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CNEF battles CMAN to force down cement price

Emma Amaize
WARRI- THE Cement New Entrants Forum of Nigeria, CNEF, has launched a two-pronged campaign to force down the price of locally manufactured cement to N700 per 50 kg bag at retail shops by 2015, saying the Cement Manufacturers Association of Nigeria, CMAN, in collusion with some government officials, were ripping off Nigerians at the current factory gate price of N1, 300.

Chairman of CNEF, Prince David Iweta told Vanguard, that 95 per cent of the raw material, limestone, used in producing cement is obtained freely from the Nigerian soil, and if government extended the same support it was giving to CMAN to the new entrants to run their local cement plants, they would contribute about 12.2 million metric tones to the market and sell cement at a factory gate price of N500.

He said, “The new entrants with own land terminals will require 5 (five)  million tonnes ofcement License each issued by the Federal Government to cover up to 2015 to support their effort in building their own backward cement plants in line with government pronouncement. This is because the major manufacturers that are celebrated today have been granted and imported over 30 (thirty) million tonnes of cement each for longer period of 10 years that afforded them the opportunity to achieve the claimed huge investment in local cementproduction”.

Cement

His expressions, “We shall expose CMAN by revealing the cost of producing limestone, the cost of power, the cost of gypsum, and the cost of labour and overhead charges by sensitizing Nigerians by serious campaign with substantiated figures as to why they must not buy a bag ofcement above N700 per bag of locally manufactured cement. After all, limestone, which is 95 per cent content as raw material is freely obtained from our oil”.

Prince Iweta, who is the chief executive of Madewell Portland Cement, Sapele, Delta state, said that when  President Umaru Yar’Adua of  blessed memories  granted import licenses to new players in 2008,  thus setting a level playing field for all players in the cement industry,cement price was forced down price  from N2,000 to N1,400 per bag, and up till date, “it is still sending cold down the spines of so -called manufacturers, who are  trying to construct road blocks on the ways of new entrants that are determined in ensuring that cement price come down to as low as N500 per bag by 2015”.

Cabal

He disclosed that with the exit of Yar’Adua, relevant authorities in collusion with CMAN, issued fresh license for 2.5 million to selected cement manufacturers, excluding members of the CNEF, which led to the former  embarking on massive importation of cement by opening Letters of Credit for over 35 shiploads of cement in anticipation of cancellation of import license mid-year 2010.

According to him, “The license was allocated by issuing over 85% to CMAN members. Such that Dangote Cement Group got 895,000 metric tonnes (Manufacturer), Nigeria Flourmills (UNICEM) got 600,000 metric tonnes (Manufacturer), Bua Cement (Sokoto Cement) got 225,000 metric tonnes (Manufacturer), Lafarge Group/Atlas Cement (Elephant) got 160,000 metric tonnes (Manufacturer),  Eastern Bulkcem Company Limited (Nigercem) got 225,000 metric tonnes (Manufacturer), making a total of 2,125,000 metric tonnes sharing a mere 375,000 to Ibeto Cement  and Magen Roi Cement 150,000 metric tonnes as importers”.

“The Ministry erroneously did not consider Madewell Portland Cement with functional Land Terminal in Sapele, Delta State and Reagan Portland Cement with Land Terminals in Calabar, Cross River State both firms are sited in the South – South region. Gateway Portland cementwas also denied license.  These are investors that have invested in the cement industry each with over N2.5 billion in Land Terminal alone, which is the first step of the backward integration policy of the Federal Government of Nigeria”, he stated.

Poser

Prince Iweta asked, “Fellow Nigerians from the above figures, which group is flooding the market with imported cement, manufacturers or importers?

“The so- called manufacturers are the major importers of cement into this country from 1999 till date yet they are pointing accusing fingers to importers for unbridled importation of cement. The cement manufacturers are afraid of competition of the new entrants into the NigeriaCement Industry by embarking on cheap campaign with selfish purpose in mind”.

Collapse of buildings

Furthermore, he asserted, “We want to use this medium to extend a wake-up call on the Standard Organization of Nigeria (SON) to ascertain the quality and strength of the cementrolled out of local cement factories to avoid the collapse of buildings in Nigeria, such has happened in Abuja. The new entrants wish to correct the falsehood that have been going on in the national dailies for some time now by the so- called cement manufacturers known to be chronic importers from 1999 to date. Two major manufacturers alone import over 80% of the total cement import into this country. This information is verifiable from the Nigeria Customs and the Central Bank of Nigeria. If above is found to be true, who then is engaged in unbridled import of cement?

