Displaying items by tag: Nigeria Ministry for Trade and Investment

Nigeria: Minister of Trade and Investment, Olusegun Aganga, has announced plans to create a new tariff on imported bulk cement. The move follows the alleged cement 'glut' surrounding a dispute between importer Ibeto Cement and leading producer Dangote Cement in late 2012. The current duty on imported bulk cement is 10% but no levy is imposed on the commodity.

At a meeting on Nigerian business competitiveness organised by the Nigerian Economic Summit Group (NESG), Aganga said that there was no basis for importing cement clinker since Nigeria has a cement production capacity of 28.6Mt/yr. He also stated that at no time did he issue any import permit for bulk cement in 2012.

Nigeria'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.

Nigeria: Nigeria's Minister of Trade and Investment, Olusegun Aganga has announced that he will conduct an independent assessment of the country's cement industry to make it more competitive. The move follows a dispute between importer Ibeto Cement Company and leading producer Dangote Cement.

According to Aganga, at a meeting for stakeholders from the cement industry held on 7 January 2013 in Abuja, by the end of the entire review the Federal Government will draw up with a new strategy for the industry with three goals. The first is to bring down the price of cement in the country, the second is increase consumption of cement and the third is work on policies to open up the export market.

Aganga defended Nigeria's 10-year implementation of the Backward Integration Policy (BIP). According to Aganga the BIP has resulted in about US$6bn of investment in the sector, with a growth from 2Mt/yr to 28Mt/yr, and it has saved the country foreign exchange of about US$1.4bn/yr. The Nigerian cement industry provides direct and indirect employment for about two million people.

"We have achieved everything we set for ourselves 10 years ago when the BIP was introduced; we want to take the next step as part of our strategy on the way forward," said Aganga.

Nigeria: The Ministry of Trade and Investment (MTI) has set up an institute called the Cement Technology Institute (CTI) to boost the quality of cement production in Nigeria. The Trade and Investment Minister Dr Olusegun Aganga, explained that the Institute would assist Nigeria in optimising its cement production capacity and capability, through acquisition and development of the appropriate technologies.

The announcement was made as the minister inaugurated the Board of Trustee (BoT) and the Project Implementation Team (PIT) for the CTI in Abuja. The Board is chaired by the Group President of the Dangote Group, Alhaji Aliko Dangote, while the Chairman of the PTI will be Alhaji Lateef G Salami, who is the Director of the Industrial Development department in the MTI. Inaugurating the BoT, the Minister pointed out that the Institute would also be the fulcrum for the positioning of Nigeria as a net exporter of cement with the capacity of meeting the needs of the Economic Community of West African States.

The CTI will carry out research and development, technology adaptation and develop human capabilities. Aganga added that the objectives of the institute were: to train and enhance manpower in cement technology and related fields especially at the middle management level; to undertake research and development in the areas of suitable alternative technologies in cement manufacturing; promoting the use of local raw materials for cement manufacturing.

Others areas to be covered include: the development of specialised cements; improving and increasing the use of mineral admixtures; and the development of cleaner and more environmentally-friendly production processes, waste management systems and energy conservation methods. The CTI will work closely with other institutes and will run as a non-governmental organisation with the BoT members drawn from both government and major stakeholders in the cement industry.