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Yaoundé - 21 June 2021 -
Economy

Reinforcement steel: Threatened by massive imports, local manufacturers demand a quota in public infrastructure projects

Reinforcement steel: Threatened by massive imports, local manufacturers demand a quota in public infrastructure projects
  • Comments   -   Thursday, 03 June 2021 10:32

(Business in Cameroon) - In May 2021, the three main reinforcement steel manufacturers operating in Cameroon sent a memo to the Prime Minister asking for measures to protect the investments they have been making for years now to develop the local metal industry. Their memo was prompted by the numerous special reinforcement steel import authorizations being granted in the country despite the indefinite suspension of those imports the government decided in 2016.

In the memo consulted by Business in Cameroon at the Prime Minister’s office, the three manufacturers (Metafrique Cameroon Sarl, Aciéries du Cameroun, and Prometal namely) explain that to support the development of a local metal industry, the import ban must be enforced through a text jointly signed by the Ministers of Commerce, Finance and Industry. Once those texts are signed, the imported steel must be seized and systematically reimported to deter offenders, the manufacturers suggest.

Besides the text, they also demand the introduction of a quota of local steels to be necessarily used by firms that implement infrastructure projects financed by the State of Cameroon. In addition, they suggest, tax and customs incentives should be introduced in the 2022 finance law being prepared, to encourage local production and deter importations.

According to the steel manufacturers, if need be, the local standards will be raised. That way the competitiveness of steel products manufactured locally will be positively impacted in a context marked by the effective entry into force of the African Continental Free Trade Area (AfCFTA), the adoption of Cameroon’s Industrialization Master Plan (PDI), and the 2020-2030 National Development Strategy (SND20-30), which includes the transformation of the local industrial fabric as one of its pillars.

A new state-of-the-art plant

With a yearly production estimated to exceed 260,000 tons, the steel industry is one of the rare local industries that meet demands in Cameroon and even cater to exports. According to operators, in Cameroon, the yearly demand is about 180,000 tons, meaning the country can export some 80,000 tons of steel yearly. That steel exporting capacity will rise to 100,000 tons this year when the new state-of-the-art steel manufacturing plant built in Bassa industrial zone, Douala, enters its production phase.

Indeed, Prometal, leader of the local market, is currently finalizing the testing phase for the commissioning of the plant (Prometal 4) presented as the most modern iron processing plant, with the most diversified range of products, in Sub-Saharan Africa. Prometal 4 is the result of a XAF40 billion investment through which products usually imported by African countries will be manufactured locally, authorized sources informed. Those products are notably beams, angle irons, smooth bars, and screws as well as flat bars and wire rods, which are intermediate products used to manufacture nails. Credible sources indicate that Cameroon's trade deficit on iron-based construction materials could be reduced by 50% thanks to the local production of the above-mentioned products.

However, despite those competitive advantages and capabilities, local reinforcement steel and by-products’ manufacturers are still facing the challenge of massive imports specially authorized by public authorities for some firms carrying out infrastructure projects in the country.

Usually, the reason provided to justify those imports is that the quality of the local iron does not match the importers’ needs. However, this argument has been refuted, both by the attestations of the National Civil Engineering Laboratory (LABOGENIE) and by previous experiences in the use of locally produced rebar in large infrastructure projects, such as the 2nd bridge over the Wouri River, the Olembé, and Japoma stadiums and the hydroelectric dams that were built in recent years in Cameroon.

Brice R. Mbodiam

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