Self-sufficiency deception

He also debunked the claim by cement manufacturers that they have attained self sufficiency incement production. His words, “It has been reported in several newspapers recently thatcement manufacturers have attained self sufficiency in cement production for Nigeria by 2011. This is another misinformation toward deceiving the government and the good people of Nigeria by preventing government from allocating import permit to deserving cement import terminal owners to allow CMAN members alone import the large quantity of cement for which they have established Letters of Credit, thereby creating room for few players to exploit Nigerians with high price and inferior cement quality”.

“We are compelled to challenging the cement manufacturers to shut their foaming mouths to the press and be patriotic. How will a group feel that 150 million Nigerians will accept the story that Nigeria has attained self sufficiency in cement delivery when cement price is selling at N1,300 per bag of 50kg at the gates of local manufacturers instead of N500 which the same bag of cement is sold in China, Taiwan, Spain, Egypt, Iran, Turkey,  India, Japan, to mention a few Countries that have attained self sufficiency in cement production contrary to claims by Nigeria Cement Manufacturers supported by collaborators in government”, he added.

Manufacturers supply inferior cement

“Experienced has also revealed”, he stated, “that current local manufacturers not only supply inferior cement quality when compared to imported cement, some manufacturers/importers make arrangements with foreign manufacturers to supply them with cement produced with 75% limestone, 20% slag waste of steel factories and 5% gypsum, which is cheaper to cementproduced with 95% limestone content and 5% gypsum, which is of better quality and strength. This is to earn them huge profit because Nigeria undermines quality because of their brand house-hold names.

“This group in producing their cement locally, they reduce the gypsum content below 5% recommended standard by the British Standard Specification (BSS 1972) to earn more profit at the detriment of innocent Nigerians.  This is because gypsum is the most expensive raw material in production of cement.

“It is still fresh in the minds of Nigerians what Dr. Iyochia Ayu went through when he tried to protect the investing rights of his people when the Federal Government of Nigeria was to sell its own share of the cement factory in his state, Benue Cement Company (BCC).  It has just been brought to the notice of the new entrants that the Federal Government of Nigeria has concluded sales of its equity holding in the Onigboro Cement Company in Republic of Benin to a cementmanufacturer in Nigeria without advertising or involving all players in the industry in Nigeria but sold directly to one company.  The danger in this deal is that the quantity of cement share from their daily production will find its way and dumped in the Nigeria market by way of import by land, no duty paid owing to ECOWAS membership. Again this is by a manufacturer that is one of those complaining against import of cement.

“The cement manufacturers have claimed that there are unsold inventory at their various storage facilities in form of bagged cement and clinkers and valued N45 billion, this is a big lie.  The same group alleged that the problem is caused by unbridled cement import which is their handiwork from above analysis.

‘Big joke’

“Cement Manufacturers boasted about their readiness to export their products to other Africa States, which they know is another big joke because their product cannot sell in other African Countries for the simple reason that the retail price of 50kg bag of cement in Ghana is N1, 100, N900 in Liberia, N800 in Cameroon, N800 in Democratic Republic of Congo (DRC), all these prices are for imported cement into these countries.  Should they try what they boasted, their business empire will collapse over night. One more reason why they will not consider export is because they are used to abnormal profit by exploiting Nigerians with over pricing”, he said.

Prince Iweta made it abundantly clear that the entire members of the new entrants were committed to producing cement using local limestone because it is far cheaper to producecement locally compared to imported cement and its associated import challenges, but CMAN members were not happy with this laudable efforts of late President Musa Yar’Adua of encouraging new entrants into the industry.

“The reason for unsold stock by some crying members of CMAN is as a result of their monopoly/duopoly exploitative intentions by embarking  on over ambitious Cementmanufacturing projects with a view to keeping others away and selling the product at high price.

“The same group has infiltrated some banks with specific instructions not to lend to competitors in the industry. Do the rich cry? It is unfortunate that the Ministry of Commerce and Industry is taking side with a section of same industry instead of playing a neutral fatherly role of ensuring sustainable growth in the construction industry of this country toward 2020.


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