NCDMB, IOCs laud Yulong Steel Pipe Mill

…multinationals, indigenous companies challenged to invest in the country                           

The Nigerian Content Development and Monitoring Board (NCDMB), major operating companies and other stakeholders of the industry have commended Yulong Steel Pipe Mill for the speed and quality of their investment, describing the factory as comparable to similar facilities in China and India.

The Executive Secretary of the Board, Engr. Simbi Kesiye Wabote recently led top executives of the oil and gas industry on a pre-commissioning visit to Yulong facility located at Lekki Free Trade Zone in Lagos.

He stated that the Board will work with the oil companies under the aegis of the Oil Producers Trade Section and Yulong to invite international certifying bodies to certify the new pipe mill.

Wabote pledged the Board’s commitment to support companies that invest in the Nigerian economy so as to create employment for Nigerians and challenged multinationals and indigenous service companies to emulate Yulong by investing in manufacturing facilities in Nigeria.

He indicated that the Board had clear guidelines for implementing Nigerian Content requirements in Free Zones through collaborations with the Oil and Gas Free Zones Authority (OGFZA) and the Nigerian Export Processing Zones Authority (NEPZA).

The Executive Secretary stressed that Yulong and other Oil and Gas companies operating in the Free Trade Zones were bound by the provisions of the Nigerian Content Act especially as it pertains to Expatriate Quota Utilization and employment of Nigerians.  According to him, “this facility provides a good opportunity for Yulong to gradually build the skills of Nigerians to eventually operate the facility. The Board is interested in seeing the laid out plans by Yulong to ensure that Nigerians are gradually trained to take over those responsibilities especially in the skilled areas.”

Speaking after inspecting the factory, the Nigerian Content chieftain recalled that “the case for the establishment of pipe mill was reinforced following a gap analysis conducted in 2011 which established an annual demand of about 83,000mt per annum compared to the capacity at the time of 100,000 metric tonne per annum in SCC pipe mill.”

He further said that, “ramp-up local capacity policy inventions were introduced to stimulate investment in the establishment of at least four pipe mills. The interventions include direct investment in Polaku Pipe Mill by NCDMB along with investors with an exit plan and support to third party investors by granting first consideration in procurement of line pipes for oil and gas projects.”

The Executive Secretary disclosed that the interventions were working as SCC had since expanded its capacity to 207,000mt per annum Helical Submerged Arc Welding (HSAW) line pipes. This capacity growth is about 30 per cent of industry demand with Yulong about to add 400,000mt of HSAW pipes and is targeting industry needs in Nigeria and other West African countries.

He reiterated that the Board will rely on the provisions of the Act that give first consideration to services provided within Nigeria and to goods manufactured in Nigeria to ensure that operators in the industry patronise the facility and other laudable investments.

The Executive Secretary commended the speed with which the factory was built, noting, “from what I am told, the factory actually started construction work in February 2016 and nine months later manufacturing has actually started. This is commendable.”

He also tasked the company to consider introducing another production line that will be dedicated to other types of line pipes required in the industry. He noted that there was excess capacity of HSAW pipes in Nigeria with a huge demand gap for Longitudinal Submerged Arc Welding (LSAW) pipes, High Frequency Welded (HFW) pipes and Seamless pipes. He added that investment in these mills will help address the remaining 70 per cent of industry demand that is still sourced abroad and ensure huge impact in spend retention, job creation and technology acquisition.

Earlier in his presentation, the Chief Marketing Officer of Yulong Steel Pipe Company Limited, Mr. A. Abbas stated that the intention of the company was to build the steel pipe complex in three phases. He noted that the first is to produce Spiral Submerged Arc Welding (SSAW) pipes, the second will be for Longitudinal Submerged Arc Welding (LSAW) pipes and the third will be the ER Welding pipes.

“What you see today is only the first phase of the Spiral Submerged Arc Welding Pipe. The production capacity will be 250,000mt per annum as well as a coating facility which can cover all types of coating reaching almost 3 million square metres per year”, Abbas affirmed.

He acknowledged the plant is integrated with a pipe coating facility which during peak construction will employ about 600 Nigerians for the project. Abbas also hinted that Yulong Lekki investment owns 51 per cent stake in Jiangsu Yulong Steel Company of China while in future, 49% equity of Yulong Lekki will be dedicated to Nigerian investors operating inside the Lekki Free Zone.

He also asserted that with the ground breaking ceremony in December 2015, the first pipe was produced in Nigeria in November 2016.

In his good will messages, the Managing Director of the Lekki Free Zone Development Company, Mr. Yonghua Ding stated that Yulong successfully passed the factory test-run at the FTZ and declared the mill fit and ready for production.

While commending Yulong Steel, Mr. Ding extolled the company for keeping to its commitment with the Nigerian government with an investment of good quality and fast speed.

The Managing Director of the Zone also said that the company made a great decision to comply with the policy of Nigerian government on Local Content and local industrialization as part of their contribution to the Nigerian society, economy, youth employment and for technical transfer.

Also delivering a message of good will on behalf of the Coordinators of the Zone, the Assistant General Manager (Zone Technical Services), NEPZA, Mrs. Pwash Eldon opined that the agency was impressed with the state of work done within the short period. She further commended Yulong for their commitment to ensuring that they deliver as they promised.

The NEPZA official informed that the agency’s management is a strong advocate of the NOGICD Act which is a rallying point for both the Board and NEPZA to collaborate for the overall good of the Nigerian economy and for the investor confidence.