Blog

Meet The Couple Behind Nigeria's Largest Steel Sheet Factory - Ventures Africa

In 1971, General Yakubu Gowon, then military ruler of a Nigeria recently emerged from a devastating civil war, established the National Steel Development Authority (NSDA) to harness yet another of Nigeria’s numerous natural resource blessings: an estimated five billion tonnes of iron ore reserves. Gowon had hoped that his actions would set Nigeria on the path towards becoming a present-day global steel producer and an industrial player. However, over four decades later, Nigeria’s iron ore deposits remain largely untapped, a legacy of easy oil, and the steel industry is all but non-existent. Nigeria presently imports 90 percent of the roughly six million tonnes of steel it consumes annually from countries like China and the Ukraine. The impact is felt down the value chain, increasing the price of metal goods in Nigeria, slowing the pace of industrialisation and fuelling unemployment.

Though devastating for Nigeria’s economy, this adversity was an inspiration for Alhaji Kamoru Yusuf and his wife Bolanle, the brains behind Nigeria’s first independently owned cold roll steel complex, which they are building in Illorin, the capital of Kwara State. “The scrap material I use in making roof nail caps goes for around N50 [30 cents] per tonne in China. In Nigeria, they cost me N25,000 [$160]. I couldn’t compete successfully. I had to set up a factory in China to acquire scrap cheaply,” a smiling and now successful Alhaji Kamoru Yusuf says, reclining in his black leather office chair. His massive office overlooks the new white and blue steel plant in the large factory compound with warehouses holding rows and rows of nail-making machines. In many ways, the steel plant is his way of providing a local solution to his supply chain problems. 34 Degree 15 Gauge Finish Nails

Meet The Couple Behind Nigeria's Largest Steel Sheet Factory - Ventures Africa

Alhaji Kamoru Yusuf, affectionately known as ‘Kam’, ‘Kam wire,’ or ‘Kamal’ to the locals of Kwara State, is the founder and CEO of Kam Industries, a strong contender for the title of Nigeria’s largest independently owned nail and wire-producing company. It produces different types of nails in addition to wire mesh for concrete reinforcement, binding wires and roofing sheets, as well as other building materials. The company has five factories in Illorin, the capital of Kwara state, and a granite quarry just outside of the small city. Over a million bags of nails and 1.3 million tonnes of roofing sheets pour out of Kam’s factories to supply builders in Nigeria and West Africa. The 47-year-old, self-taught engineer and self-made multimillionaire has, with the support of his wife, turned a N10,000 advance he received on finishing a trading apprenticeship in 1987 into a $300-million industrial conglomerate. And he has done so without political connections or even a high school education. Bolanle Yusuf attributes the rise of Kam Industries to aggressive manufacturing, hard work and good old-fashioned entrepreneurship.

Kam’s trademark is a pair of black, plastic-rimmed glasses. His vision has been impaired by years of welding work – a skill he combined with what Bolanle stresses is an exceptionally brilliant imagination to design and construct several metal processing machines for producing nails – often using spare parts from trucks. After studying German designs, he would forge the bodies, purchase engines that he couldn’t produce himself, and then assemble machine after machine. Kam’s desire to design and produce is almost compulsive. “Anytime I attend steel wire exhibitions, I go there to spy technology, check each country’s design, how they design it, and get the catalogue,” he says. “I investigate how to redesign them to work for Nigeria. I go to so many factories to study their operations. While people are running around trying to get a PhD certificate, I’m travelling round the world to get the knowledge of the masters.”

During a visit to one of the Kam Industries factory sites, situated along a dusty strip of road leading out of Illorin’s industrial zone, Kam is keen to show the very first nail filing machines he constructed almost 20 years ago, which are still in regular use. In another section, he pauses before the first of four nine-foot-deep furnaces, used for softening wire rods, placed into the ground. Kam admits the first oven – his own design – is not as elegant as the other three imported from Italy, but it is functional. “When I began travelling abroad I visited a factory in Italy where I saw a 1,000 degrees-Celsius capacity electric furnace which cost a fortune. The electric furnace could help me expand my business from nail production to making reinforcement wire meshes, so I made a sketch of it and studied the components. When I returned to Nigeria I bought the components I could find, gave the dimension[s] of the electric furnace to makers of trucks used in transporting petrol and instructed them to roll the plate for me like a fuel tank. I bought the bricks and got a bricklayer to shape them according to the sketch. I had purchased the heating elements abroad. We also developed an electric panel to operate the furnace [as] I had observed in Italy. And it worked!” Kam made two such furnaces before finally raising the capital to import the Italian versions. He still uses the first furnace he created, while the second has been decommissioned and is kept as memorabilia. Like the Chinese he greatly admires, Kam has pursued technology duplication as his strategy for increased productivity.

