By Franklin Alli

The major stories that shaped the industrial sector of the Nigerian economy in the outgoing year can be summed up in three parts. It was a year of mega merger between Lafarge group and Holcim; a year for strengthening of regional economies by Africa’s Richest Man, Aliko Dangote through his cement empire. The sector also witnessed policy shocks in the second half of the year which persists into the New Year.  The devaluation of the naira and the suspension of Retail Dutch Auction System (RDAS/WDAS) by the Central Bank of Nigeria (CBN) hit industries hard.

LafargeHolcim

On July 15, 2015, Lafarge Group of France and Swiss Holcim announced successful completion of their $40 billion merger into a new company with an annual 350 million tons of cement capacity. Peter Hoddinot, Managing Director, Lafarge Africa Plc, a member of LafargeHolcim, stated that there are many reasons for the merger but the key ones that brought these two great global companies together are that “Both companies have similar corporate philosophies- delighting customers;

they have similar market capitalizations or market values in the stock markets; both had a long history of similar shareholders performance and strong balance sheet and expertise; the merger will create platform for growth, unrivalled excellence, and a platform for the development of employees, suppliers, communities, and shareholders.”

The merger will have a positive impact on the on-going consolidation of the Nigeria operation under Lafarge Africa as Unicem, AskaCem, Atlas, WAPCO operations in Ogun, as well as the Readymix sites across the country will now be integrated as a member of LafargeHolcim in Nigeria.

We will create a stronger company that is able to make a more solid investment in Nigeria and be to able to assist in delivering more affordable housing as well as support for socio economic progress through corporate social responsibility activities, So by bringing them together, we should be able to achieve a lot. The fourth area is that Lafarge Africa is a very large listed company with good credibility. One will expect us to be able to provide financing and all that.

Dangote’s offshore expansion

During the year under review, Dangote Group, through its cement subsidiary, strengthened the economy of four countries in Africa with $1.75 billion (about N3.5 trillion) cement plants in Zambia, Ethiopia, Tanzania and Cameroon. In  Zambia the Group opened their $400 million cement plant, with installed capacity of 1.5 million metrics tonne per annum, and a 30 megawatts coal plant to power the factory.

During the year,  Dangote Cement Plc also commissioned its new three million metric tonnes per annum cement plant located in the Mtwara District of Tanzania. The project cost $6000 million. In Ethiopia the company also commissioned its 2.5 million metric tonnes cement plant, as well as its 1.5 million metric tonnes $250 million Cameroon cement plant.

President of Dangote Group, Alhaji Aliko Dangote, said, “We are spearheading the economic revolution in several African countries; we are a strong advocate of Africans investing in Africa.”  Engr. Joseph Makoju, Special Adviser to President/CEO, Dangote Group, said  the company is inching towards the mark of 62 million metric tonnes total production capacity globally before the end of 2017.

“The expansion is more about economic diplomacy rather than political diplomacy. What Dangote is doing is strengthening Nigeria’s position indisputably as a leader of Africa, economically and politically,” he said.

Suspension of RDAS/WDAS Policy

The apex bank introduced the policy in a bid to protect the nation’s external reserves and save the Naira from further slide in value. This wiped smiles off the faces of operators in the sector since it curtailed their access to foreign exchange for their raw materials. At the time the policy was introduced, the exchange rate of the naira to a dollar was N196.9 at the interbank foreign exchange market, while in the black market it hovers between N210 to N214 to a dollar.

Similarly, British Pound Sterling exchanges between N303 to N304 to the Naira, while the Euro exchanges for N222. At the close of the year, the naira has exchanges N265/USD1.0  at the Bureau De Change, BDC, market, while the Central Bank of Nigeria clearing rate and interbank rate peaks at N196.97/USD1.0 and N199.1/USD1.0 respectively.

Appointment

The year ended with the appointments of  Okechukwu Enelamah,  as the new minister of  Industry, Trade and Investment by President Muhamadu Buhari. His state counterpart is  Aisha Abubakar.