Cement Glut Threatens 18.5 Million Tonnes Of Production – Dangote

Cement manufacturers, under the auspices of Cement Manufacturers Association of Nigeria (CMAN), have said unless the federal government fulfills its promise of stopping the importation of cement, the cement sub-sector of the economy might go follow the  path of the textile industry.

This is following the disapproval expressed by the association over the resolve of  Ibeto Cement Company  to continue to import cement into the country despite the capacity of Nigerian manufacturers to meet local demand.

A statement by the head, corporate communications, Dangote Group, Mr. Anthony Chiejina, noted yesterday that leading cement manufacturers in the country – Dangote Cement Plc and Lafarge WAPCO Cement Plc – were alarmed at the glut created by cement importers.

The chairman of the association, Joseph Makoju, said the 18.5 million tonnes of cement production target reached by local manufacturers was being threatened by the glut in the sector.

The development has forced the Dangote Group to halt production in its almost four million metric tonnes Gboko plant in Benue State, the statement disclosed.

Makoju said ..“Yet the 18.5 million tonnes is representing just 65 percent of the present total installed capacity of the industry. Between 2002 and May 2012, a total of $6 billion in new investment was made by local manufacturers, while the ongoing expansion and new plants are estimated to cost another $3.5 billion. Due to continuous rapid growth, the nation no longer requires cement imports, as local demand is being effectively met and even surpassed,”

He attributed the hike in price of cement to high cost of moving the goods and energy supply.

“Energy cost accounts for over 35 percent of production cost and the price of low pour fuel oil (LPFO) has jumped up from N25 per litre in 2009 to N107.76 per litre as at November 2012, an increase of 331 percent,” he said.

Makoju, who also is also special adviser to Dangote Group’s chairman, Alhaji Aliko Dangote,  affirmed that the closure of  Dangote’s Gboko plant was not shut for turn-around-maintenance as assumed and peddled around.

The importation of cement, according to him, is a very cheap and attractive business but detrimental to the economy, with just 20 per cent duty, a levy of 15 per cent and clinker at 10 per cent, thus making the landing cost of imported cement very cheap at $35 or just over N5, 000 per tonne.

Group head, corporate communications, Dangote Group, Anthony Chiejina, also in a statement  lamented that this period is a difficult one for local manufacturers.

The Herald NG

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