Displaying items by tag: Nigeria
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.
Dangote Cement posts US$200m profit for Q1
16 May 2012Nigeria: Dangote Cement has reported a pre-tax profit of US$200m for the first quarter of 2012, an increase of 8.9% compared to the US$173m recorded for the same period in 2011.
Analysis of the Nigerian producer's unaudited financial results indicated that its operating profits rose by 13.7% to US$200m reflecting the higher proportion of locally manufactured cement compared to US$176m in 2011. Gross profit for the group was US$231m for the quarter compared to US$182m in 2011. The group achieved strong growth in revenue and profits in the first quarter, with revenues rising from US$345m to US$405m, an increase of 17.6%.
Too much cement in Nigeria?
25 April 2012Nigeria: 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.
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.
President opens Dangote's 6Mt/yr Ibese plant
10 February 2012Nigeria: 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.'
Nigerian cement prices rise by 25%
05 January 2012Nigeria: 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.
Cement key when oil runs out
23 December 2011Nigeria: 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.
Dangote to fire up 6Mt/yr plant, expects exports to follow in 2012
15 November 2011Nigeria: 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 sets up Cement Technology Institute
01 September 2011Nigeria: 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.
20 dead in cement plant carnage
24 August 2011Nigeria: 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.