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Gas shortage: Cement manufacturers lose 36% of output capacity

By Franklin Alli

Inadequate gas supply has compelled cement manufacturers in Nigeria to produce 36 per cent below their installed capacity.

According to Cement Manufacturers Association of Nigeria, CMAN, the umbrella body of the local cement producers, leading producers (Dangote Cement Plc, Lafarge Africa Plc and BUA Group) with combined installed capacities of 31.25 million metric tonnes per annum records actual production of about 20 million metric tonnes.

Mr. Segun Soyoye, Lafarge’s Plant Manager for Ewekoro plants 1 & 2, in Ogun State, disclosed that the situation has forced the company to turn to local waste materials such as used motor vehicle tyres, saw dust, palm kernel shaft and wood for firing cement kilns (cement kilns are the heart of production of Portland and other types of hydraulic cement).

“We are operating in a very challenging business environment. In Lafarge, three years of facing instability in gas supply compelled us to change from gas to Low Pour Fuel Oil, LPFO, to power our 90 megawatt captive power plant.  Six years ago, we were running our captive power plant on gas 95.5 percent but as gas price went up from N550 per gigajoule to over N2, 000 per gigajoule, we changed to diesel; the price of diesel increased from N120 per liter to above N250 per liter; this compelled us to go to Kogi state to source for coal; all these contributed to the cost of production and the price of cement,” he stated.

Awuhe Bem, Production Manager line 2 (christened Lakatabu, meaning Elephant), added  that apart from gas instability, other operational challenges include high interest rate in import duty tariff, foreign exchange issue, and multiple taxes as they are being made to pay at every point on haulage.

He disclosed that the Ewekoro plants have combined installed capacities of over 3.5 million metric tons per annum.

Vanguard learned that Nigeria is sitting on 181 trillion cubic feet of gas; and the supply shortage is due to pipeline vandalism in the Niger Delta and other parts of the country.

 


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