By Patience Chat Moses
The Nigerian steel industry is about to experience remarkable growth as China and Russia made their interest known in partnering with the sector.
The most recent partnership is that of Inner Galaxy Steel Company Limited, a Chinese firm, which has announced plans to invest $300 million in establishing a new steel plant in Ogun State to produce specialized steel products.
This was disclosed by the Minister of Steel Development, Prince Shuaibu Audu, in a statement released by Salamatu Jibaniya, the ministry’s Head of Information and Public Relations Unit, on Thursday in Abuja.
Audu noted that the investment aligns with President Bola Tinubu’s economic diversification policy under the Renewed Hope Agenda, reflecting the company’s confidence in Tinubu’s leadership to drive industrialization and boost the nation’s prospects through the steel sector.
The Minister assured the company of the Federal Government’s commitment to providing an enabling environment and fiscal incentives to support sustainable operations.
He added that the Ministry would review the company’s proposal and engage relevant authorities to explore concessionary benefits within the existing operational framework, emphasizing that this initiative aims to attract and facilitate foreign direct investment.
Mr. Li Shuang, President of Inner Galaxy Steel Company Limited, had earlier met with the Minister of Steel Development, Prince Shuaibu Audu, to seek the ministry’s support for a $300 million investment to establish a new steel plant in Nigeria.
Shuang explained that the plant would focus on producing specialized steel products, including plates, angles, beams, and stainless steel, among others. He highlighted that the investment would boost Nigeria’s steel production capacity, reduce dependence on imported specialized steel, conserve foreign exchange, and generate employment opportunities.
According to Shuang, the project is expected to create 10,000 direct and indirect jobs, alongside other economic multiplier effects. He also noted that the company has been operating in Nigeria for over 20 years, with its existing investments in steel production surpassing $1 billion.
The company in question, Inner Galaxy Steel Company Limited, is a subsidiary of Hongxing Steel Company Limited- which owns four other subsidiaries with interests in agriculture and oil and gas. The company according to its website, owns a production plant in the Amuwo Odofin area of Lagos.
The National Steel Raw Materials Exploration Agency (NSRMEA), reports that Nigeria’s steel consumption averages 10 million metric tonnes annually, with 70% of this demand met through imports. The Minister of Steel Development previously noted that the country spends approximately $4 billion each year on steel imports, despite the presence of about 74 steel plants and fabricators nationwide.
Earlier in the year, the Chairman of Dangote Industries Limited, Alhaji Aliko Dangote, announced plans to venture into Steel production and meet the country’s steel demand but halted such plans after problems with the government authorities concerning his refinery.
In a similar development, another Memorandum of Understanding (MoU) was signed with a Russian consortium for the rehabilitation, completion, and operation of the Ajaokuta Steel Company Limited and the National Iron Ore Mining Company (NIOMCO).
The agreement, which was formalized during a visit led by the Minister of Steel Development, Prince Shuaibu Abubakar Audu, to Moscow, marks a major milestone in Nigeria’s efforts to revamp its steel sector.
The consortium, including Messrs Tyazhpromexport (TPE), Novostal M, and Proforce Manufacturing Limited, will spearhead the project aimed at revitalizing the steel industry in Kogi State.
The MoU signing comes after the Russian-led consortium inspected the steel and iron ore mining facilities in Ajaokuta and Itakpe in August 2024.
Prince Shuaibu emphasized that the project is in line with President Bola Tinubu’s mandate to industrialize Nigeria and reduce the country’s heavy reliance on imported steel, which costs an estimated $4 billion annually.
By restoring operations at the Ajaokuta Steel Plant (ASP) and NIOMCO, Nigeria hopes to strengthen its manufacturing base and save significant foreign exchange.
This revitalization effort is expected to create over 500,000 direct and indirect jobs, contributing billions of dollars to the economy and supporting President Tinubu’s goal of achieving a $1 trillion economy by 2030.
During their working visit to Russia from September 14 to 21, 2024, the Nigerian delegation met with key stakeholders, including Mr. Alexey V. Gruzdev, Deputy Minister of Industry and Trade of the Russian Federation, and toured Novostal M’s state-of-the-art facility in the Saratov region.
The plant, with a capacity to produce 1.2 million metric tonnes of steel annually, demonstrated the consortium’s readiness to deliver on the MoU. The Russian partners, including the General Director of TPE, Mr. Egorov Sergei Anatolevich, and Proforce’s Group Managing Director, Mr. Adetokunbo Ogundeyin, pledged their commitment to the project’s success and called on the Nigerian government to provide an enabling environment to ensure smooth operations.
The Permanent Secretary of the Ministry of Steel Development, Dr. Chris Osa Isokpunwu, reaffirmed Nigeria’s dedication to the project, with the hope that it would boost the nation’s industrial capacity and economic growth.