Photo credit: Business Day
An Indian steel-making company based in Ota, Ogun state, is quitting Nigeria because of a combination of factors.
BUSINESSDAY reports that the company cited a high rate of indebtedness, a challenging economy, fluffing currency, surging inflation, and high energy costs as some of the reasons it is leaving the country.
The company has been put up for sale, and big players are already submitting unconfirmed bids ranging from $50 million to $100 million.
A source from one of the bidding companies said anonymously, “We are aware that Aarti Steel Nigeria has been put up for sale, but we are yet to make our bid.
The source revealed that African Industries and Bharti are bidding to pay the Indian owner between $50 million and $100 million. Still, the process is expected to be completed in a few months.
Another source added that the company has asked investors to submit their profiles. It said Aarti wants to manage the company in a credible manner.
This is the sixth company to exit Nigeria in the first half of 2024, following Microsoft Nigeria, Total Energies Nigeria, PZ Cussons Nigeria PLC, Kimberly Clark Nigeria, and Diageo Plc.
The exit of Aarti is expected to further dent the country’s perception as an investment destination. Experts say its the country’s $1 trillion gross domestic product target is also at stake.
Muda Yusuf, the chief executive officer of the Centre for the Promotion of Private Enterprise, said, “The continuous exiting of multinationals from the economy is a serious cause for concern, and this is because of its implications. It has a negative impact on employment and the country’s perception as an investment destination.”
In 2017, Aarti spent up to $20 million to establish a 120,000-capacity cold roll mill. The company aimed to serve Nigeria’s downstream players, using steel to produce home appliances, roofing sheets, metal furniture, filing cabinets, tables, and chairs, among other things.
However, G.C. Tripathi, a director of Aarti Steel Nigeria, said he was not aware that the company had been put up for sale. He noted that key operations come from India, the company’s business headquarters.
