economic woes, high debt fueling exit
…African Industries, Bharti bidding
Indian steel maker, Aarti, is exiting the Nigerian manufacturing sector, joining a long list of companies leaving the country on account of economic woes, BusinessDay can authoritatively confirm.

The Ota, Ogun State-based steel maker, has already been put up for sale and big players have submitted unconfirmed bids ranging between $50 million and $100 million.

The steel maker’s exit is attributed to a combination of factors, notably high rate of indebtedness, challenging economy, fluffing currency, surging inflation and high energy cost, a source who spoke on condition of anonymity told BusinessDay.
“It has a negative implication for employment and the country’s perception as an investment destination,” Yusuf added.

In 2017, Aaarti spent $20 million to $30 million to establish a 120,000-capacity cold-rolled mill in Ota, Ogun State, to serve Nigeria’s downstream players using the steel to produce home appliances, roofing sheets, metal furniture and filing cabinets, tables and chairs, among others.

But the investment does not seem to matter much now.


The company is asking investors to submit their profiles, another source noted, saying that the management of the company wants to hand over Aarti to a credible investor.

This will make it the sixth company to exit Nigeria in the first half of 2024 after Microsoft Nigeria, Total Energies Nigeria, PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria and Diageo PLC left the shores of Africa’s most populous nation.

The exit of Aarti will further dent the country’s perception as an investment destination and its $1 trillion gross domestic product (GDP) target, experts told BusinessDay.

“The continuous exiting of multinationals from the economy is a serious cause for concern and this is because of the implication that it has,” said Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise.

G C Tripathi, a director at Aarti Steel Nigeria, told BusinessDay that he is not aware that the company has been put up for sale, noting that key operating decisions come from Indian – the business headquarters.

Tripathi however said the business is trying to get more finance and bank commitments to increase production.

But a senior management of the company had confirmed to BusinessDay in March 2024 that the company was seeking investors.

The official said the company’s indebtedness was high and suppliers were worried that timelines for delivery had been missed several times.

“We are seeking a lifeline,” the official told one of our reporters.

On a quarter-on-quarter basis, growth in the basic metal, iron and steel subsector of the manufacturing industry slowed to 0.57 in the first quarter of 2024 from 1.1 percent in the fourth quarter of 2023. On a year-on-year basis, it grew by 0.11 percent from 0.46 to 0.57 percent.
Manufacturers have attributed the continuous exit of multinationals to the country’s worsening business environment and insecurity that are crimping profits and wiping off shareholders’ funds.

Segun Ajayi-Kadir, director general of the Manufacturers Association of Nigeria (MAN), said that rising energy costs, foreign exchange (FX) volatility, accelerating inflation and worsening insecurity are hurting manufacturers in the country and hampering their growth.

He said that the issue for manufacturers is further compounded by the uncleared forwards by the Central Bank of Nigeria (CBN), which have made several operators lose billions of naira.

He noted that the steel industry is highly vulnerable to the negative impact of these challenges, noting that most of the operators in the industry are struggling to survive.

kettykin:
economic woes, high debt fueling exit
…African Industries, Bharti bidding
Indian steel maker, Aarti, is exiting the Nigerian manufacturing sector, joining a long list of companies leaving the country on account of economic woes, BusinessDay can authoritatively confirm.

The Ota, Ogun State-based steel maker, has already been put up for sale and big players have submitted unconfirmed bids ranging between $50 million and $100 million.

The steel maker’s exit is attributed to a combination of factors, notably high rate of indebtedness, challenging economy, fluffing currency, surging inflation and high energy cost, a source who spoke on condition of anonymity told BusinessDay

This is not a good news and this government is handling situations like this with kid gloves...
By mid next year,their major priority will be 2027 election.
We must dissolve this unholy union.

Put source before we can argue with you

clearcrystal:


This is not a good news.

It seems like a bad news for the company after wasting collosal amount of money to set up in Nigeria and after Tinubu's policies they decide to count thier loss , sell off at a loss and move on

helinues:
Put source before we can argue with you

Argue with your keyboard.
https://businessday.ng/news/article/indian-steel-maker-plans-nigeria-exit-after-30m-investment/

kettykin:


Argue with your keyboard.
https://businessday.ng/news/article/indian-steel-maker-plans-nigeria-exit-after-30m-investment/

So because one Asian company left the Nigeria because our policies are no longer favouring them, then that means all the Asian companies in Nigeria are leaving?

