Displaying items by tag: Nigeria

World: Dangote Cement is preparing to expand its cement production plants beyond the continent of Africa to the Middle East and Latin American countries. The company is optimistic that the planned investment will propel it to be ranked among the top 10 global cement manufacturers.

"We are currently operating in 14 African countries and we shall soon move across the continent to other continents," said Sunday Adondua, deputy general manager of production at the Ibese plant in Nigeria. "By the time we have consolidated our hold in the African markets, we shall go beyond the borders. Specifically, we are targeting the Middle East and Latin America. The idea is to be a world leader in cement production. We are also planning to start a plant in Mauritania and we are also planning projects in Gabon."

The Dangote Ibese plant in Nigeria has undergone recent upgrades, including the construction of new production lines. Lines 3 and 4 will be commissioned by the end of 2014, which will double the plant's cement production capacity to 12Mt/yr. Line 3 is complete and line 4 is 96% complete. As a result of the works, Dangote's three Nigerian cement plants in Ibese, Obajana and Gboko, will have a combined production capacity of 29.2Mt/yr.

Nigeria: Dangote Group has invested US$250m in a coal-based power plant in its effort to provide an alternative source of power for is plants across the country to reduce the cost and difficulty accessing electricity.

Dangote Cement's Group CEO, Devakumar Edwin, said that the initiative will help the group in running its businesses in all parts of the country. He noted that the group has installed a 54MW coal power plant in Gboko, Benue State and is currently working towards installations at Ibeshe in Ogun state and Obajana in Kogi State. Edwin, who said that the group was currently importing coal from South Africa, revealed that it has started exploring coal opportunities in Nigeria, especially in Enugu State. It has also established a separate division for coal exploration.

Edwin noted that inadequate power supply due to Nigeria's low supply of gas has affected Dangote's cement production, while the cost aspect has also impacted on the economy and increased cost for consumers.

"In this country, the major issue is power," said Edwin. "Any economy will climb to double digits, once there is power at the right price. With affordable power people will produce products locally, will gravitate to the private sector, leading to the creation of a middle class and more employment in the country."

Nigeria: With a national production capacity at over 28Mt/yr, which far outstrips national demand of 20Mt/yr, Nigeria looks set to effectively end cement imports by 2017, according to UniCem's managing director, Olivier Lenoir. This is coming on the back of on-going strong national production capacity expansion by virtually all of the major cement producers operating in the country. By 2016, Dangote Cement will have increased its production to 50Mt/yr, Lafarge 15Mt/yr and UniCem to 5Mt/yr.

Nigeria: The Standards Organisation of Nigeria (SON) has issued a 60-day ultimatum to cement manufacturers on product labelling and traceability requirements. Primarily, the new guidelines mandate the manufacturers to indicate on product bags the manufacturing and expiry dates, product application information as well as the batch numbers of the products.

Cement manufacturers, including Dangote Cement, Lafarge Nigeria, Unicem, Ibeto Cement, Ashaka Cement and Sokoto Cement, had appealed to the agency to review its initially-proposed 30-day deadline to enable them to implement the changes in their processes. The move, which is expected to enhance traceability in case of product failures, also places a responsibility on cement manufacturers to ensure that their products meet required guidelines and health and safety requirements.

Nigerian cement producers are also expected to submit their advertisements and commercials for pre-approval by the SON before they are sent to the media, while processes should be initiated to ensure that products are properly stored by distributors and retailers to avoid compromising product integrity.

Nigeria: The board of directors of Ashaka Cement plc, with the support of parent company Lafarge, has agreed to fast track the expansion of its US$617m cement plant in Ashaka, Gombe State. The move became imperative in order to guarantee the future of Ashaka Cement, to enhance job creation and to deliver economic and social welfare to the immediate communities. Chairman of the board of Ashaka Cement, Alhaji Umaru Kwairanga, confirmed the developments.

"Having secured sufficient limestone and coal reserves to support the existing plant as well as the new plant, the contracts have been signed with the main equipment and engineering suppliers," said Kwairanga. He added that credit facility lines of US$308m had been secured and signed in addition to internally generated cash flows to support the expansion project.

"Ashaka Cement has operated in harmony with all of its neighbouring communities to the mutual benefit of both parties," said Kwairanga. "In the last three years alone the company has spent US$2.47m on community-related projects and there is the opportunity for the company to do more as the partnership thrives."

Nigeria: The controversy among cement manufacturers and the Standards Organisation of Nigeria (SON) over the application of various cement grades for building and construction may have waned as block makers in the northern part of Nigeria have started to comply with the SON directive on the classification of cement grades and their uses.

Northern Nigerian block-makers have announced that they have complied with the SON directive as most of them now use 42.5R grade cement to produce concrete blocks. Hamza Gambo, chairman of Kaduna State Blocks and Concrete Makers Association, said that all of his members have complied with the SON directive, adding that the directive was in the national interest. He stated that most block-makers in the north now use Dangote 3X cement, which is the only 42.5R grade cement that meets the SON specification.

"We've been using the new improved cement for the past two months," said Gambo, who owns concrete block plants across Nigeria. He added that the Kaduna State Blocks and Concrete Makers Association would deal with members who refuse to comply with the SON cement grade standards according to the association's constitution.