Kam regularly works long hours, arriving at his office at eight in the morning and rounding off his factory tours at around midnight. Bolanle, who is also the Deputy Managing Director of Kam Industries, keeps a more reasonable schedule, leaving earlier to attend to matters at home. Kam’s facial hair is now more white than black and his voice is permanently hoarse though loud, commanding and instantly recognisable. Kam’s appearance however is the opposite. Average height and with a slender build, the notoriously fame-and-press-shy Kam eschews the antics of his Nigerian contemporaries, who think nothing of hopping on a plane to London simply to shop for suits at the finest stores. Bolanle jokes that she sometimes has to lay out Kam’s clothes because he is incapable of coordinating an outfit. His unapologetically unassuming presentation hides a brilliance that has made him very wealthy and which could easily transform the nation. Bolanle Yusuf is different; vibrant and outgoing, with an eye for style. Her round face, cheerful attitude and soft voice make her appear much younger than her age. She is instantly disarming and fusses about the well-being of anyone who steps into her office. Beneath the soft exterior is an extremely savvy marketing mind.

Kam and Bolanle have a strong relationship, one which most married couples would envy. When I first met Kam, Bolanle had just returned from a trip to Dubai for business – and a little shopping, she admits. When her car pulled up to the factory entrance, Kam’s excitement was palpable. He stopped conversation mid sentence to rush over, open her door and wrap her in a bear hug. “I’ve missed you,” he said with an ear-to-ear grin. “You’ve been gone for three weeks.” She responded that she’d only been away for nine days.

The pair met while Bolanle was an English student at the University of Illorin. Bolanle, whose father was an academic, grew up in a household which stressed the importance of education. She was reluctant to date a trader without a high school education, though Kam’s persistence paid off. On their first date, police raided Kam’s small trading shop looking for contraband wires – a “tip off” from a rival trader. They also searched his home. When they found nothing one of the officers told Bolanle that she needed no more evidence that her “boyfriend” was an honest man. The two have been partners ever since.

Kam says he could not have prospered without the direct input of his wife who, from the time they started dating, neglected her school work, sometimes inadvertently missing exams, to ride along in his pickup truck and help him market nails and other building materials. Her importance to the Kam Industries operation is indisputable – her office is just down the hall from his own. She handles the logistics and welfare of the numerous foreign workers building the steel plant in addition to sourcing some of the construction materials, such as the massive amounts of cement necessary to build the factory.

Some 38 years ago, if you had asked a young Kamoru Yusuf what his life would look like in the future, he would surely not have told you it would be as it is today. At the age of nine years he was forced to drop out of school because of strife in his father’s polygamous home. Kam’s mother was the second of his father’s four wives, but she died in 1968 when he was just two years old, leaving him to fend for himself in a house seething with internal family politics. As a result of his experiences Kam, who is Muslim, resolved never to have multiple wives. As a child he was curious and often dismantled electronics to examine their components. An uncle soon took him on as an apprentice. In the area where he grew up, it is common for established artisans, traders and businessmen to pick younger men from the village and train them in a trade in the city, sometimes for as long as 10 years. After an agreed period, the protégé is then sent off with “freedom ceremony” to start a business of his own. The former master provides the seed capital.

Kam left his uncle in 1987 with a meagre N10,000, mainly because of his uncle’s unwillingness to let him go. Unperturbed, Kam travelled to Lagos to acquire goods for his new business. He met an Igbo trader and friend who gave him N100,000 when he heard Kam’s story. A few years later, Kam received a major breakthrough in the form of a credit facility worth N500,000 from Oscar James, a wire rod wholesaler and nail producer in Kwara, which he used to purchase wire rods for making nails. “I made N200,000 monthly from the loan and I bought my first house,” Kam recalls. He also married Bolanle.

The combination of Bolanle’s beauty, charm and education has been Kam’s most trusted marketing weapon from the very beginning. Young and outgoing , she aggressively pushed Kam’s goods into new regions. She would drive their only pickup truck from Kwara south to push their products into the larger markets of Ibadan, Oshogbo and Lagos. It is an arrangement that still stands today. She handles the marketing while Kam handles the manufacturing.

