Displaying items by tag: Nigeria

Nigeria: This week has seen a major development in the Nigerian cement industry, with a call from domestic manufacturers to ban cement imports, three months ahead of the government's schedule for the ban. The call has been presented in some quarters as proof that the country, long blighted by high cement imports, has achieved President Goodluck Jonathan's bold target of making Nigeria a net exporter of cement before 2013. In the face of steadily diminishing oil revenues the government would like Nigeria to be known as the regional cement exporter, but what else might happen?

According to the Cement Manufacturers' Association of Nigeria (CMAN), the country's total cement capacity now stands at 22.5Mt/yr. Domestic consumption is estimated at 18.5Mt/yr, translating into a required capacity utilisation rate of 82%. It is bizarre, therefore, that cement producers feel the need to call for an import ban. Perhaps:

a) The producers know that they can't compete with the low cost of imports from outside Nigeria,

b) The producers want to recoup their plant investment costs as quickly as possible,

c) The producers know that they can't export if the country continues to import.

With notoriously poor transport links within Nigeria, option c may be a small factor. If road and rail links are poor, transport costs increase and exports become less desirable for both the supplier and the end-user. What is more likely however, is a combination of a and b. Producers need to recoup their investments but can't if China and India can undercut them from thousands of miles away. If the desire to recoup investments goes unchecked when the import ban comes in, there is a high potential for cartel-like behaviour to surface again in the country.

One does not have to look back far to the last major incident of apparent cement market cartelisation in Nigeria. In mid-2011 President Jonathan had to step in and personally call for a 25% price reduction. His target was hit within three months, but since then prices have slowly started to rise again, even with Dangote's Ibese 6Mt/yr plant coming online just three months ago! With four producers committed to setting up a 3Mt/yr plant each by 2015 in exchange for 2011 import licences, the supply of cement in Nigeria will continue to rise, making the temptation to collaborate even stronger.

Nigeria: 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.

Nigeria: Nigeria's biggest listed company, Dangote Cement opened its new US$1bn cement plant in Ibese, Ogun State, on 9 February 2012, increasing its production capacity in Africa's most populous nation by more than 40%. The new plant will produce 6Mt/yr of cement, taking Dangote's total Nigerian production capacity to 20.25Mt/yr.

"We are working towards making the company one of the eight biggest producers of cement in the world," said Dangote's billionaire owner Aliko Dangote at the plant opening. "With the commissioning of the Ibese plant, Nigeria has been transformed from major importer of cement to self sufficient in production and export."

Dangote said that the new plant would generate around 7000 direct and indirect jobs for local people and spoke about his '20:2020' vision. He forecast that by 2014 his company would be active across 14 African countries, with its production capacity hitting 60Mt/yr.

Giving further details, Dangote added that within the next two years the company would complete upgrades at its Obajana plant in Kogi state, taking its capacity to a massive 15Mt/yr from 10.25Mt/yr at present. If realised, the expansions would make Obajana the largest in the world by installed capacity.

The ceremony was attended by the Nigerian President, Goodluck Jonathan, who cut a symbolic ribbon to officially open the plant for production. He spoke of security challenges in Nigeria, saying that Nigerians were 'tired' of (Boko Haram) bombings and needed more positive developments, like the opening of the Ibese plant.

"This story about commissioning is what Nigerians want to hear," said the President. "We have security challenges in the country. We have challenges in terms of infrastructure but we are totally committed individually and collectively to getting the country out of this situation. Our children want a better Nigeria than this."

The President also spoke about plans for major highway construction and redevelopment projects in Nigeria, many of which will likely source cement from the new plant.

His comments were echoed by the Govenor of Ogun State, Ibikunle Amosun, who said that ongoing industrialisation would be severely hindered without the easy and safe transportation of people and goods. Amosun commended Dangote for 'creating the enabling environment for this kind of gigantic project to materialise.'

Nigeria: The price of cement in Nigeria has risen by 25% since November 2011. This coincides with the peak of the nation's dry season, traditionally a period of increased construction. This has been exacerbated by the removal of Nigeria's fuel subsidy on 1 January 2012.

In Lagos and neighbouring towns in Ogun State the construction industry has witnessed unprecedented growth in recent years. Hajia Rukiyat Ajibola, a retailer in Mowe, Ogun State, stated that there was a high probability of the price of cement increasing even further if nothing was done.

Nigeria imported 124,000t of cement in December 2011. This figure represented a drop of 31% from November 2011 when 179,000t was imported into the country. Previously prices skyrocketed in May 2011 prompting President Goodluck Jonathan to issue a presidential directive to manufacturers to slash prices. At the time market leader Dangote and other manufacturers and importers announced price reductions.

Nigeria: The Nigerian president, Goodluck Jonathan, has said that the private sector is crucial in the drive by the government to diversify the economy. He said that Nigeria was currently 'over dependent' on oil. Jonathon used the official launch of the 1.65Mt/yr Lafarge WAPCO Lakatabu cement plant of Lafarge WAPCO in Ewekoro in Ogun State to highlight the importance of the cement industry in a more diverse Nigerian economy. The plant will take the company's cement production to 2.5Mt/yr in Nigeria.

