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Iweta faults Dangote, urges FG to peg cement price at N1,000 per bag

By Emma Amaize
WARRI—CHAIRMAN /Chief Executive Officer (CEO) of Made Well Portland Cement, Sapele, Delta State, Mr. David Iweta, has said the orchestrated plan by some monopolist cement manufacturers in the country to make the Federal Government ban importation of cement was counter-productive and deceptive.

He noted that the country’s current total cement demand was 18-20 million metric tonnes per year, whereas its present supply capacity is not more than 6.5 million metric tonnes.

cement
Iweta, who is also the chairman of Sapele Chamber of Commerce, Industry, Mines and Agriculture, in an exclusive interview with Vanguard, suggested the government should even peg the price of cement at N1, 000 per bag, wondering why cement manufacturers would rake in huge profit and decline to invest part of their profit in the expansion of the industry.

Some cement manufacturers recently petitioned the Presidency, alleging that the Ministry of Commerce had opened the gate for the importation of the product into the country, thus jeopardizing their investments.

The petition, spearheaded by Alhaji Aliko Dangote is already receiving the attention of President Umaru Yar’Adua, who had directed the Minister of Finance, Mr. Mansur Mukhtar, to look into the matter.

Iweta specifically asked the Federal Government to peg the price of cement at N600.00 per bag for manufacturers; N800, 00 for bulk terminal operators; and N1,000.00 per bag for imported bagged cement.

He said:  “The cry by few cement manufacturers is baseless, misleading, unpatriotic and counter- productive to the laudable objectives for the dividends of democracy enshrined in the housing provision and other infrastructural efforts of President, Alhaji Musa Yar’Adua.

“The few manufacturing plants in Nigeria have failed this country by their inability to meet the country’s cement demand, since their inception and acclaimed huge investment after many years of existence of production in Nigeria.”

He said it was wrong for a company that does not pay the cost of freight estimated at $65 per metric tonne (N480.00 per bag) at an exchange rate of N150.00 to US $1; the cost of import duty of 10 per cent of US $120 per metric tonne at N150.00 to US $1, which is N90.00 per bag; and the average cost of using private terminal operator services, about US $35 per metric tonne,  which is N260.00 per bag to deceive the government .

“The total cost paid on imported bagged cement which is not paid by cement local manufacturers is N480.00 + N90.00 +260.00 is N830.00 per bag.  This information is verifiable with Intels Nigeria Limited and Brawal Shipping Nigeria Limited that have enhanced draft of about 10 meters with good discharging equipment for direct delivery of imported bagged cement.

“Why would cement manufacturers deceive the government and people of Nigeria that cement importation should be banned when they are unable to meet the huge demand gap.   It would be a thing of joy if such manufacturers can demonstrate capacity to fill the gap.  This said group does not pay huge cost of N830.00 per bag which is paid on imported bagged cement.

“To put the record straight, the same criers were also granted bagged cement import licence,  which is well and above the three (3) million tonnes granted new entrants to the industry who, for Christ sake, should be allowed period of incubation.

“The same manufacturers have cement- bagging plants located on federal government’s Port Authority property,  which is forbidden by International Maritime Organisation (IMO) that such major manufacturing exercise should not be sited at a national port of any country, but solely to facilitate import and export of finished goods and services”, he asserted.

Iweta said if the present government of Nigeria had the interest of its citizens at heart, it should not allow the majority of its people to suffer in the hands of unpatriotic few.

He advised the federal government to allow  importation of three million Import Licence quantity of 50kg bagged cement by licence holders, by new entrants; abolish import licence regime for all bulk cement bagging plant (Terminal Operators) and ensure duty waiver on all forms of imported cement till 2015; abolish import licence on Gypsum imports.

He also implored the government to guarantee stable fixed special exchange rate not exceeding N100 to US$1 on imported cement; and direct payment of all port levies in Naira.

Iweta equally submitted to government approval for Mining Lease (Quarry) for cement backward integration developers within 90 days of submission of application; creation of special cement fund by federal government for building cement plants with interest not exceeding 7% with moratorium of 5 – 7 years with 15 – 25 years repaymen as well as reactivation of rail system to support movement of cement across the country.

He also suggested the establishment of Cement Research Institute or commission/agency; dredging of sea/river channels to Delta, Port Harcourt and Calabar Ports to allow for vessel maximum draft at ports to 12 meters; special energy rate for LPFO/HPFO and gas for manufacturers; and 10 – 15 years down the road.

He said recent ex-factory price would drop to about N400 – N500.00 per bag if the above were followed to logical conclusion.

“Competition should then go on by the players in the industry.  Cement is sold in West African and other African countries as stated above and, as such, same should happen in Nigeria.

“If after many years of setting up cement plants in Nigeria, these companies are merely distributing the huge profit exploited from Nigerians amongst themselves without ploughing back profit to support expansion programme, it’s a big fraud.

“There is no cement importer or terminal operator that is not interested in backward integration.  The profit in cement local manufacturing is so huge that all new entrants will be very willing to get involved if there is venture capital in this country for long time on capital intensive projects such as cement production.

“The era where few bodies are given special favours in certain sectors should be abolished by this government and allow a level playing field for all players in the cement industry.

“It is worthy of mention here that of the three million tonnes granted to the new entrants, not up to 20 per cent have been imported into the country so far due to logistics and blockage of funds from Nigerian banks by some monopolist-players.

“Be it known that countries that are major exporters of cement still allow importation of cement into their coastal region when they consider the cost of delivery by road to such areas being higher when compared to imports.
“We need to balance the economy of every decision we made and stop feeding government with misleading information that will spell doom for our economy”, he said.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.