW Steel Round Pipes, ERW Steel Rectangular Pipes, Steel Z and C Purlin, Steel Wire Mesh, Steel Chequered Plate and ARC Welding Electrodes. We also operate the largest shredder in Sub Saharan Africa.

Coming to quality, what will you say is the unique selling point of AIG?

We keep the quality of our products as our top most priority. We are one of the few companies in Nigeria that manufacture best quality Iron Rebars with local and global certifications like MANCAP certification by the Standards Organisation of Nigeria (SON); UK CARES accreditation; ISO 9001, ISO 14001, ISO 45001 certifications, OHSAS 18001 certifications. 

Besides, our iron and steel manufacturing divisions, which rely wholly on locally available materials in Nigeria, currently produce high strength TMT iron rods and all allied products used mainly in construction that have become a major source of huge foreign exchange savings for Nigeria every year.

To make Nigeria a hub for steel production, the country will not only be self-reliant, it must be able to export. Has AIG extended its frontiers beyond this shore?

Currently we are exporting steel only to francophone ECOWAS countries but continental looking at taking advantage of key treaties like the Africa Free Trade Area Agreement (AfCFTA) to launch out to the entire region and subsequently the continent. We are not only one of the largest manufacturers of various metal products but also one of the most quality conscious and sustainable in its processes.

What is the group policy on environmental protection?

We undertake scrap recycling as per European standards, to support the environment. Our Aluminum roofing sheets are environmentally friendly, containing a large percentage of recycled matter while the product is also recyclable, making them a rare waste in landfills.

How do you contend with competition and counterfeiting?

Let me admit that we are aware of the complexity of the Nigeria market but let me add too that the group’s businesses are sensitive to local and international competition. Our businesses are basically very sensitive to competition from within and outside Nigeria, the latter where governments not only subsidize the growth of such sectors, but also give the sector players long term single digit financial support.

Is AIG all about steel and aluminium?

As a matter of fact, AIG has good strength in steel, aluminium, mining and power, especially in power generation. But we also have a presence in many other sectors. We are into lead refining and export thus bringing into Nigeria foreign exchange. We are currently setting up a plant for manufacturing and refining sesame seeds while also building capacity in exporting sesame oil in an attempt to expand AIG’s investment in the agro and allied sector.

QUOTES

“Our target is to make Nigeria Africa’s steel hub. We have put a lot of plans in place to help Nigeria grow the steel sector into a globally dependable sector and achieve backward integration. To achieve this, we will begin with the group leveraging on its huge investment in steel to make Nigeria the hub and Africa’s number one exporter of steel products. Part of our vision is to grow our investment in the steel sector to a level that we would have placed Nigeria ahead of every other country in Africa.”

“Nigeria has rich Iron Ore deposits and the group has invested about 600 million dollars in Gujeni, which is Nigeria’s largest non-oil FDI, to establish a fully integrated iron ore mining and processing plant, African Natural Resources and Mines Limited (ANRML), the first of its kind. ANRML has a mining capacity of over 5 million tonnes per annum.”