The president described the cement industry as critical to his administration's drive toward moving the country away from a mono-cultural economy, critical to national survival. "If we do not discover oil reserves, our reserves will dry up; if that is true, we know that as a nation, we must prepare for our children and grandchildren," said Jonathon. "That is why we must diversify. That's why we must encourage our private sector to go into manufacturing."

The Chairman of Lafarge WAPCO, Chief Olusegun Osunkeye, said that the new plant will provide 1000 jobs and it would not relent in partnering with the government in its quest for socio-economic development.

Nigeria: Cement imports in Nigeria may begin to wind down soon, as the management of Dangote cement has concluded arrangements to finally launch its new 6Mt/yr cement plant in Ibese, Ogun State. Dangote Group additionally revealed that production at Gboko plant would soon be boosted because the company has almost concluded its expansion process in the plant to hit 4Mt/yr. The Gboko plant's current output is 3.5Mt/yr.

Dangote said that with 4Mt/yr in Gboko, about 10Mt/yr in Obajana and 6Mt/yr in Ibese, Dangote's cement production capacity will hit 20Mt/yr by the end of 2011. Nigerian demand is reportedly around 17Mt/yr. "What the Dangote Group alone will be producing will be far more than the country's demand, giving room for the group to commence cement exports to other African countries," said Dangote Group in a statement.

The group stated that by having cement plant in 14 different African countries, Dangote Cement has emerged as Africa's largest and most widespread cement producer, present in Zambia, Tanzania, South Africa, Congo, Ethiopia, Cameroon, Sierra Leone, Ivory Coast, Liberia, Ghana and Senegal. Dangote's plan, according to the company, was to ensure that Africa remains self-sufficient in cement production and in making the products easily available and affordable to end users.

The group was also keen to stress the benefits of increased production to its shareholders, with the Special Advisor to Aliko Dangote, Joseph Makoju, saying, "Very soon, the new lines in Obajana and Ibese will commence full production. By then the local capacity and output will be far more than the local demand of cement and that will set the scene for exporting our products. This will lead to increased product (sales), more revenue for the company and better returns for the shareholders."

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.

Nigeria: A disagreement between two workers at the Dangote Benue Cement factory in Gboko, Benue State escalated into a full-scale blood-bath on 17 August 2011, leading to reports of 20 deaths and the destruction of 154 trucks and 60 cars belonging to the company. Gboko itself has become a 'ghost town' after residents fled the town.

The violence started following a simple disagreement at a snack stand between two co-workers, a truck driver, named locally as Suleiman and the operator of the snack stand reported to be a Miss Kwaghkure. Apparently an agreement for Suleiman to be granted credit turned sour when he became unable to pay his debt and slapped Kwaghkure. This prompted an escalation in violence between those supporting the two parties and soon spread into full-scale looting of the plant, halting production.

Violence spread to the nearby town, where banks came under attack and the carnage even spilled out onto the local highway where innocent commuters were robbed. It is not known whether Suleiman or Kwaghkure are among the dead.

The plant's general manager (finance), Mike Etu, ruled out a tribal or religious dispute, saying it was purely driven by the interests of those involved. He lamented that although Dangote had been operating with the interest of the host community at heart, it had been under constant threat from cement looters. He expressed severe regret over the events and gave condolences for the dead and those affected by the incident.Dangote had previously ramped-up its security arrangements at the plant following smaller disputes.

Nigeria: BUA Group has embarked on the building of a USD 500m cement plant at Okpella community in Edo. When completed the plant will produce 2.5Mt/yr of cement. Executive Chairman of BUA Group, Alhaji Abdulsamad Rabiu, announced at the contract signing ceremony for the building of the plant on 2 June 2011 in Abuja that the building of the Edo Cement Plant would be completed by August 2013.

"The building of the Edo Cement Plant will take 28 months to be completed and it is expected to offer jobs to 4000 skilled workers and over 20,000 indirect jobs to Nigerians," Rabiu stated. He explained that the management of BUA Group had signed a contract for FLSmidth to build the plant, saying that the establishment of the facility was to assist the country to attain self-sufficiency in cement production. The project will be financed by FLSmidth and a consortium of banks led by EcoBank, which has so far provided an initial US$50m to initiate the project. Other banks in the consortium include First Bank, Diamond Bank, Fin Bank and Bank PHB.

The President of the Cement Manufacturing Association of Nigeria, Mr Joseph Makoju, lauded the management of BUA Group for the investment, saying that the plant would contribute significantly to the quest of the Federal Government to make Nigeria a net cement exporter. He lauded the government for its back-integration policy in the cement sector, saying that the policy would assist in efforts to reduce the high cost of cement and other building materials in the country. He expressed delight at the involvement of FLSmidth, saying that the company had already been involved in a number of successful cement plants in Nigeria.

The Vice President of FLSmidth, Mr Per Mejnert Kristensen, gave an assurance that his company would complete the building of the plant on schedule while commending the Federal Government for providing the atmosphere for foreign direct investment. He said his company would build a facility Nigerians would be proud of.