Nigeria: In a bid to tackle 're-bagging,' which is one of the biggest threats in the cement industry in Nigeria, Dangote Cement has launched an all-out attack on perpetrators.

In the cement industry 're-bagging' refers to the emptying of the original cement bag and refilling with a different adulterated product or commodity. Another common method is to buy cement from shops, grind it, mix it with sand and then put the adulterated commodity into a bag belonging to a reputable cement manufacturer.

Often cement makers end up bearing the brunt of customer dissatisfaction, as they believe the product is from the original source. In the case of damage associated with the product, consumers often attribute it to the firm whose bag has been used for the product.

"There are different forms of what these people are doing," said Devakumar V G Edwin, Dangote's managing director and CEO. "We have an extensive team that is spearheaded by a former police commissioner exclusively on this." According to Edwin, his team is working hard to halt bag thefts by cement plant workers, which facilitate the re-bagging business.

"We have even heard people say that they sell Dangote Cement for US$5.52 – 6.13/bag," said Edwin. "What happens is that our customers often call us and inform us of the situation. Sometimes, they tell us that we are cheating them because of the price someone tells them elsewhere. Once we get the information, we launch into action."

Nigeria: A Federal High Court has rejected an application by Lafarge Cement WAPCO to restrain the Standard Organisation of Nigeria (SON) from enforcing the newly introduced cement grade restrictions. Justice Ahmed Mohammed ruled that making such an order would prejudice its order compelling the defendants to appear in court to show cause why they should not be restrained from enforcing the new cement grade.

The defendants in the suit are the SON and the minster of Trade and Investment, Segun Aganga. The counsel for the defendants had opposed Lafarge's application for an order asking parties to maintain the status quo. They argued that the court could not make such an order when its jurisdiction to entertain the suit was being challenged.

The creation of Lafarge Africa, the clearance of the Cemex West acquisition by Holcim in Germany and the sale of Lafarge's assets in Ecuador all hint at the scale of business that LafargeHolcim will command when it comes into existence. Despite the media saturation of coverage on the merger the implications in developing markets are still worthwhile exploring, especially in Latin American and Africa.

In sub-Saharan Africa, Lafarge is merging its cement companies in Nigeria and South Africa to create Lafarge Africa. Analysts Exotix have described the move as, 'the birth of a leading player on a continental scale'. Indeed, if Lafarge wanted to grow Lafarge Africa to encompass its many other African cement producing subsidiaries it could hold at least 17 integrated cement plants (including plants in north Africa) with a cement production capacity of at least 40Mt/yr in 10 countries and infrastructure in others. That puts it head-to-head with Dangote's plans to meet 40Mt/yr by the end of 2014 through its many expansion projects. Following these two market leaders would come South African-based cement producer PPC with its expansion plans around the continent.

Meanwhile across the Atlantic in Latin America the Lafarge-Holcim merger threatens Cemex. Unlike in Africa where Lafarge has a ubiquitous but disparate presence, Lafarge and Holcim's cement assets are more evenly scattered around the Caribbean, Central and South America. In terms of cement production capacity Cemex and Lafarge-Holcim will both have around 30Mt/yr, with Cemex just in front. The next biggest cement producers in Latin America will be Votorantim (present mainly in Brazil) with just over 20Mt/yr and Cementos Argos (Columbia) with about the same. This includes some new acquisitions in the United States for the growing Columbian producer. In Ecuador Lafarge and Holcim held over 50% of the market share, hence the sale by Lafarge of its assets to Union Andina de Cementos for US$553m.

Depending on how well the merger integrates the two companies, corals the various subsidiaries and implements strategic thinking the merger could just create business as usual with little disruption to the existing order. Yet in both continents the merger has the opportunity to shake up and reinvigorate the cement markets as existing players suddenly discover serious new competition and react accordingly.

Africa has a population of 1.1bn and it had a Gross Domestic Product (GDP) of US$2320/capita in 2013. South America had a population of 359m in 2010 and a GDP of US$8929/capita. This compares to US$27,250/capita in Europe and US$54,152/capita in the US. The economic development potential for each continent is humongous. Post-merger, LafargeHolcim will be first or second in line for some of this potential in Latin America and Africa.

Nigeria: The management of Lafarge Nigeria has urged stakeholders in the cement sector to cooperate on the need for proper product labelling by manufacturers.

The company's general manager (Industrial Performance), Lanre Opakunle, said that the step was necessary to address the issue of incorrect cement application in the Nigeria. Opakunle said that there is a need to review how cement products are labelled in order to educate end users on the basic steps necessary for the correct application and results.

"We discovered that labelling is not adequate and we made some proposals," said Opakunle. "However, those proposals have not been taken on board. We will keep making efforts to see that they are." Opakunle added that correct labelling would help to ensure that people have the right information at their disposal.

"Lafarge is the only cement manufacturer in the market that puts the uses and specifications of cement on their bags," said Opakunle. "In our technical submission to SON we said that we want to do more than that; we want to put it in a way that the layman can understand." He noted that issues of cement application should not dwell on the cement grades; rather it should be about knowing the right mix.

"The most widely used individual application of cement in the world is 32.5 grade," said Opakunle. "It is important that the user understands how to use whatever grade of cement that is available on the shelf because of certain risks which may maybe associated with these grades, whether it is 32.5 or 42.5 grade. The information should be properly labelled on the bags."