Displaying items by tag: Nigeria
Boko Haram raid targets Lafarge cement plant in Nigeria
05 November 2014Nigeria: Suspected Boko Haram fighters have stolen dynamite and pick-up trucks from the Lafarge Ashaka Plant in Nigeria after robbing a bank. The attack in Ashaka, Gombe State on 4 November 2014 came after the Islamists robbed a bank, blew up a police station and set fire to a political party office 20km away in Nafada. Unlike previous attacks in recent months in the far northeast of the country, the militants did not attempt to hold the town.
"The factory was the target of the intruders. There were no injuries. There was no damage in the factory.... The situation is still calm and everything is back to normal," said Bruno Lafont, CEO of Lafarge. French diplomats in Nigeria said that none of its nationals were taken in the raid. Bruno Lafont said that operations had not been affected.
According to witnesses the gunmen stormed the site in the afternoon, looted explosives and demanded to be taken to where expatriate managers, French nationals, were staying. However the plant was mostly empty following the raid in Nafada, which left at least 10 dead.
The Lafarge Ashaka cement plant, set up in 1974, is the largest cement works in northern Nigeria and employs about 500 people, including an unspecified number of expatriates.
Dangote Cement seeks licence for 75MW power plant in Tanzania
05 November 2014Tanzania: Dangote Cement has applied for a licence to build a 75MW coal-fired plant in Tanzania that would power a US$500m cement plant now under construction, Tanzania's energy watchdog has reported.
"Dangote Industries applied for a 75MW electricity generation licence to build, own and operate a coal-based captive power plant adjacent to its cement plant," the state-run Energy and Water Utilities Regulatory Authority (EWURA) said. All the generated electricity will be used to run the plant and associated utilities.
"Any interruption in power supply or unstable voltage/frequency causes extensive damage to the refractory and also to the rotary kiln parts. Refractory failures cause production shutdowns varying from 15 to 30 days and unscheduled use of costly imported refractory bricks," the regulator added.
The Dangote cement plant in southern Tanzania is scheduled to be commissioned in the second half of 2015. With a capacity of 3Mt/yr it will supply Tanzania's domestic market and export to landlocked nations in the region.
It won't surprise anyone to know that cement sales have fallen in the west African countries that are suffering from the on-going Ebola outbreak. However the scale may yet be instructive for this and other crises that may affect the cement industry in the future. The local data that follows mostly comes from a report by the World Bank published in early October 2014 looking at short and medium term economic impacts, as well as Global Cement research conducted towards the Global Cement Directory 2015.
All three of the principal countries involved – Liberia, Sierra Leone and Guinea – have low gross domestic products (GDP). They do not have cement kilns but they do have grinding plants and cement import infrastructure run by both local and international firms. They also lack readily accessible limestone deposits. In the short term (in 2014) a health crisis is expected to hit manufacturing through transportation and market disruptions stemming from both direct health implications and behavioural responses.
Liberia's cement sales fell by 60% in the third quarter of 2014, a drop the World Bank attributed to causes other than the rainy season. Quarterly cement sales more than tripled in 2013 from around 10,000t to over 25,000t marking the commissioning of a new mill at the Liberia Cement Corporation (HeidelbergCement) grinding plant. Dangote also has an import terminal in the country and is building its own grinding plant. The drop in cement sales since June 2014 has nearly undone all this production growth.
Neighbouring Sierra Leone has seen a steady fall in weekly cement sales since June 2014. Similar to Liberia, it has a HeidelbergCement-run grinding plant with Dangote planning expansion soon. Guinea, which had about a sixth of the notified cases of Ebola in mid-October 2014, has seen its cement imports fall by 50% in the year so far compared to 2013.
Before readers become too depressed though, it should be considered that Nigeria has been declared Ebola free by the World Health Organisation after six weeks with no new cases. It may have been relatively expensive to contain Ebola through public health measures but the alternatives for the regional economies could have been worse. More cases are expected to arrive in Nigeria but the country has shown that Ebola can be stopped.
Immediate cement operators threatened by the epidemic include HeidelbergCement with its five grinding plants in west Africa. How an uncontrolled or high case Ebola epidemic affects Dangote's expansion plans in its 'backyard' will also be hard to predict. West Africa is the obvious place for the Nigerian cement giant to build itself up before it tackles other markets in sub-Saharan Africa that have stronger competition like South Africa's PPC. Take this market stability away and Dangote faces a direct economic threat to its growth beyond the humanitarian horror of the epidemic. What also has implications for the cement industry in Senegal, the second biggest cement producer in the region, where there are two integrated plants.
