MAJOR INDUSTRIAL PLANTS

Steel Plants

In general, the {two major} steel plants were highly geared with high loan/equity ratios, highly dependent on imports for critical inputs and perennially plagued by inadequate funding, given the foreign exchange constraints. Moreover, in the circumstance of their low-capacity utilization they tended to be overstaffed. These constraints generally applied to the three inland rolling mills also Oshogbo, Jos and Katsina.

Ajaokuta Steel Complex (AJC)

Construction of the first phase of the AJC reached 98 percent by the end of the period. Further to the earlier commissioning of the Light Section Mill (LSMO (1983) and the Wire Red Mill (WRM) (1984), test run of the Billet Section Mill (BSM) was satisfactorily concluded, ancillary facilities – such as the foundry shop, thermal plant, thermal power plant, water supply and refrigeration, and machine shop – were completed and fully equipped; but the capacity utilization of the LSM and WRM fell. Foreign exchange constraints continued to impede the importation of AJC’s many key inputs – e.g., iron ore one concentrate, cooking coal, bauxite, manganese – while local supplies had not yet been fully developed, limited quantities of iron ore concentratewere delivered to AJC from the National Iron Ore Mining Project, Itakpe. Progress, however, was made in infrastructural development relating to AJC, particularly in the construction of the 55 km Ajaokuta-Itakpe mine standard rail line, the development of the 10,000 housing units, and the extended Ajaokuta-Warri rail line for the evacuation of iron ore super-concentrate to the Delta Steel Company.

Delta Steel Company

Similarly, Delta Steel, a direct reduction process plant, which imported some 80 percent of its raw material inputs, was hampered by the cash crunch, inadequate power supply from NEPA and gross capacity under utilization, among other factors. The major raw material, iron ore, was imported from Brazil, pending development of the Guinea deposit in which the Federal Government had equity interest. Despite its problems, DSC produced dome output of billets, rolled steel products and direct reduced iron, some of which like the rolled products, were marketed locally or like the billets sent to the inland rolling mills, while some, such as the direct reduced iron and cold briquetted iron, were exported.

Paper Mills

  • Nigerian Newspaper Manufacturing Company Ltd (NNMC) Oku Ibokun, Akwa Ibom, operative in 1988; commissioned in 1986; for production of bleached and unbleached newsprint; 80% of its inputs was to be locally sourced, the remaining 20%, consisting of long fibre and chemicals, was to be imported, constraints of foreign exchange and working capital, particularly in the context of depreciated Naira exchange rate, plagued the plant from inception.
  • Nigerian Paper Mills, Jebba, operative in 1988, billed to produced some seven grades of industrial paper.
  • National Paper Manufacturing Company, Iwopin, Ogun; construction work began in 1977 but remained uncompleted by 1988; designed to produced long fibre kraft and bleached paper, to provide critical inputs imported by NNMC (Oku Ibokun) and Jebba mills, thus failure of Iwopin to begin production adversely affected Oku Ibokun and Jebba mills.

Fertilizer Plants

  • National Fertilizer Company of Nigeria (NAFCON), Onne

An integrated three-plant fertilizer complex producing ammonia, urea and NPK; commissioned in early 1988 though started production in mid-1987; very high capacity utilization: ammonia plan increasing from 105% in 1987 to 114% in 1988, urea plant from 100 to 104% in 1988, while NPK plant was at 48% in 1988; NAFCON sourced 20% of its raw material inputs from abroad and paid for these with exports of its products especially ammonia and urea; construction work for NAFCON Phase II expected to start in 1989 and NAFCON Phase III after the completion of Phase II.

  • Federal Superphosphate Fertiliser Company (FSFC), Kaduna

Production of FSFC stagnated at some 11% of capacity utilization in 1987 and 1988, largely because of the constraint of foreign exchange to import its raw materials input and spare parts and the underdeveloped state of domestic raw materials deposits.

Refineries and Petrochemical Projects

There were four refineries and two petrochemical plants in the country. Of the refineries, the First Port Harcourt Refinery, although fully rehabilitated after it was gutted down by fire in 1989, was still to recommence production. There were thus three functioning refineries (Port Harcourt II, Kaduna and Warri) towards the end of the period with a combined capacity utilization rate of over 70 percent. The petrochemical plants were located in the Kaduna Refining and Petrochemical Complex and the Warri Refining and Petrochemical Complex. Construction work was proceeding vigorously at the Eleme Petrochemical Complex, which was conceived as a second phase of the country’s petrochemical development.

