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2012 first quarter deadline: Where is the cement?

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Apparently, the pronouncement made by the Federal Government, last year, on its plans to make Nigeria self-sufficient in cement production by the first quarter of 2012 has not been realised. The cost of cement in the country is still on the high side as the economy enters the second quarter.

Sunday Business on a visit to  some cement depots and retail outlets  in  Lagos and Ogun  States, gathered that a bag of cement now goes for between N1,900 and N2,000 depending on the location of purchase.  The current cement price regime  in the country despite government pronouncement is still very high compared to the initial price of N1,500 that the product was sold before the price hike that hit the industry in June 2011.

Courtesy of the hike, cement price assumed an alarming rate as a bag was sold for N2, 800 against the initial price of N1, 500. The intervention by government, giving a standing order to local manufacturers in the industry to increase their production capacity to crash down the price, brought about a slight decline in the price from N2,800 to N2,000.

Worried by the high cost of cement, President Goodluck Jonathan promised consumers that government was putting measures in place to make Nigeria self-sufficient in cement production by the first quarter of 2012, which has just elapsed with cement being sold for N2,000.

Jonathan, while evaluating the economy after 51 years of independence, last year, said, “We have enough raw materials to produce more than enough cement that we need in this country, but, because our infrastructure is weak in terms of roads, power, cement manufacturing outside Nigeria is cheaper. 

We must restrict the importation of cement to encourage our companies to produce and allow the companies that are producing cement to import the difference in terms of proportion. So, there is this fear of monopoly because those who are manufacturing the cement are those who are also importing.

“The assumption is that they can create scarcity so that they can make more money. The good news is that by the first quarter of next year, we will be talking about export of cement. Last week, I sent for the minister of transport to do something about out train network because the present design does not include the cement factories. Cement is very heavy and if you haul cement using trucks, the cost will still be prohibitive.”

When Sunday Business visited retail outlets in various locations, the question many people were asking  was, When will Nigeria be self-sufficient in cement production? While many consumers and managers of block industries attributed the failure by government to meet the deadline to  insecurity challenge in the country, local manufacturers and importers said they are increasing capacity to meet with the increasing demand in the market.

Government should provide infrastructure and conducive environment for local manufacturers to operate- National president, Nigerian Association of Chambers of Commerce and Industry Mines and Agriculture (NACCIMA), Dr. Herbert Ademola Ajayi. The idea to make Nigeria self sufficient in cement production is a good initiative.

It shows that government is thinking in the right direction, considering the increasing demand of cement by construction companies and individuals in the country. If government’s policy on cement is successfully implemented, it will enhance increase in production capacity and will help the economy in various ways. Also, it will crash down the price and remove scarcity of product in the system.

We are consistent in high quality production-Mr. Yusuf Rilwan Olawale, an official of Lafarge Cement WAPCO Nigeria Plc- We increased our production capacity recently with the commissioning of our Ewekoro plant. Our production capacity now is over 8.5metric tonnes. Aside from that, we make provision for specific cement for specific allocation.

The Standards Organisation of Nigeria (SON) has certified our segment of specific production of cement for block making and pre-casting.  Lafarge is the only manufacturer that has subsidiary called Lafarge Readymix Nigeria , which comprises a combination of commercial plants and dedicated project plants. This network expands across residential, commercial, governmental, infrastructure and civil projects, often requiring highly specified concrete solutions.

We have effective back up service and technical assistance. We also have product called Elephant Supaset, which is performance cement with an innovative formulation that meets the high early strength requirements of the pre-cast and block making industry. This product is also formulated for use in specialised applications such as pre-cast manufacture and concrete road repair. Bagged supaset also brings the high early strength benefits to the general user of cement.

The price of cement is still very high – A manager at Omole blocks industry in Lagos , Mr. Henry Usen- “The price of cement is still very high but I can not put on the blame on government. I am blaming government for not granting many people licenses to import cement into the country in order to break the monopoly in the industry. Also, government has failed to provide infrastructure and enabling environment for the few manufacturers of cement in the country to produce optimally.

Aside from these challenges, look at what is happening in the country now. The President who made the pronouncement to ensure that Nigeria becomes self sufficient in cement production has not even been allowed to settle down and tackle core economic issues.  He is seriously being distracted by issues of insecurity in the country and now focusing more attention on providing security and curtailing incessant killing of innocent citizens in the country instead of handling industrial development”.

The high cost of cement is due to subsidy removal- The owner of Ade-rock block industry at Ojodu Berger, Mr. Adewale Lawal- “Last year we sold nine inches block for between N130,00 and N135,00 but now we are selling it for N155 because of subsidy removal and increase in the price of fuel from N65 to N97 per litre.

Now we sell a bag of cement N1,900 for any buyer who comes with vehicle to carry the cement, but any customer without vehicle must pay extra N50 for each bag for the means of conveyance to his site. Currently we are aware that government approved pump price of fuel is N97 but most filling stations around here are selling for N100 per litre, while some are even under-dispensing the product to cheat the masses”.

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