When Oscar James exited the Nigerian market in 1996, Kam acquired three of their nail-making machines. While the acquisition was a net positive, it brought on a new set of challenges, mostly in the form of competition from more established players in the nail-making industry. Nail producers for whom he had once distributed refused to supply him with raw material. “The Nigerian wire industry was frustrating me,” Kam says. “Ola Wheel in Oshogbo was frustrating me… They were reluctant to draw wire for me. They were afraid I’d disturb their market.” His income vanished; but this hardship provoked a new level of exploration and discovery as he learned how to innovate. “I had to develop myself. I was compelled to design the machine myself so I could buy wire rods somewhere else and process them into the hoarded drawing wire myself,” Kam says of this stressful period. He built his first drawing machine himself after many rounds of trial and error, employing a basic knowledge of rotors, gears, mechanics and power.

Factory 1, Kam’s first factory, sits 400 metres away from his office. Because he is busy with the steel processing plant, he rarely has a chance to visit the hectare-sized factory site. The long cement block buildings are unpainted and browned by years of dust and grease from the soiled hands of factory workers. At this site, the factory workers are all male. Their ages vary but they all tend to look the same – covered in oil-stained t-shirts and trousers. Factory 2, Kam’s second nail production line located in the same compound as his office and the new steel plant, is much neater. It is staffed mostly by women, all of whom wear neatly pressed purple coveralls. Though they operate the same machines as their male counterparts, their garments are unstained. Their production lines are also perfectly straight, unlike in the other factory.

Kam Industries employs around 200 female workers while most local factories don’t employ a single woman. The idea came about after numerous trips to source raw materials in China, where Kam noticed most of the machine operators were women. His first attempt to hire women as machine operators was met with resistance from the women themselves, as many considered factory jobs men’s work. “I just travelled to China, filmed female factory workers in line and came to play it for them and I left them with it for two hours,” Kam says proudly. He says the women were amazed after watching the video of Chinese women working. Many soon signed up. Though his initial purpose was simply female empowerment, Kam says he now prefers the female workers. “They’re trustworthy and stable. You could train a male operator today and by the third month he’s selling your industry secret to a competitor.”

Foreign Competition and Corporate Espionage 

Early in the morning on my second day with Kam, three of his top aides – his personal secretary, CFO and head of logistics – stood lined up next to his desk looking uneasy. Kam charged into the room and, without any greetings, began speaking loudly about “a problem in the East”, meaning Asaba, the capital of the oil-rich Delta State to which each month, Kam Industries regularly supplies two truckloads of nails and concrete reinforcement wire mesh – a quantity sufficient for the construction of 45 homes. A competitor had established a nail factory in the area and it was eating into sales as the company had priced its product N100 (about 60 cents) cheaper than Kam Industries’ nails. Kam’s additional overhead cost of transporting the metal building material to Asaba made it unprofitable to offer retailers a better deal. An impassioned Kam issued instructions for the immediate release of N3 million ($19,000) to secure a warehouse in the contested market. To his logistics head he ordered: “Send eight trucks [of goods] to Asaba now! Flood the market and sell a bag of nails at N3,750 ($23.6)!”

Numerous foreign nationals belong to the Manufacturers Association of Nigeria (MAN), the umbrella body for industrial operators in the country. Asian owned-companies represent large-scale production in several sectors from agriculture to food to construction. Nigerian newspapers regularly report that the country has become a dumping ground for substandard products produced in other parts of the world. The Standards Organisation of Nigeria (SON) has launched a renewed effort to tackle the problem. Kam says he has had his share of challenges from foreign interests but he will not say more. When I tried to photograph a piece of machinery in one of the factories, Kam was quick to stop me, explaining that he designed it and could not afford to let competitors see the model. It is not paranoia, as there have been numerous attempts to steel his designs. In one instance, a former employee was caught on CCTV taking pictures of machines in the factories. Upon interrogation, he confessed he was sent to infiltrate Kam’s operations by an official from a foreign-owned company in Lagos. The CEO of the company flew out of the country immediately after he learnt of the arrest.

