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Published On: Tue, May 6th, 2014

Vision 2020: FG wants coys to embrace backward integration to boost steel production

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The Federal Government on Tuesday urged steel industries to embrace the backward integration and value chain approach to achieve the nation’s production target of 12.2 million tonnes of steel by 2020.

Mr Also Abdullahi, the Director, Steel and Non-Ferrous Metals Department in the Ministry of Mines and Steel Development, made the call in an interview with the News Agency of Nigeria (NAN) in Abuja.

NAN recalls that the Federal Government had set a steel production target of 12.2 million tonnes by 2020 as part of efforts to revitalise the steel sector.

Abdullahi said that this year, the ministry would come up with guidelines for steel production in the country to encourage backward integration processes.

He said that the cardinal principles of National Industrial Revolution Plan (NIRP) launched in January by the Federal Government were the effects of the backward integration efforts on the iron and steel sector.

He said that the Federal Government recently inaugurated a committee to come up with a wide range of incentives for steel manufacturers to boost steel production in the country.

He said that the ministry would soon prioritise iron ore mining titles to enable investors to carry out backward integration activities.

According to him, the Federal Government wants the private companies to invest in backward integration projects in steel production so as to facilitate the country’s efforts to achieve industrialisation.

Abdullahi said that the ministry would encourage investors to acquire iron ore mining titles to enable them get iron ore and other raw materials for steel production.

He said that the Federal Government in 2006 came up with an incentive which entailed a zero-per-cent duty on imported equipment of steel rolling mills.

According to him, the incentive led to the establishment of many private steel companies in the country.

The director said that the ministry would also come up with other incentives on hot rolled steel and cold rolled steel soon.

He said that one of the incentives would be granting a zero-per-cent duty on equipment used to produce cold rolled steel from hot rolled steel.

Abdullahi said that the bodies of cars were made from hot rolled steel and were not produced in Nigeria; while metal sheets were made from the cold rolled steel could be produced in Nigeria.

He also said that some of the iron pipes were made from cold rolled steel, while others were made from hot rolled steel, depending on the size and the thickness of a particular pipe.

 

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