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31. July 2008

Nigeria - Epileptic power supply threatens 10,000 jobs in steel sector

The epileptic power supply situation in the country is threatening over 10,000 jobs in the steel manufacturing companies in Nigeria, according to informed industry sources.

The steel industry is one of the most labour intensive and is also among the highest users of local raw materials.

According to sources, the epileptic power supply in the country may force the steel companies to lay off over 10,000 employees.

The workforce is said to be crucial to meeting the target production of 650,000 metric tonnes of roll bars of steel, otherwise called iron rods, enough to meet the national demand.

Experts say the country has the capacity to produce 750,000 metric tonnes of steel, enough to cater for the entire West African sub-region. But realizing the target is being threatened by the poor power supply situation in the country.

Nigeria currently produces 30 percent of its demand and industry sources warn that if something is not done urgently to improve the power supply situation; more steel companies will close shop.

Didi Adodo, general secretary, Iron and Steel Senior Staff Association of Nigeria, said the rate of unemployment was increasing because more companies closed businesses due to crippling power supply.

"The workers are like parasites living on their hosts. When the hosts die, the parasites die with them. We are praying for the hosts not to die. Government should provide more power to the steel sector. We are not talking of free power supply; we are going to pay so that our employers will be in business," he said.

Jide Mike, director general of Manufacturers Association of Nigeria (MAN), said South Africa allocated 60 percent of its power generation to the mining sector, stressing that Power Holding Company of Nigeria (PHCN) should allocate more power to the steel sector.

"Steel manufacturing cannot survive on generators because most of the plants used in the industry cannot be powered by generators. There is supposed to be an alternative to electricity but in the steel sector there is no such alternative. Where is LPFO (Low Pour Fuel Oil), today? They are even trying to increase the prices of gas. Are they saying we should close steel manufacturing?" he said.

Romeo Barberopolous, chairman, Export Promotion Group of MAN, said the survey conducted by the Federal Ministry of Science and Technology in 1996 showed that the country had 60 foundries.

Today, there are about eight foundries in the country because the small and medium scale industries could not survive in Nigeria due to poor power situation, he said.

"The steel industry we are talking about is not only labour intensive but is also one of the highest ever local content material users. The steel sector employs over 10,000 people," he said.

Oba Okogie, chairman of steel manufacturers group of MAN, said the PHCN had allocated 24 hours per day of power supply throughout the seven days of the week to the Cement Group of MAN and called the power company to extend the same gesture to the steel manufacturers.

"We sincerely appreciate the efforts of PHCN in trying to provide 12 hours of energy to steel, but that period of allocation of this supply has seriously dislocated the shift arrangement of some of our companies, therefore, it will be beneficial if given supply 24/7, just as they do to the cement group", he said.

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