The Nigeria Liquefied Natural Gas (NLNG) Project, Bonny

The NLNG project was re-launched after review of its process technology. We changed the technology and adopted the Air Products and Chemical Incorporated (APCI) process, which is more robust and widely used in the industry. We also reviewed its management and equity structure, and the country contributed its equity finding on the drawing board for almost two decades. I must acknowledge the contribution of those patriotic and dedicated Nigerians and the assistance of the Indonesian Government in getting the project off the ground. The agreement between the Nigerian LNG Limited and its technical adviser (Shell) for the construction of and operational phases of the plants have been put in place. The shareholders agreed on payment of an up-front contribution of a sizeable percentage of the total equity through an escrow account. The Final Investment Decision (FID) by which shareholders were to be irrevocably committed to the project would be taken up in 1995 while the first export cargo of LNG was expected in 1999.

NNPC

The NNPC headquarters and staff quarters in Abuja were started and virtually completed; pipelines and fuel storage depots were built in various locations throughout the country and the Turn – Around Maintenance (TAM) of the refineries were regularly conducted on schedule.

Oso Condensate

Another stand-alone project, the Oso Condensate Project inAkwa Ibom State, an NNPC- Mobil partnership, has operated very satisfactorily since it was commissioned in December, 1992. Production at the plant stood at 1.78 million barrels at end—December, 1992. Aggregate output in 1993 was some 26.9 million barrels, with a daily average production of about 100,000 barrels. Thus, the plant has already attained the peak level projected for the period between 1995 and 2000. The company exported a total of 17.7 million barrel of condensate from March to October, 1993.

Aluminium Smelter

The Aluminium Smelter Company of Nigeria, with annual capacity of 170,000 metric tonnes was established in 1988 at Ikot Abasi, Akwa Ibom State to produce immediate products for the aluminium industry which include 20kg ingots, extrusion billets, rolling slabs, coiled rolled sheets and foil products. It is a joint – venture between the Federal Government, Ferrostaal / EBE of Germany and Raynolds of the United States. The plant was designed to use the abundant local natural gas and imported bauxite as its major raw materials. Construction activities of the integrated smelter plant commenced with the foundation stone laid in November, 1990. About 140,000 tonnes or 82.4 percent of the company’s total annual output is earmarked for export while the balance would be consumed locally.

Machine Tools Plant

The Nigeria Machine Tools plant was established at Oshogbo and completed installation of its foundry project.

Energy – NEPA

Hydroelectricity projects at Jebba and Shiroro and the thermal power situation of Egbin were completed and commissioned. Challawa Gorge was constructed and commissioned.

Construction

Importantly, the development of Abuja and infrastructure was vigorously pursued and major elements completed, particularly as regards: roads, water supply, Federal Government Secretariat Complex phases I and II, Cantonment Battalion, Abuja, Conference Centre (OAU), Abuja International Airport phase I and II, National Assembly, Presidential Area, National Intelligence Agency Administration (AINA) headquarters, Supreme Court complex, District Hospitals in Abuja.

Road Construction

The Third Mainland Bridge in Lagos was completed and commissioned; also completed were Abuja – Kaduna-Kano dualisation, rehabilitation of some federal highways, building of some new roads throughout the country.

Railway Development

Construction of Itakpe – Ajaokuta –Warri, one rail line and rehabilitation generally of the Nigerian railway line.

Telecommunication

Strategic foundation work was accomplished in the telecommunication sector. We (a) succeeded in getting the International Telecommunication Union (ITU) to reserve geostationary orbit for African nations and paid for it (b) also succeeded in getting the ITU to reserve one third of Council seat quota for African nations (c) on the frequency spectrum, allocated various frequencies in the frequency spectrum for various uses – such as mobile phone services, maritime, television and radio broadcasting, etc – and deregulated them; (d) digitized all telephone exchanges although some analog systems existed alongside, (e) installed three digital modem gateways covering the country’s three zones – North (Lanlate), East (Enugu) and West (Lagos).

Nigerian Communications Commission (NCCT)

The strategic foundation work in the telecommunication sector led us to the rational establishment of the Nigerian Communication Commission (NCC), to administer and supervise the newly deregulated, de-monopolized, and highly profitable transmission on the frequency spectrum.

The Security Printing and Minting Company ultra-modern factory in Abuja was started.

Other Projects

Other projects include: the two sugar plants (at Bacita and Numani) cement plants, airport and seaports were given financial support to enhance their performance, as part of the effort to provide relief to the system. They include:

  • Federal Institute of Industrial Research Oshodi (FIIRO);
  • National Metallurgical Development Centre (NMDC);
  • National Office for Technology Acquisition and Promotion (NOTAP)
  • National Research Institute for Chemical Technology;
  • National Institute for Pharmaceutical Research and Development (NIPRID)
  • Projects Development Agency (PRODA);
  • Raw Materials Research and Development Council (RMRDC)