Abi how many Asia company was mentioned in the article?

helinues:


So because one Asian company left the Nigeria because our policies are no longer favouring them, then that means all the Asian companies in Nigeria are leaving?

Abi how many Asia company was mentioned in the article?

Those eggs you steal what is your intention?


You wanna open a farm ?

Companies from Iragbiji will move in to take their places! Tankio

Omo you mean a jobless nairaland resident is now also stealing eggs?

This one na follow come curse ni

ScratchDtoto:


Those eggs you steal what is your intention?


You wanna open a farm ?

ScratchDtoto:


Those eggs you steal what is your intention?


You wanna open a farm ?

Why do you always sound incoherently on threads?

STFU if you don't have any contributions to the topic

helinues:


Why do you always sound incoherently on threads?

STFU if you don't have any contributions to the topic

Sounding daft won't help you get a job

BigkokoRep:
Omo you mean a jobless nairaland resident is now also stealing eggs?

This one na follow come curse ni

A trade mark ™️

ScratchDtoto:


Those eggs you steal what is your intention?


You wanna open a farm ?

Na faceless forum until Dem con pick some of una for the rubbish wey una dey write

Continue

DevilsEqual:


Na faceless forum until Dem con pick some of una for the rubbish wey una dey write

Continue

Another lambi patient

Humn! All the exit of these macroeconomic industries is a very bad omen for the Nigerian nation. Tinubu should better agree that his advent on this nation is cursed because everything about it is shrouded in fraud coupled with curses the beleaguered citizens are raining upon his government for the hardship never seen in history.

This will make it the sixth company to exit Nigeria in the first half of 2024 after Microsoft Nigeria, Total Energies Nigeria, PZ Cussons Nigeria PLC, Kimberly-Clark Nigeria and Diageo PLC left the shores of Africa’s most populous nation.

The exit of Aarti will further dent the country’s perception as an investment destination and its $1 trillion gross domestic product (GDP) target, experts told BusinessDay.

Where the hell is that propagandist called FreestuffsNg with all his warped economic postulations? Government is not by lies and propaganda

Au revoir.

and Bobo Chicago is not bothered

You know too well than arguing with obidient lunatics from Ipobland. Once I see thread with thier monicker detailing one negative I simply jump n pass allowing them full access to their foolishness.

helinues:


So because one Asian company left the Nigeria because our policies are no longer favouring them, then that means all the Asian companies in Nigeria are leaving?

Abi how many Asia company was mentioned in the article?

Wake us up when fellow African companies start leaving the country 😒

COMRADES, the renewed shege of the great 'tribulation' is not sparing anyone

Fckkin lies of sensationalization

Put source before we can argue with you ... Hmmm, need help with your academic papers? Contact us.

helinues:


So because one Asian company left the Nigeria because our policies are no longer favouring them, then that means all the Asian companies in Nigeria are leaving?

Abi how many Asia company was mentioned in the article?

I don't know how many industrial years or business year experience you have but i can educate you about how things work .

helinues:


So because one Asian company left the Nigeria because our policies are no longer favouring them, then that means all the Asian companies in Nigeria are leaving?

Abi how many Asia company was mentioned in the article?

one left, how many came in during the time frame


As a welder , I know this is a terrible news. Already, there has been over 200% increase in the cost of irons. A big player like this exiting makes a bad situation terrible and will push more shops to close

Misinformation. I’m out of here.

AcadaWriter:
Put source before we can argue with you ... Hmmm, need help with your academic papers? Contact us.

Bot.

Tinubu floating naira against dollar did an incalculable damage to the economy. These foreign companies depend on stable naira and dollar to thrive in the Nigerian market. Most of these investments were made when dollar was stabilized for 400s Naira with CBN, that's what they hedge it on or worst case 600s in the Black market on average. Keep in mind these companies sell their products to Nigerian businesses in Naira. So when Tinubu floated the Naira and it went to almost 2000 Naira to dollar, these multinationals were losing almost 400% of their investments or losses. Meaning, the investment they hedged on dollar to 400s Naira was now almost 2000 naira during the height of the Naira floating. To make matter worst, Tinubu government put a moratorium they can't withdraw more than 50% of their paid receivables in Nigeria dollar or domiciliary account. That was the final nail on the coffin to strangle them patapata.

Even Nigerians are exiting Nigeria in droves, biko anybody wey wan leave make he leave, anybody wey wan stay make he stay. Anyone you choose good. Ah! I don tire.