Kam and Bolanle are passionate believers in local content and stress the urgent need for Nigeria, the world’s most populous black nation, to become a manufacturing powerhouse if it is to achieve economic dominance. “We can’t keep importing everything and being the dumping ground of foreign countries if we’re to mitigate unemployment and be a developed nation,” Kam says, with no small measure of frustration in his tone. “A consuming passion for my country drives me,” he adds. And this is easy to see. His second largest factory is painted in green and white, the colours of the Nigerian flag. His love for Nigeria, however apparent, is often expressed through frustration. He periodically rants about Nigeria’s poor roads, power infrastructure and its employment problems. However, with each comment he provides a practical solution. “Do you think I cannot sit back and quietly enjoy the fortune I have made like most rich Nigerians?” Kam asks rhetorically, jerking forward in his seat and pointing a finger at me. “But I want to prove a point – to myself, to Nigerians.” He admires Aliko Dangote, the owner of the eponymous Dangote Group and Africa’s richest man. “No matter what reservation the public holds regarding his connection with the government, the truth is he has created thousands of jobs, plummeted cement importation, decongested our ports, and saved our money from being transferred to foreign currency, retaining the cash in the local economy.” Kam says with a clenched fist.

A short drive down a dusty access way between the nail production lines and the Kam Industries headquarters leads straight to the entrance of their newest and largest project to date, a $250-million cold roll steel complex. The cold roll mill will process 150,000 tonnes of imported hot roll steel annually – almost one tenth of Nigeria’s annual cold roll sheet consumption – into sheets of various thickness. This material can be used in the production of auto body parts, containers, and even parts of specialised roofing nails that Kam Industries currently imports from a factory it owns in China. When running, the complex will consume approximately 205MW of power, double the power generation for Burundi. Kam says he “coughed up” almost $10 million to Dangote to acquire bulk cement for the project, a transaction managed by Bolanle because of her industry connections.

The complex is a massive combination of four factories housed in three interconnected warehouses which rise as high as 35 metres and stretch as far as 100 metres. In the first factory, called Pickle Line, imported hot roll bands are uncoiled and treated in a series of hydrochloric acid tanks to remove rust before they are lubricated with rust-preventive oils. At the main production line the sheets are pressed to reduce thickness and then processed with metallic coating before delivery.

The complex teams with a multinational staff of contractors – Nigerians, Belgians, Indians and Chinese, among others. Kam has overseen almost every aspect of the complex’s construction, from the engineering of the foundation to the sourcing and layout of the necessary pressing equipment. He moves with ease through the factory, offering greetings in different languages.

This plant is the biggest risk of Kam’s life, a win or lose-it-all calculation, and Kam has invested a large portion of his net worth as an equity contribution for its construction. He also obtained syndicated debt financing from the Bank of Industry, First Bank and Wema Bank. “It’s no small feat by any means,” he says. This industrious man has commenced an ambitious and capital-intensive backward integration plan to eventually produce liquid steel, massively reduce the importation of metal products, and trigger a lasting Nigerian industrial revolution. Even the normally unflappable Bolanle is frightened by the magnitude of the pursuit.

According to Kam, the biggest challenge on the project to date was the 19 percent interest rate on his loan. “The Bank of Industry was lenient on the loan terms,” he says. The situation is still not ideal. Kam Industries’ head of business development, Bola Awojobi, says: “We grossly underestimated the magnitude of the cold roll project because of the unavailability of data. Forty percent of our tasks were unanticipated.” The learning process comes with millions of dollars of unplanned expenses and delays but Kam is undeterred. He is determined to commission the complex in the first quarter of 2014. As for future plans, Kam is already reading feasibility studies on Ajaokuta Steel, Nigeria’s large but dormant government owned steel mill. He says developing Nigeria’s iron ore is his life’s goal.

Kam and Bolanle’s 18-year old son, Toafeeq, who I spoke to just before I left, attends a boarding school just outside Illorin and has completely absorbed the idea that he might one day run this huge operation. His sister attends school in the United Kingdom. Toafeeq escorted his father to every single meeting that culminated in the construction of the complex.

With a intergenerational succession plan in the making and the first black-owned steel press in the world nearing completion, you would think Kam might relax, but he shows no signs of stopping. Kam’s nickname is “to be a man”, half of a phrase that ends “is not easy”, which was painted on a cart he used to push. When reminded that he might need a new nickname because he has a beautiful wife, two brilliant kids and a stellar reputation among his people, he simply looks up and smiles before saying, “the struggle continues.”

Meet The Couple Behind Nigeria's Largest Steel Sheet Factory - Ventures Africa

Galvanized 18 Gauge Brad Nails © 2024 Ventures Africa. All rights reserved