The World Bank report concludes that Liberia, Sierra Leone and Guinea could lose US$129m in GDP in a low case scenario or up to US$815m in a high case scenario. To give this some context, Sierra Leone's GDP was US$2.7bn in 2013. In a high case situation it could lose US$439m or an amount equivalent to 16% of its GDP in 2013. If and when the fight against Ebola turns, this still leaves a severe economic recession for the survivors in what is already one of the poorest countries in Africa. Cement, one of the indicators of a country's economic and industrial development, is intricately bound up in this.
Angola quietly builds up the pace in cement production
15 October 2014Angola made similar noises to Nigeria this week when one of its government ministers declared that the country was self-sufficient in terms of cement production. The comments came from Industry minister Bernarda Martins at a visit by the Angolan president to the China International Fund Luanda Cement plant. Martins' words echoed those made by Joseph Makoju, Chairman of the Cement Manufacturing Association of Nigeria, who declared that his country was making more cement than it consumed back in 2012.
Claims of self-sufficiency are all about context. A major or fast growing economy such as Nigeria declaring self-sufficiency in cement could suggest a potential paradigm shift. A smaller economy might simply have risen from a low production base to a slightly higher one with little consequence. So what does this mean for Angola?
The southern African country has a population far smaller than Nigeria at 19 million. Yet, its gross domestic product (GDP) per capita, in purchasing power parity terms, was estimated to be US$6484 in 2014 by the International Monetary Fund, a figure slightly higher than Nigeria's. In nominal terms its GDP was the fifth biggest in Africa in 2013.
Global Cement Directory 2015 research (to be published in late 2014) gives Angola's four integrated cement plants with a total cement production capacity of just under 6Mt/yr. The plant the politicians have just visited has reportedly just increased its clinker capacity to 3.6Mt/yr and another 0.6Mt/yr capacity is planned to join the market when an InterCement plant expands in 2017. Together this places the country's production at around 8Mt/yr. Domestic cement demand was placed at 6.5Mt/yr in early 2014 giving the country a cement consumption of just under 350kg/capita.
Transnational African bank Ecobank declared than Angola was becoming Central Africa's cement production hub in a commodities report in July 2014. Out of the sub-Saharan countries it has become the fourth largest producer after Nigeria, South Africa and Ethiopia and the third largest consumer after Nigeria and South Africa. Angola too has restricted cement imports, like Nigeria. In 2014 the Ministry of the Economy, Industry, Commerce and Construction implemented a stoppage on imports in a phased manner under the auspices of its local cement association, the Association of Industrial Cement of Angola.
Where Angola is different to Nigeria is in the composition of the companies that produce its cement. There is no large local presence to rival Nigeria's Dangote. The former colonial links are there with a plant operated by Brazil's InterCement, who inheritied it from Portuguese company Cimpor. Of the rest, Chinese and South Korean investors figure prominently.
Finally, it is also worth noting that Angola has none of the main sub-Saharan players present including Dangote, PPC or Lafarge Africa. Roughly half-way between the African cement powerhouses of Nigeria and South Africa and with a handy coastline, Angola deserves further attention.
Dangote Cement to pay compensation for murder
10 October 2014Nigeria: Following the intervention of the National Human Rights Commission (NHRC), the management of Dangote Cement plant, Gboko Local Government Area, Benue State, has agreed to pay compensation to the families of seven dead and numerous injured victims who were attacked by army officers attached to the cement plant on 18 March 2014, following a dispute between one youth and a guard.
Chairman of the Investigations Panel, Tony Ojukwu, said that the investigations had concluded that the incident infringed on the rights of the youths. He confirmed that the management of the plant wrote a letter of satisfaction to the commission accepting to pay the compensation as agreed. Ojukwu disclosed that the victims 'have not given their consent that the amount given to them as compensation be revealed.'
Court stops SON from implementing cement standards
26 September 2014Nigeria: The Federal High Court of Calabar has stopped the Standards Organisation of Nigeria (SON) from implementing the proposed cement standards it introduced recently. The ruling was issued by Justice Emmanuel Obile in a suit that was instituted by the United Cement Company of Nigeria Limited (UniCem) against the Attorney General of the Federation, Minister of Industry, Trade and Investment and the SON.
The judge urged the SON to ensure that it maintains the status quo over the proposed cement standardisation and warned it to halt action on the implementation of the controversial standardisation pending the hearing and determination of the substantive suit.
The process of reviewing the cement standard by the SON is surrounded in controversy as professional bodies like Council for the Regulation of Engineering in Nigeria (COREN), the Nigerian Society of Engineers (NSE), cement manufacturers among other stakeholders have cried foul over the process. The matter has been adjourned to 17 November 2014 to enable the SON to file its preliminary objection, which the court agreed would be taken together with the other pending applications.
The SON begins full implementation of cement standardisation policy
25 September 2014Nigeria: The Standards Organisation of Nigeria (SON) has begun to implement the cement standardisation and reclassification scheme with a zonal stakeholders' forum on blocks and allied products in the south west. The SON has also received directives from the Federal Ministry of Industry Trade and Investment to immediately commence the full enforcement of the policy across all segments of the cement and allied products sector.
