Displaying items by tag: Nigeria

Nigeria: Lafarge's Ashaka Cement has reported that its first quarter 2015 profit fell despite reduced production costs. The fall was attributed to lengthy rainy rains and insurgency in the north of country that disrupted operations.

Ashaka Cement's operations have been disrupted by Boko Haram as the company is located in Gombe State, an insurgent hot-spot. Boko Haram has waged a six-year campaign to impose Islamic law, or Shariah, in Africa's largest economy and biggest oil-producer.

For the first three months that ended on 31 March 2015, Ashaka's net income fell by 53.5% year-on-year to US$4.47m and its sales dropped by 29.8% to US$22.9m. Gross profit was down by 48.9%, while gross profit margin fell to 35.7% in 2015 compared with 48.7% in the same period of 2014. Net margin, a measure of profitability and efficiency, fell to 19.5% compared to 29.5% in the first quarter of 2014.

While Ashaka Cement's profits flounder due to political risk, it was also able to reduce its costs. Cost of sales fell by 11.7% year-on-year to US$14.7m in the first quarter of 2015 as the company increased its use of local coal in place of expensive low pour fuel oil (LPFO).

Ashaka Cement is currently expanding its cement production capacity from 1Mt/yr to 4Mt/yr. The expansion will comprise debottlenecking of the existing line for additional 500,000t/yr and the installation of a new 2.5Mt/yr line, according to Suleiman Yahyah, chairman of the board of directors of the company. "As part of the expansion project, a captive coal-fired 64MW capacity power plant will be built in order to allow a reliable and sufficient source of power for the existing plant and the new cement line," said Yahyah.

Nigeria: On 2 June 2015 the House of Representatives intervened in a dispute between Ohinoyi of Ebiraland, Alhaji Ado Ibrahim and Company (AICO) in Kogi State and Okpella in Edo State over the ownership of a limestone deposit. The motion on the issue, which came as a matter of Urgent National Importance, moved by Edo lawmaker Abubakar Momoh, was unanimously adopted by the House.

"This peaceful co-existence is being threatened by the purported sale of OBU Limestone in Okpella, owned by Okpella Cement, to Dangote Company by Alhaji Ado Ibrahim. This is with a view to frustrating BUA Cement Company, which acquired Okpella Cement as a private investor," said Momoh.

According to Momoh, BUA has also built a cement plant in Okpella, which is due for inauguration in June 2015. "The House recalls that when in 1994, this same ownership of OBU Limestone deposit arose, the Okpella community went to court on the issue. The suit was filed against AICO, which prompted AICO to file application in 1997 to the Okpella community for local consent. The consent was turned down on account of having already granted the same to Edo Cement, which owned the mining license of the deposit," said Momoh.

According to Momoh, if nothing was done immediately to settle the matter, it might lead to a clash between the parties. He urged the security agencies to make adequate security arrangements in the location. "The governments of Edo and Kogi should intervene and settle the matter amicably, before it degenerates into serious inter-communal clash between the two states. The National Boundary Commission is urged to intervene with a view to permanently establishing the boundary between Edo and Kogi."

The acting speaker, Emeka Ihedioha, who presided over the plenary session, advised the two communities to maintain peace and assured them that the house would do its best to resolve the issue.

Nigeria: The management of United Cement Company of Nigeria (UniCem) has disclosed that the company will suffer losses totalling US$45.2m in 2015 due to the economic downturn currently affecting Nigeria, including devaluation of the Naira.

"The devaluation of the Naira impacts negatively on our business because most of our transactions, like procurement of spares and materials, payment of some of contractors (Macmahon and CBMI), energy cost and servicing of foreign creditors, are basically US$-denominated. Cumulatively, we will have a revenue loss of US$45.2m in 2015 due the devaluation of the Naira," said managing director Olivier Lenoir.

The construction of the line II project at Mfamosing, Akamkpa in Cross River State is on course and will provide employment for hundreds of workers. "This project will at peak employ a total manpower of 1915. At this moment the manpower working in the project is 1290. The operations will determine what the manpower need will be when we handover the project," said Lenoir. "The captive power plant is 85% complete and the civil construction of the second line is at 38%." He added that the major challenges in the project are non-technical and include high level of malaria infection, heavy rainfall and customs clearance problems. Lenoir said that, despite these hitches, UniCem is optimistic that the project will be completed on schedule by September 2016.

