Oyefesorhetoricaction | Nigerian Muse

Effort is being geared towards the commercial operation of the Rolling mills, particularly Light Section and Wire Rod Mills. Towards achieving this task, the reactivation of the Light Section and Wire Rod Mills have been scheduled to be completed by the end of December 2003, and thereafter, go into commercial operation. Towards this end, one hundred specialists from Ukraine are expected by 15th of November, 2003, to complement our effort in the completion of the reactivation works required in the Light Section and Wire Rod Mills.

Billets: A contract for the supply of 30,000 tonnes of Billets for production in the Light Section and Wire Rod Mills has been signed. Other contracts for the supply of additional billets for continuous commercial operation in the mills are at various stages of discussion with potential vendors.

Contract for the Rehabilitation and Completion of the Steel Plant: The contract for the rehabilitation and completion of the Ajaokuta Steel Plant was signed between Solgas Energy Limited and Zarubezhstroimontazh (ZSM), a Russian company on the 13th of October, 2003. The initial schedule of deputation of ZSM personnel for the rehabilitation of the steel plant has been agreed as follows:

* December 2003 , 60 personnel

* January 2004 , 80 personnel

* February 2004 , 100 personnel

Re-Structuring of Management: In order to lay proper foundation for effective implementation of the Concession Agreement, management of the company is being re-structured. Five coordinating groups have been formed to operate as semi-autonomous bodies for effective management and achievement of higher productivity. The coordinating groups are: Production, Engineering Services, Management Services, Steel Territory Authority and Metallurgical Training Centre.

Modifications of Ajaokuta Steel Plant: Efforts are on to incorporate Pulverized Coal Injection facilities in our Blast Furnace. When this is achieved, importation of cooking coal will be reduced by 50 per cent. It will consequently afford us the opportunity of utilizing our local coals with all the attendant advantages.The incorporation of an Iron Carbide Plant is equally being studied. This will increase our annual output by 400,000 tonnes and reduce scrap importation as well in addition to the high quality steel that will be produced. Community Relations:

ASCL under SOLGAS management has been able to link up with all our neighbours and some of the surrounding villages in order to foster an understanding and cooperation with each of them for the benefit of the nation. This is in line with the policy of the present management which is to live peacefully with all our neighbours and assist all neighbouring communities as much as we can.

Housing Development: In order to accommodate our technical partners, the Board has concluded a plan to make available 300 housing units immediately. This involves the issue of power and water supply and furnishing of the houses at Raccaform - one of our housing areas. Plans are equally afoot to make available over 6,000 housing units for staff occupation by the time of commissioning the steel plant. Ajaokuta Steel Company Limited is strategic for the industrial development of Nigeria and is rightly termed the "bedrock of Nigeria's industrialization". It is important to highlight some of the potentials of the Steel Industry in the economy.

UD-Stream Industrial Linkages: Development of Steel Industries promotes the exploitation and utilization of steel-based raw materials, such as iron ore, coal, limestone, dolomite and refractory clay. Apart from generating employment opportunities, these activities would bring about much development such as construction of roads, provision of electricity, provision of drinking water, a boost in the transportation industry, construction of markets, etc.

For instance, the development of the iron ore mines at Itakpe, the limestone and dolomite deposits at Ikpeshi and Jakura, have direct linkages to the Ajaokuta Steel Project. The mining of these deposits for utilization in iron and steel plants have far reaching economic implications for the immediate vicinity and Nigeria in general. Provision of infrastructural facilities such as roads, rail lines (Itakpe-Ajaokuta-Warri rail

line), electricity, employment opportunities etc are catalysts to the development of the neighbourhood of the mines and beyond.

Downstream Industries: The downstream industries of steel are those that process the products and byproducts further into other high revenue-yielding materials. The industries can be grouped into heavy, medium and small-scale.

