Displaying items by tag: Kogi State

Nigeria: The Mangal Cement plant in Iluagba, Kogi State has successfully produced its first bag of cement. The plant is capable of producing 6000t/day of cement. The US$1.5bn facility aims to transform the local cement industry and will create 10,000 new direct and indirect jobs, Dateline Nigeria has reported. Mangal Industries has partnered with China-based Sinoma International Engineering for the plant’s construction, with a reported cost of US$600m.

Finland-based Wärtsilä has won a 10-year operations and maintenance agreement for a 50MW captive power plant to power the facility. Initially, the plant will use liquid fuel, but a pipeline will be constructed to allow it to use natural gas.

Chair Alhaji Dahiru Mangal said “This factory will employ the latest technology and adhere to the highest environmental standards. It is part of our ambitious programme to address Nigeria’s infrastructure and housing deficits, while demonstrating our confidence in the region’s economic outlook.”

Dangote Cement’s Obajana plant has been the focus of an argument between the cement producer and the Kogi State Government (KSG) in recent weeks. The integrated plant was forced to close in early October 2022 and then reopened in mid-October 2022 following an order by the Federal Government. The dispute then entered a legal phase, with the state government taking Dangote Cement to court. The case is ongoing.

The current stage of the disagreement dates back to late August 2022 when the Kogi State House of Assembly reportedly set up a committee to investigate the shares that the state owned in Dangote Cement and other organisations as part of an initiative to examine tax revenue from mining companies. By the end of September 2022 this had turned into a discussion about how exactly Dangote Cement had originally acquired its shares in the Obajana cement plant in Kogi state as well as how much tax it was paying. In early October 2022 the local government ordered the closure of the plant. Events then turned nasty as local vigilantes attacked the plant and hurt some of its staff. In the general unrest that followed the Kogi State House of Assembly was destroyed in a fire. The plant partially reopened fairly quickly and then fully once the Federal Government intervened. Legal action was then started at the Kogi High Court.

Unusually for this kind of disagreement both sides have published detailed information on their respective arguments. Dangote Cement’s parent company Dangote Industries outlined how it originally came to build and own the Obajana cement plant. In short, it signed deals in 2002 and 2003 to buy a 100% stake in Obajana Cement from the KSG, before the plant was built, with the proviso that the state could later buy a 5% share within five years. Dangote Industries then independently financed and built the plant and Obajana Cement later became Dangote Cement. Crucially, according to Dangote Industries, KSG never bought its 5% share. On the opposing side, the KSG has published what it says is the original contract and annexes that it signed with Dangote Industries. This agrees with some of what Dangote Industries has said, especially the part about the option to buy a 5% stake within five years. However, according to reports in the local press, KSG is attempting to persuade the judiciary to cancel the original contract on the grounds that it lacked clear consideration of what should pass from the state to Dangote Industries in return for giving the latter full ownership of Obajana Cement. In other words, the KSG is querying whether the contract is valid given that it received apparently nothing for giving a company away.

The Obajana cement plant was later built and it became operational in 2007. Today it is the largest cement plant in Nigeria and one of the largest in Africa. It produces around a third of the country’s cement and this is why its closure earlier in October 2022 became a national issue. Since the early 2000s Dangote Cement has become the biggest cement producer in Sub-Saharan Africa. It is both a success story for the region and the world.

There may be issues with the perceived or actual contribution Dangote Cement is making locally in Kogi State. These are the kinds of issues that both companies and governments contend with continually. Companies consider where it is cost effective to place investments and governments try to entice them. It is possible that the KSG gave Obajana Cement to Dangote Industries in what it retrospectively considers is a poor deal. It is also possible that Dangote Cement has not paid sufficient tax, although it strongly denies this, and the KSG seems to have moved on from this line of attack. What may be the bigger issue here is if Dangote Cement is perceived to have not paid its dues in Kogi State. However, it seems odd that the KSG would suddenly decide to go after Dangote Industries nearly 20 years after agreeing to the deal. It also seems strange that no lawyer for either party flagged the consideration issue at the time. Thankfully calmness has now prevailed in the state and the cement plant remains open. It is for the courts to decide the validity of the original contract between Dangote Industries and the KSG.

Nigeria: The government of Kogi State has filed a lawsuit against Dangote Cement's parent company Dangote Industries. The state government claims no payment was received for Dangote Cement's acquisition of the Obajana cement plant upon its privatisation in 2002, according to the Advocate newspaper. If the legal case is successful it could void the cement producer’s contract with the state government.

The National Security Council ordered the reopening of the Obajana cement plant in the national interest on 14 October 2022, following its closure by order of the Kogi State Assembly.

Nigeria: The government of Kogi State ordered Dangote Cement to shut down its Obajana cement plant within 48 hours on 13 October 2022. Kogi State Governor Yahaya Bello also ordered the release of impounded Dangote Cement trucks across the state.

Bello thanked Kogi residents for their “resoluteness in the ownership impasse between Dangote Group and the state government.” He added, "While the state government recognises the right of the citizens to peaceful protest, as we witnessed across the state yesterday, we urge people to remain civil and law abiding and to give room for constitutionalism. Breakdown of law and order will not be in the interest of anyone."

Lorry drivers blocked the Abuja - Lokoja road in protest against the closure on 14 October 2022, according to the Advocate newspaper. Meanwhile, a gang has raided the plant, destroying property and shot firearms at the 27 employees who remained on site.

Nigeria: Dangote Cement has denied the Kogi State government's purported accusation that it sponsored an arson attack on the state legislative assembly complex. The Punch newspaper has reported that a fire destroyed the Kogi State House of Assembly on the night of 10 October 2022. Dangote Cement helped to extinguish the fire at 8AM on 11 October 2022, sending one of its fire engines to the scene of the disaster. The state government published a statement entitled 'Obajana: desperation sets in as imported hoodlums burn down Kogi Assembly,' in which it allegedly suggests that Dangote Cement had some involvement in the fire's outbreak ‘in an attempt to possibly destroy evidence relating to the ownership tussle between the Kogi State government and Dangote Group over the Obajana Cement Company.’

Dangote Cement's chief branding and communications officer Tony Chiejina said “As a socially responsible corporate entity, we refute this allegation and condemn this unprofessional and irresponsible attempt to smear our image before local and international investors, and thus erode our brand value. Dangote Group would never stoop so low as to sponsor thugs to destroy any property, whether it belonged to the government or an individual. This runs contrary to our business ethos and everything we stand for as a leading manufacturer with teeming customers and consumers across Nigeria and Africa. Our lawyers have been mandated to react appropriately to the damaging allegation from the Kogi State government within the full extent of the law." Chiejina concluded “We urge our stakeholders and the public to disregard such irresponsible and insane statements, as we ask all our stakeholders, namely shareholders, customers, suppliers, employees, and the entire community of Obajana and Kogi State at large, to remain calm while we follow the legitimate and lawful process to resolve this matter with the state government.”

Nigeria: The House of Assembly of the Nigerian parliament has ordered Dangote Cement to suspend its operations at the Obajana cement plant until the company presents 'credible evidence' of its acquisition of the plant from the government. The Premium Times newspaper has reported that the state and Dangote Cement concluded a deal for transfer of ownership of the plant in 2002. Kogi State Commissioner Kingsley Fanwo says that Dangote Cement has failed to show evidence of its payment for the asset.

Local people petitioned the state for an enquiry into the plant's legal status after it allegedly created industrial pollution 'bordering on' a hazard. Protestors have reportedly 'driven out' staff from the plant.