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Manufacturer Fret over Imminent Collapse of Aluminium Industry

08 Feb 2013

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Aluminium sheets



By Sunday Okobi and Zacheaus Somorin


The management of Tower Aluminium Nigeria Limited has called on the Federal Government to urgently come to the rescue of the aluminium industry in the country, in a bid to avert its imminent collapse.

The company stressed that most federal government policies in the manufacturing industry were favouring importation of aluminium and aluminium finished products rather than the locally made ones, adding that if the situation is left unchecked, it would run the company aground, as many workers have been retrenched due to its inability to keep them.

The country's head of Tower Aluminium, Chief Jinesh Dugad, who disclosed this at a media briefing in Ota, Ogun State, added that the company temporarily stopped operation last year December as they could not meet up with production requirement.
Dugad stated that if the government did not come to its aid, the company would pack up as the main materials used in the production of aluminium products - aluminium scrap and ingot (primary aluminium) purchased from Aluminium Smelter Company of Nigeria (ALSCON) attract import duty of five per cent just like those purchased outside the country.

According to him, for better utilisation of available natural resources, employment generation economic growth and industrialisation of the country,  federal government should protect local manufacturers against imports from unfair competition from China and other countries which are dumping aluminium coils and extrusion in the country; thereby killing local production.

He added that for the company to avoid the impending danger, government should also give zero duty on aluminium ingots and billets as well as plants and machinery spare parts, protect industry with anti-dumping duty and monitoring agencies like Customs, Standards Organisation of Nigeria (SON) should be jolted to life so that government is not short-changed in getting its legitimate due from import duty.

He urged the government to prevent the exportation of aluminium scrap abroad “which adds no value to the economy apart from the Export Expansion Grant (EEG) 20 per cent benefit, and as a result that getting scraps is posing problem for local manufacturer.”

“The protection we are asking for is to increase the import duty and imposition of levy on semi-finished and finished products and complete removal of import on raw materials as this will put the local manufacturers in a position to compete with traders who import finished products with no factory in the country and no value addition.

“At present, ALSCON does not have the capacity to supply Ingot requirement for the country in terms of quality and quantity,” he said, adding that: “Other developing and developed countries have protected their local manufacturers by imposing anti-dumping import duty. As more plants close shop more Nigerians will be thrown into the largely burgeoning labour market.”
The Tower Aluminium boss explained that for the sector to survive and keep production stable, “Local manufacturer must be protected from the scourge of importation from China. We are suggesting that import duty on finished products be raised from the present five per cent to 35 per cent plus a levy of 15 per cent.”

Dugad complained that manufacturers were not allowed to manufacture coils below 0.40mm, saying that it limits the capacity of Aluminium Rolling Mills of servicing the requirement of total aluminium Industry application, "however, coils of thickness less than 0.40mm have flooded the country by dubious declaration of thickness.”

Also, according to the company's factory manager, Mr. Ladi Alebiosu, what the industry needs from the government to avert the imminent collapse, is government protection just as it happens in the developed countries. "The best that the government can do for us now is to resolve the disparity between imported materials and the local ones, secondly, whatever the condition the government wants to give us, they should allow us to be the sole importer of the materials used in the production of aluminium products.”

He added that Nigerians were losing their jobs daily, pointing out that "in the last three months, over 450 workers have been laid off in the Kolokote section alone; other peoples’ jobs are also on the line including mine, Federal Government should please intervene and save local manufacturing industries from imminent danger."


Tags: Business, Nigeria, Featured, Manufacturer, Aluminium, Industry

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