Nigerian aluminium industry facing multiple difficulties

Nigerian aluminium industry is suffering severely due to multiple problems including poor quality raw materials, high cost of energy; cheap sub-standard imports and the apparent lack of government interest in sustaining the aluminium industry.

The aluminium industry is buckling under the weight of rising labor costs, electricity costs as well as high taxes as informed by an industry source.

Most of the people who spoke to Real Sector Watch complained of the high electricity charges that is causing a lot of them to close operations and driving more people to do the same. This has also led to many lay offs.

First Aluminium plc managing director revealed in an exclusive interview that they had to close down operations in December 2012 and even now the production is uneconomical due to the high energy cost.

He also admitted that they had to lose 200 employees in 2012, and in 2011 situations were so bad that their gas was cut off for six weeks. Even in 2013, the energy bills contributed to 22.7% of their costs which is N20 million every month. After they stopped their rolling segment, the company now saves 75% of its costs.

Aside from all of the production difficulties, there is also an influx of cheap quality pink coils from China which is crippling the domestic manufacturing units even more. The corrupt custom officials are not helping the matter as they have increased the activities of importers of standard finished aluminium products. This shows the lack of interest in the government to protect the home aluminium industry.

As a result, the aluminium players of Nigeria have joined together to demand a revision of the aluminium standard to a minimum of 0.25/1000mm for the short span and 0.30/1200mm for the long span. The international standard for aluminium roofing in most places is 0.4mm. However, the lower aluminium standards will reduce production costs and give the domestic Nigerian aluminium industry, a fighting chance to survive.