Indian steel maker, Aarti, is exiting the Nigerian manufacturing sector.
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.
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.
One of the bidding companies told BusinessDay, said: “We are aware that Aarti Steel Nigeria has been put up for sale but we are yet to make our bid.”
According to the source, African Industries and Bharti are bidding to buy the Indian-owned steel manufacturer for $50 million to $100 million. The process is expected to be completed in a few months.
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 sold its controlling stake in Guinness Nigeria Plc to Singapore’s Tolaram Group Inc.
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.