Displaying items by tag: CMAN
Nigerian cement producers seek code of standards review
17 April 2013Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has called for a review of the industry's code of standards. CMAN chairman, Joseph Makoju, made the call at a forum in Abuja on concrete specifications, applications and cement standards.
"We need to have our own relevant code of practices and standards revised taking local conditions into consideration. It is also very important that our codes are robust and standards are robust, practical and uniformly and consistently applied in practice," said CMAN vice chairman Jean-Christopher Barbant. He added the current codes, when reviewed, would ensure uniformity in applications.
Joseph Odumodu, the director general of the Standards Organisation of Nigeria, said that the issue of quality had been a major challenge facing the regulatory agencies. He cited an example of 32 cement trucks from Benin that had been blocked from entering Nigeria as an example that the federal government should emulate.
Nigeria’s overly neat cement industry
09 January 2013Nigeria's Minister of Trade and Investment, Olusegun Aganga brought together warring parties from Dangote and Ibeto Cement this week to discuss their very public spat about the state of the country's cement industry.
Claims that Nigeria is facing a 'glut' of cement have been building since the Cement Manufacturing Association of Nigeria (CMAN) declared that Nigeria was 'self-sufficient' in cement in late 2012. So when leading cement importer Ibeto Cement questioned this narrative, leading cement producers Dangote and Lafarge hit back. Aganga then announced a review of the country's industry.
Despite Nigeria's potential to consume cement, something is stopping it. Yet, as Ibeto Cement rightly asked, if Nigeria is producing too much cement why isn't the price falling?
Hard facts about the Nigerian cement industry are elusive. This is what we know. Nigeria's population is apparently 170m. Its cement industry has the capacity to produce 28Mt/yr (Global Cement Directory 2013). Its production level was 18.5Mt/yr in 2012 according to CMAN. However figures compiled by the United States Geological Survey placed production much lower at 11.6Mt in 2011. Consumption is believed to be 17-20Mt/yr. In 2011 it was 17Mt. Ibete Cement, the sole importer into the country, is allowed to import up to 1.5Mt/yr.
Nigeria's main producers include Dangote (19Mt/yr capacity, 70% of the market), Lafarge WAPCO (4.6Mt/yr, 17%), Unicem (2.5Mt/yr, 9%) and Ashaka Cement (2Mt/yr, 7%).
Hype about Nigeria's potential as a cement-producing nation hinges upon its low per capita consumption (110kg) compared to some of its African neighbours and indicators of expected growth such as a housing deficit of 16 million homes.
CMAN boss Joseph Makoju addressed this head-on, blaming the high cost of haulage and energy. He said that the energy cost accounts for over 35% of the production cost and that the price of low pour fuel oil (LPFO) had risen by over 300% from US$0.16/l in 2009 to US$0.69/l in November 2012. It should be pointed out that Makoju is also the special adviser to the president of Dangote Group, Aliko Dangote. Unsurprisingly he has advised the Federal Government to impose higher taxes on imported cement to discourage imports.
The production boom of recent years has been threatened by a weakening increase in demand. The gap between production and lower consumption estimates is around 1.5Mt. Dangote and Lafarge WAPCO's combined unsold stock at the end of 2012 was also just below 1.5Mt. Both figures are suspiciously close to the amount Ibeto is allowed to import annually. As usual, the easiest target is the cement importer. Dangote's political clout as a key Nigerian company, large-scale employer and all round African success-story will doubtless help its argument.
Yet if imports are really more competitive than Nigeria's domestic product how can the country possibly hope to export cement? Also this week Liberia announced it has relaxed its tariffs on cement. As luck would have it Dangote is building a new cement plant in the country. Sounds ideal for tricky import negotiations.
Staying on track in Nigeria
10 October 2012"We believe that Nigeria has arrived as a cement manufacturing country," said Joseph Makoju, Chairman of the Cement Manufacturing Association of Nigeria (CMAN), to mark yet another 'moment' when Nigeria's ability to produce cement has overtaken its demand.
One of Makoju's reasons for Nigeria's 'arrival' was the fact that the Nigerian government hasn't issued any import licenses since the start of 2012.
As Global Cement Weekly #46 noted in April 2012 this is strange given that domestic consumption is up to 18Mt/yr: a figure 4Mt below modest estimates of national capacity which start at 22Mt/yr. According to Global Cement monthly price reviews the cost per bag has risen by 20% since 2010 despite presidential orders to keep it down. However much cement Nigeria seems to produce the price still keeps on rising.
The prices aren't the only figures that are rising year-on-year. Dangote, Nigeria's leading-producer, reported an increase in operating profit of 14% to US$745m in 2011 from US$654m in 2010. Lafarge WAPCO, the country's second largest producer, reported an increased operating profit of 41.7% to US$74.1m from US$52.3m.
Prices continue to rise but this could be due to cartel-like behaviour. President Goodluck Jonathan seemed to suggest as much in 2011 when he ordered prices down. Then again Nigeria's poor transport infrastructure and distribution chains could be to blame for rising prices instead. CMAN has announced plans to promote the use of concrete road construction with the government and Dangote announced plans in August 2012 to widen its distribution by opening more 'mega-depots' and signing on new distributors.
