The Ajaokuta Steel Company, also known as the bedrock of Nigeria’s industrialization, is a project that has been in process since the past 40 years but is yet to produce one tonne of steel, even after Nigeria spent over $8 billion on it. All attempts to bring the plant into production have been unsuccessful. Although, the Soviet Union built the plant to 98 percent capacity, the absence of a rail line around the plant, coupled with recurrent changes in political and operational management, obstructed completion.
In 1958, the idea of Ajaokuta Steel was conceived in a bid to balance Nigeria’s steel demand and commence the manufacturing sector of Nigeria and West Africa. The decision of establishing a large-scale national steel production plant was to gain power status and defense of national interests. With the rapidly growing population of Nigeria and the hike in demand for manufactured products, many manufacturing industries were established between the 1960s and the 1970s. However, given that national demand for steel was around 3.5 million tonnes per year between 1985 and 1995, bulk of the demands were met through imports – this encouraged the government’s industrialization drive.
Some parts of the installed equipment are getting corroded and degraded.
Currently, the federal government of Nigeria is sourcing for a core investor that can profitably run the plant on a concession basis – to revamp the steel company, $1.4 billion was estimated as the cost in 2020. To resuscitate the steel company, a proposal of remanufacturing has been made to aid the restoration of worn out products. The proposal argues that the economic, social, and environmental advantages of remanufacturing would likely bring a solution to the problems of the company by making it competitive enough to meet contemporary demands of good manufacturing.
In 2019, bilateral discussions identified the likelihood of Russia funding to revive the steel plant, but unfortunately, the COVID-19 pandemic and the Russia-Ukraine crisis might have held up agreements. Also, considering the lack of productivity of the plant, there might already be corrosion and degradation of some of its installed equipment. A group of Nigerian and Ukrainian experts who audit the plant have reported corrosion of some parts which could be a result of an acidic environment.
Remanufacturing would bring about employment opportunities.
It has been argued that remanufacturing as a major circular economy strategy, would restore the broken-down parts of the steel, get it operational, and build the local capacity for remanufacturing among Nigerians. According to studies it is suggested that the remanufacturing can reserve about 50 percent of the cost of a newly manufactured product, save up to 60 percent of the energy, 70 percent of the material, and about 80 percent of the air pollutant emissions. In addition, as a labor intensive strategy, it could bring about employment opportunities.
According to the UN Environmental Programme, studies reveal that remanufacturing has the ability to retain value, given that it can pull down new materials requirements by 80 to 90 percent, while increasing skilled labor hours by almost 120 percent. Before the commencement of remanufacturing, there has to be availability of cores, the possibility of disassembling them, and labor, with access to customers. However, after a thorough assessment of the Ajaokuta Steel Company Limited, it has been concluded that the obstacles to remanufacturing can be prevailed.
A Russian company would work with Nigerian engineers for remanufacturing.
For the effective management of the steel plant, it has been proposed that the Russian company that made the first installation of the Ajaokuta Steel plant, should work together with Nigerian engineers for the remanufacturing of the plant. For successful remanufacturing, there should be an auditing and assessment of worn out parts, figuring out the cost of remanufacturing, assessment of supporting stakeholders, remanufacturing of broken down parts, procurement of parts that cannot be remanufactured, and the installation of remanufactured and newly procured parts. With the aforementioned steps put in place, experts believe that the plant will become operational.
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