Steel sector may not resume production until 2021 – MAN

Steel sector may not resume production until 2021 – MAN: Activities within the nation’s steel sector will remain paralysed for the time being as the industry is still smarting from the rippled effects of the ravaging coronavirus which has continue to take its toll on its operations within the past seven months, The Nation has learnt.

Confirming this development, the Chairman/CEO of Ikorodu Steel Mill, Prince Oba Okojie, during an interview with our correspondent, noted that resumption of production cannot be feasible due to a number of reasons, ranging from social distancing to financial challenges.

Okojie noted that during the period of shutdown, there was no production, stressing that production processes was also completely shut down thereby causing the sector a huge setback as workstations are expected to be heated 365 days of the year.

For instance, he pointed out that the furnace takes months to be heated to the required temperature, adding that even when the required temperature is met, the social distancing in the factory would not allow operation because steel factory cannot be operated by less than 50 people as it is labour intensive.

“Now that the curfew has been lifted, it possible to run the factory but below capacity, we are only functioning at less that 30 percent capacity. This is because number of persons that will operate in the factory at a time has been limited to 25 persons at a time due to the Covid-19 regulation. So this number of persons cannot run productively in any steel company. So, we are not really working in the actual sense, “he stressed.

Read also: Mining, agric campaigns hold ace to Buhari’s envisaged industrial revolution

Pressed further, he said, “What we are living on is the stock that was carried forward before the lockdown, and this is what the marketing department is selling for us to survive. During the lockdown, we were paying salaries, and now that the lockdown is over things have opened up, things are expected to have improved but the reverse is the case. Even when we are not selling at full capacity, we are still paying salaries. This makes the situation very unfortunate for the steel sector.

“The truth is that we are neglected as a sector, and our prayer is that the federal government should attend to our situation, and give us some palliatives like they did to some other sectors. It could be waivers, tax reliefs or something to cushion the effect of this pandemic on our sector. Some other sectors and organisations have been compensated such that some could work during that period. We are asking both the states and the federal government to look into our situation and come up with palliatives for us to avoid the looming loss of jobs that would result from permanent shutdown when most of our members may no longer cope with day to day running expenses of their factories.”

While commenting on high interest rates, Okojie lamented that high cost of funds is discouraging them from borrowing, stressing that the high cost of borrowing is a core challenge hindering growth of the sector.

He called on the government to look into the electricity tariffs as well as the cost of gas which is used by most members in generating their own power.