It's unclear exactly how much cement the Nigerian market actually wants. Its per capita consumption is 110kg, compared to 280kg in South Africa and over 600kg in Egypt. This is way down the consumption/GDP curve compared to Europe and North America. Its population has reportedly risen by 30m from 2006 to 2012. This implies massive total demand and demand potential.
So - past massive transport infrastructure projects, improved distribution and possible price inflation - how does Nigeria keep momentum? Ironically, given Nigeria's protectionist stance against imports, one of the measures CMAN is exploring is how to export cement to other countries. Recent news reports about local producers in Namibia and South Africa fighting foreign imports suggest that other African countries are starting to 'arrive' too. Even building the roads may not be enough to keep Nigeria's cement express-train on track.
CMAN declares Nigeria self-sufficient in cement
08 October 2012Nigeria: Chairman of the Cement Manufacturing Association of Nigeria (CMAN), Joseph Makoju, has announced that Nigeria is producing more cement than it consumes, at a meeting held in Calabar, Cross River State.
Makoju said that the Nigerian cement industry was recording success at a time when the manufacturing sector as a whole in the country was shrinking. He attributed the slide in the price of cement to a surplus in the market, a feat he described as a first in the country.
"We believe that Nigeria has arrived as a cement manufacturing country. We are out to encourage local production against importation. The government has been very faithful as local production rose from 2Mt in 2002 to 13Mt in 2011 and so far this year to 17Mt," said Makoju. He added that for the first time in the country's history it had gone nine months without the government issuing licenses for cement imports. CMAN is now working out ways to export cement to other countries in the west African sub-region. Yet despite the surplus CMAN is still encouraging investors to build more cement plants.
Other issues raised at the meeting included the effect the poor state of Nigeria's roads has on the price of cement. Makoju estimated that 30% of the price comes from haulage fees which CMAN has no control over. CMAN has taken up the issue with the government and recommended the use of concrete road construction.
Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has disclosed that the sector is poised to receive US$11.4bn in investment as national output reaches at least 45Mt/yr by 2015.
The managing director of Lafarge Cement WAPCO, Joe Hodson, said at a CMAN forum in Lagos that the consumption of cement in Nigeria was currently inconsistent with the existing economic realities in the country and would inevitably rise. He stressed that the per capita consumption of cement in Nigeria was a fraction of that in Egypt providing a lot of potential for development. Hudson noted that, having grown local cement output in Nigeria from less than 10Mt/yr in 2008 to about 28Mt/yr in 2012, the sector had made significant effort to save scarce foreign exchange and helped to create many jobs. However Hudson called on the Federal Government to address a lack of affordable power, lack of transportation infrastructure and dearth of skilled manpower.
The Federal Government responded by stating that it was now set to release the final result of the concession exercise it conducted for three major road construction projects in the country, which are to be handed over to the private sector. These projects included the Second Niger Bridge linking Delta State and Anambra State, the Bridge over River Niger at Nupeku in Niger State and the expansion and upgrade of the Apakun-Murtala Muhammed International Airport Road in Lagos.
Nigerian producers seek import ban before August 2012
25 April 2012Nigeria: Cement producers in Nigeria have called on the Federal Government to ban bulk cement imports before the August 2012 deadline set by the government, claiming that the volume of cement currently produced in the country is enough to meet local demand.
"The government should enforce the ban before the August deadline," said Daljeet Ghai, Group Chief Executive at Dangote Cement. "Dangote alone has the capacity needed to meet local demand and sustain supply of the commodity across the nation."
The current production data from the various plants in the country, obtained from Cement Manufacturers Association of Nigeria (CMAN) show that the country's total cement production capacity is now at 22.5Mt/yr while the country's cement consumption is 18.5Mt/yr.
Dangote alone currently accounts for 15Mt/yr while Lafarge Wapco Cement contributes 7.5Mt/yr. Unicem produces 2.5Mt/yr and Ava Cement produces 0.5Mt/yr.
Citing the example of the company's Ibese cement plant as basis for confidence in the ability of local manufacturers to meet domestic demand and still be able to export, Dangote's Ghai said, "The Ibese plant is grinding 0.48Mt/month, while daily production is 16,000t/day at 2400t/hr (6Mt/yr). It started with production of 12,000t/day in February 2012, but barely two months later, production moved up to 16,000t/day, it's full installed capacity."
Vijay Khana, Deputy Director of operations at Ibese Cement added that on a daily basis, the company supplies the market with more than 200,000 bags of cement.
Nigeria's second largest cement producer, Lafarge Cement Wapco, said that it is ready for the import ban. "For sure, I see a ban on cement imports happening," said Lanre Opakunle, Plant Manager at Ewekoro Cement Plant II. "The best thing for Nigeria is for us to manufacture cement here. If we manufacture it here, we create jobs here and we save the economy in terms of foreign exchange."
The CEO and President of Dangote Cement, Aliko Dangote, has said that the company will hold a 'cement import closing ceremony' whenever the ban is introduced.