CHINA dominates global cement consumption at 1,105kg per capita, representing about 50 per cent of global cement consumption.

While Nigeria’s low consumption reflects the historically weak investment in infrastructure for socio-economic and political reasons, it also lends support to the long-term growth potential of the industry.

However, the Federal Government’s current commitment to revamping the nation’s infrastructure would spur cement consumption in many ways.

In 2008, the Nigerian cement industry had an estimated market size of N361 billion (US$2.4 billion), or in aggregate consumption terms, 13.4 million tonnes, of which 46 per cent (6.2 million tonnes) was produced in Nigeria. Driven by the acute infrastructure deficit and significant demand for housing, domestic production volumes have grown at 25 per cent (CAGR) over the last four years.

Given the strong correlation between GDP growth and cement consumption, cement production growth has also been helped by Nigeria’s strong economic performance in recent years. The Central Bank of Nigeria in 2008 said Nigeria needs US$510 billion in investments in infrastructure over the next 11 years if the nation was to achieve its vision of being one of the top-20 economies in the world by 2020.

The increasing demand for good quality housing, which is estimated at around 16 million housing units, is also expected to be a key catalyst for industry sales growth. Consequently, the CBN anticipated that demand will remain strong, with industry growth averaging between 12% and 15% in 2009, 10%-12% in 2010, and 15% to 20% thereafter.

Lead Capital Investments Lagos recently prepared a report on the cement industry in Nigeria wherein it provided an analysis of the industry explaining the challenges and opportunities within the industry. Some of the highlights include:

*There is the problem of demand versus supply inequality. Supply has not been able to meet the ever growing demand.
*Local production has remained at 50% of installed capacity with an annual growth rate of 3%.

*A major challenge facing the industry is the lack of sufficient funding to carry out operations on a large scale.

*The industry has the potential to contribute to the larger economy as it can be a major employer of skilled and unskilled labour, a vehicle for foreign direct investments, and a tool for infrastructural development, and

*Nigeria’s cement consumption is one of the lowest in Africa.
As stated earlier, the yawning gap between demand and supply of cement will continue to exist until and unless government policy of ‘favouritism’ is removed.

Although the Federal Government is aware of the problem in the industry, rather than finding lasting solution, it has resorted to using the advice of just one individual to determine the fate of millions of Nigerians.

It is common knowledge that since 2004, Dangote cement has boasted that it would bring the cost of cement down to N500 per bag. But that has remained unattainable. We all know the  antics. Alhaji Aliko Dangote wants to first, push other producers out of the market and thereafter use monopoly to increase cement price to his satisfaction. He did same in the sugar industry which today sells between N200 and N300 per packet as against N60 per packet before he came in.

It is trite to compare the production of cement to grinding of corn or cassava. There are many issues germane to the manufacturing of cement and which if not well handled would make the achievement of projections impossible.

Suffice it to say that Nigeria is so big a country for cement industry policy to be written around an individual. Industry operators have noted series of misleading press reports and comments being orchestrated by Dangote for the purpose of negating the very compelling reasons for which the Federal Government initiated the backward integration policy in 2001.

These press reports mostly trade on sophistry and guile, in order to obfuscate the truth and confuse the very same Nigerians for whose benefit the policy was drawn up. Quite obviously this calumnious press campaign is being orchestrated by the same oligopolistic cartel – CMAN- who claims to have the capacity to meet the entire cement needs of Nigerians.

BY OBINNA NWACHUKWU, a commentator on national  issues,writes from Lagos.