How To Make Money From Metal Scrap Business In Nigeria
The presence of metallurgical and foundry industries has done the country more good than harm. Though their advantages are not noticeable due to their silent impact on the economy, such industries should be encouraged to boost the economy.
Nigeria as a developing country should strive for the possible existence of more metallurgical and foundry industries. So far, not more than hundreds of such industry can be found within the country and most of them are operating in a small and medium scale capacity.
The fact that majority of such industry is operating in the small and medium scale capacity has made it impossible for their presence in the country’s economy to be felt.
Though there were many attempts made in the past by the government to enhance the presence of such industries in the country by the building of the popular multi-billion naira Ajaokuta steel mill and other steel mills across the country for an unknown cogent reason, these steel mills had remained non-functional for years after their establishment.
Thanks to private enterprises who took it as a matter of responsibility and for the business purpose to embarked on the establishment of the existing metallurgical and foundry industries within the country currently.
Despite their struggle for survival, the industrial policies and necessary supports have not been given to these industries especially in the area of steady public electricity supply, the introduction of raw material refining firms, lack of government’s full involvement to see the possible growth of the industries and among other challenges.
The foundry and metallurgical industries depend on processed iron ores and the ores of other metallic elements to make steel, alloys of metals, non-ferrous and ferrous metals, these products of these industries are the basic source of most of the domestic products used at home and offices.
The processed ores of metals are cast and converted to steel and alloyed metals of the various category by these industries.
At the last stage some of them can be processed further into domestic products like cooking pots, building rods, protector bars, beams for construction works, steel pipes for crude oil pipelines, steel sheets for gates and fabrication of vessels, automobile parts, and industrial
machines parts, etc.
The above works that such industries can do have shown the importance of their existence to any country of which, if their number runs in thousand in Nigeria; the developing country may become the highest exporter of steel products and other alloyed metals in Africa.
They need the help of raw material processing industries which is the starting point of metal production, but evidence has shown that these industries lack adequate raw material for their operation despite the huge deposit of iron ores and other solid minerals beneath the Nigeria soil at various places within the country especially in the Northern part where gold and copper ores had been found in large quantity.
The absent of enough raw material processing firms has made the available processed raw materials costs for the foundry and metallurgical industries, leading to their adoption of a new technic to curb the effect of lack of raw material.
The industries had been using the technic since to avoid total closure, and what is this technic?
The use of recycled metals. Yes, that is what majority of the industries are using to make their product.
The reason is that it is cheaper, easier to process and readily available.
Due to the weak competition in the past the business of supplying the used and condemned metallic products was not lucrative until the last few years that more metallurgical industries started springing up from various corners and most of them are foreign companies that decided to extend their branch to Nigeria.
Since then; the prices of used metallic products otherwise known as “scraps” has gone up because of stronger competition and increased profit generation by the industries due to the reduced importation of steel and other metals products into the country and the promotion of Nigeria made iron and steel and its related products.
Before now, running a scrap business is very simple and easy to start without any capital by just moving from street to street to pick up any condemned metallic product on the road until you can gather a reasonable volume of it which will be weighed and priced according to the weight. Running the business now can be a bit difficult and will involve a substantial amount of money.
To become successful in the business, you have to locate a good number of these industries and go into the business agreement on the number of tons of condemned metal products & offcuts known as scrap that you would be able to supply to them every week, month, or quarterly of the year. Upon the agreement, the prices must be decided on the per ton bases for each of your supply.
To know a ton of scrap metals, a spring balance is usually used to measure each scrap packed together in a bag. Though calibrated in kg 500kg of scrap metal times two is 1000kg which is equivalent to 1 ton of scrap metals.
Assuming the industries accepted to per you N100, 000 for every 1 ton of scrap metals, it means that if you succeed in supplying 20 tons of scrap metals your payment from the industries will become N2million.
It is a silent lucrative business now in Nigeria that someone with good capital may venture into. But have you asked the question of where you can get the condemned metals? Does that mean you will be moving around the streets like a madman? The answer is no. let me detail how you will be obtaining the condemned metal products.
There are over fifty scrap metals market in Nigeria with the highest number found in Aba, Port Harcourt, Onitsha, Lagos, and Kano, etc. these scrap metals markets sell in pieces like 1 to 2 tons per person to metal fabricators and the individuals in the business sell according to the same weight measurement which is the use of the spring balance.
Remember, you are just acting as a middle man by gathering the little tons in different places into the massive tons of scrap metals to the industries. If they find you to be making the supply steadily, the business will become more profitable because they may soon depend totally on your supply for their production.