The federal government's regulator of quality and standards began with the official unveiling of the new packaging and labelling model for the three different classes of cement in the nation's market, with clear labelling and colour coding to help stakeholders easily distinguish between 32.5, 42.5 and 52.5 grade cements in order to prevent misuse.
The minister of States for Industry, Trade and Investment, Samuel Ortom, expressed delight over the move by SON to firm up the regulations for building materials in the country. Ortom endorsed the decision to contrive the new cement packaging and labelling in line with the recently-approved Nigerian Industrial Standard for Cement, stressing that these steps would go a long way to enhance the building and construction industries.
"One key focus of standardisation all over the world is continual improvement aimed at customer satisfaction. This is only attainable through the diligent implementation of specifications for products and services as prescribed in the relevant approved standards," said Ortom. "Standards in themselves are dynamic in that they undergo reviews as necessary, towards ensuring continual improvement in products quality."
Dubai’s ICD buys US$300m stake in Nigeria’s Dangote Cement
09 September 2014Nigeria/Dubai: The Investment Corp of Dubai (ICD) has bought a 1.4% stake in Nigeria's Dangote Cement for US$300m. Dangote Cement spokesman, Carl Franklin, confirmed the sale, but provided no further details.
UniCem ground breaking event attended by Nigerian President
04 September 2014Nigeria: The Nigerian President Goodluck Jonathan has spoken at the ground breaking ceremony of a new line at the 2.5Mt/yr Akamkpa cement plant, owned by United Cement Company of Nigeria (UniCem) in Cross River State. The company, which already operates a 2.5Mt/yr line on the same site, is the third largest producer of cement in Nigeria and aims to further secure this position when the new line comes online in 2016.
President Jonathan used the event to highlight the rapid development of the Nigerian cement industry. "In 2002 the Federal Government of Nigeria formulated the Backward Integration Policy (BIP) in the cement industry with a view to making Nigeria a self-sufficient cement producer," he said. "Within a decade, we have witnessed phenomenal growth in the industry from 2Mt/yr of cement produced locally in Nigeria to 28Mt/yr of installed capacity in 2013."
"Today's event by UniCem is yet another milestone for the company, the industry and the nation at large as this event brings additional 2.5Mt/yr to the nation's existing capacity," he continued. "I am particularly impressed that after five years of inauguration of the first line, we are gathered here today to break ground for the additional 2.5Mt/yr cement line."
Dangote breaks cover
20 August 2014Of the five African cement news stories in this edition of Global Cement Weekly, three concern the actions of Nigerian cement giant Dangote Cement. This week it has announced a new captive power plant in Nigeria and the fact that Sephaku Cement, which is owned by Dangote to the tune of 64%, is now in a position to produce cement from its Aganang plant in South Africa. These two items are fairly typical of the type of announcement that Dangote makes in the African market, and the high frequency with which it makes them. It is the third story, of course, which is unusual.
We have heard, for a couple of years now, that Dangote has designs on becoming a pan-African cement giant. Certainly it is the pre-eminent producer in west Africa, with its influence rapidly spreading to the east, north west and south of this vast continent. Few others, (but perhaps South Africa's PPC), can claim to have such influence and, unopposed, there seems no limit to Dangote's ambitions.
This week we heard just how bold those ambitions are. For the first time Africa's No. 1 cement producer has said that it wants to break out of Africa and enter new markets. No longer satisfied with operating at home, a company release has identified the Middle East and Latin America as potential hunting grounds, either for new capacity or acquisitions. The proposed list of LafargeHolcim cast-offs, which includes few assets in either region (LINK), will also have received significant attention in the Dangote boardroom.
The selection of the Middle East and Latin America, however, is not accidental. The Middle East is a high growth area and provides a platform for possible 'pincer-movement' expansion into more impenetrable markets in central Africa like Chad and (South) Sudan. The Middle East also means proximity to India. Dangote may also want to dampen the influence that Indian, Pakistani and Iranian exports have in the region. Potential tie-ups with Dangote's growing operations in east Africa are clear.
The selection of Latin America, on the face of it at least, is less obvious. There are numerous strong and growing local and regional producers. Not least of these is Colombia's Cementos Argos, which has increased its influence in the USA through strategic acquisitions. There are also numerous domestic large Brazilian producers but Dangote may feel like there is room for more to joint the party. Cade, the Brazilian competition authority, has certainly agreed that competition could be improved in Brazil following its recent investigations. Could Brazil be a prime target?
Wherever Dangote decides to play its first non-African card, it will be a major step for the company and African cement producers. How long until we see the first African-owned cement plant on another continent?