Nippon Steel and Marubeni-Itochu Invest in Nigerian Cold Rolling Mill

Nippon Steel and Japanese major steel trader, Marubeni-Itochu Steel jointly announced on Monday the companies invest each US$ 3 million (approximately 250 million yen) in Nigerian cold rolling mill, Midland Rolling Mills (MRM). The firms aim to supply hot rolled coil stably to MRM while to serve regional demand for structural steel sheet in Nigeria and West African countries. Nippon Steel will supply more than half of raw material consumed at MRM.

MRM is the first cold rolling mill in Nigeria, established by SAFAL Group in November 2006. SAFAL Group manufactures cold-rolled, coated and colored steel sheet for structures or steel pipes mainly for Sub-Saharan African countries. MRM’s capital fund is 1.5 billion Naira (approximately 900 million yen) as of the end of November.

The plant is 100 kilometers north from Lagos on the site of 338,000 square meters. The plant has cold rolling facilities with output capacity at 150,000 tonnes per year. The commercial operation is scheduled to start in January 2011. MRM plans to introduce a new pickling line with output capacity at 300,000 tonnes per year in 2011 and to expand the cold rolling capacity to 200,000 tonnes per year in future.

Nippon Steel and Itochu-Marubeni Steel have started investment in SAFAL Group’s another re-roller in 2008. This is the second steel business partner in Africa for Nippon Steel. Steel sheet demand in Sub-Saharan African countries is estimated at around 3.5 million tonnes per year, almost a half of African total demand. Nigeria recently shows 5-7% yearly economic growth. Steel demand is expected to grow strongly.