Heavy industries include those that engage in production of equipment and machinery, that is, capital goods, while medium scale ones consist of those that produce consumer goods like tins, cans, drums, containers, auto-bodies, refrigeration equipment and other consumer items. Small scale industries on the other hand, are those that produce wire fasteners, wire gauzes, nails, bolts, nuts, hand tools, steel doors and windows, etc. The supportive role of steel in the establishment of heavy strategic industries deserves special emphasis in this paper by reason of its long-term indirect benefit in transforming many economies from the status of under-development to the rank of developed nations. Some of these spin-off industries cannot be embarked upon without a reliable local production of iron and steel, which constitute great proportions of their input requirement. Obviously, importation of large quantities of steel for utilization in such strategic projects would lead to a great drain of our capital resources to other economies. Among such projects are those involved in the manufacture of ships, railway lines, automobiles, as well as defensive and offensive weapons.

Ancillary Industries: Small scale industries that supply spares and consumables tend to cluster around steel plants because of various incentives and opportunities that abound in the location of the plants. These incentives include among others, availability of ready market, allocation of land in industrial estates; assured required raw materials source; greater scope for specialisation of products and availability of economic and social infrastructure. Thus, small foundries, light forge shops, small machine shops, auto-workshops, etc. are usually found within steel industrial plants. These industries further contribute to the overall development of nations by way of employment generation and increase in the GDP. Below is a list of some ancillary industries that normally cluster around iron and steel plants. Steel fabrication shop, Small lancing pipe fabrication, Machine shops for spare parts and non-standard fasteners, Steel and cast iron foundries, Small forge unit, Bolt and nut shop, Aluminum shot and notched bar production, Non-ferrous foundry electrical spare part production, e.g. carbon-brush, switch-gear part, link-chips, contacts, junction box, etc. Safety equipment production unit, Leather and cloth hand gloves, Safety boot production unit, Wire rope sling.

Benefits of the project to the nation and the populace:

Technological Acquisition And Human Resource Development: Operations in steel plants are complex and require high level of technology and industrial discipline. Hence, in nations where the plants exist, special technological skills of manufacturers of the Steel Plant abound. Furthermore, entrepreneurial skills and management techniques necessary for the development of long-term technologies are developed.

Besides, almost all types of production techniques are practised in steel plants. This makes the plant a veritable basis for scientific and technological research for industrial application and for developing skills in operating, maintaining and managing almost all types of industrial establishments.

Provision of Infrastructure for Industrial Development: Establishment of steel plants require enormous investments in provision of economic and social facilities such as hospitals, roads, bridges, schools, electricity and telecommunications. The projects also attract other economic activities in the region where they are located, such as banks, insurance companies, markets, and artisans. The positive externalities that result from the development of steel plants act as incentives to entrepreneurs for the establishment of medium and small-scale industries within the vicinity of the steel plants.

Generation of Financial Resources for Industrial Development: A substantial amount of steel products is exported directly and indirectly for purposes of foreign exchange earnings. In this way, many steel-producing nations have been able to maintain favourable balance of payments with their trade partners. Furthermore, the foreign exchange earnings are very useful in funding other development programmes.

In addition, steel-producing nations are saved from massive importation of steel products in the form of producer and consumer goods. This import substitution releases huge amount of foreign exchange needed for industrial development programmes. An indirect import-substitution effect also accrues when the products are utilized by down-stream manufacturing firms to produce other goods. Furthermore, proceeds from these products contribute significantly to increase the Gross National Product (GNP) of nations directly or indirectly with the resultant effect of increase in economic growth.

Provision of Employment Opportunities: When the first phase of the project is completed, the company will generate about 10,000 jobs. This will progressively increase to 20,000 at the 3rd phase. The linkage effects on the economy, which serves as catalyst for industrial activities, through upstream, downstream and ancillary industries, will create far more jobs thereby, reducing unemployment.

From the foregoing, it is hoped that in the next few months when you pay us a visit again, the progress in the plant reactivation and completion would be very obvious.