Nigeria: Dangote Cement has announced a gross profit of US$375m for the three months that ended on 31 March 2015, a 10.5% increase over the US$340m recorded in the same period of 2014. Its revenues rose to US$576m from US$520m in the corresponding quarter of 2014. The improvement was buoyed by maiden contributions from non-Nigerian plants. Net profit was up by 44.1% to US$345m.

Group cement sales volumes were up by 3.4% to 3.8Mt, driven by contributions from South Africa, Senegal, Cameroon and new lines in Nigeria. The margins from Nigeria increased due to pricing, improved gas supply and more use of coal. Dangote's newly-operational cement plants in Zambia and Ethiopia are expected to impact positively on its future financial situation.

"Our African projects are now beginning to deliver revenue growth for the group and even at this early stage we are seeing good potential in all the countries into which we are expanding," said company CEO Onne van der Weijde. "Senegal has made an excellent start, Cameroon is poised for a strong entry into an exciting growth market and Sephaku Cement is shaking up the South African market as the first new entrant in many years. Although sales fell in Nigeria, we improved both revenues and margins thanks to pricing actions in December 2014 following the collapse of the oil price and currency devaluation. We are making a significant investment to improve our logistical capabilities and I am pleased to report a much more favourable fuel supply in the first quarter of 2015. We have invested for growth in Africa and each new plant that opens will generate good returns for shareholders as we deliver on our promise to become Africa's leading cement company."

Nigeria: Dangote Cement has appointed Douraid Zaghouani as a non-executive director with effect from 29 April 2015. Zaghouani holds a degree in Civil Engineering from École Nationale des Travaux Publics de l'État in France and is also a graduate in Business Administration from the École Supérieure des Sciences Commerciales business school in Paris.

Zaghouani is presently the Chief Operating Officer of the Investment Corporation of Dubai (ICD). In this role, he supports the CEO's Office in corporate strategy development and is responsible for the efficient operational management of the organization.

Nigeria: The chairman of Ashaka Cement, Mallam Suleiman Yahyah, has said that the performance of the company in 2014 showed the resilience of the management and commitment of its parent firm, Lafarge Africa, to sustenance of investment in the north eastern part of the country. Despite losing US$7.54m to insurgents attack in 2014, Ashaka Cement ended the year with a profit after tax of US$22.9m, up from US$14.2m in 2013.

"We have embarked on the expansion of our cement production capacity to 4Mt/yr. The expansion will comprise debottlenecking of the existing line and installation of new line," said Yahyah. He added that Ashaka Cement's target is to achieve 95% coal substitution and to introduce a major corporate social responsibility (CSR) schemes that will help the community with agricultural development.

Nigeria: In November 2013, FLSmidth signed a number of contracts with Dangote Cement for operation and maintenance of production lines at its Ibese and Obajana cement plants in Nigeria for five years. Due to changes to market conditions, Dangote and FLSmidth have reached an agreement to end the operation and maintenance collaboration at the two plants.

The discontinuation of the operation and maintenance contracts will have no impact on FLSmidth's Group guidance for 2015. However, the demobilisation in Nigeria will have a negative impact on earnings before interest, taxes and amortisation (EBITA) in the customer services division in the first quarter in 2015 of US$11.1m. Additionally, the order backlog was reduced by US$102m at the end of the first quarter of 2015 as a consequence of the agreement.

Nigeria: A pozzalana cement pilot plant in Ota, Ogun State is to be commissioned following the installation of the plant. The plant is the first of its kind in Nigeria that can process pozzolana and it is being run by the Nigerian Building and Road Research Institute (NBBRI).

The NBBRI has coordinated with the Director of Building and Road Research in Ghana on the project through exchange programmes. Two pozzalana cement plants are being built in Nigeria, in Ota, Ogun and Bokkos, Plateau respectively.

Nigeria: Seven directors have resigned their appointments from the Board of Ashaka Cement with effect from 10 March 2015. Umaru Kwairanga (chairman), John William Stull (vice chairman), Sen. Muhammed A. Muhammed, Kolawole Babalola Jamodu, Abubakar Ali Gombe, Lamido Abba Tukur and Hamra Imam have all resigned.

The board has appointed Mallam Suleiman Yahyah as the new board chairman with effect from 12 March 2015. They also appointed three as non-executive directors, Anders Kristiansson, Edith Onwuchekwa and Rabiu Abdullahi Umar, with effect from 12 March 2015.

Nigeria: Lafarge Africa's Ashaka Cement's 2014 pre-tax profit rose by 84.5% year-on-year to US$26m. However, its revenue declined by 2.58% year-on-year to US$106m.