Cement manufacturers hail backward integration policy

Cement manufacturers hail backward integration policy
Published: 19 August 2010

The Cement Manufacturers Association of Nigeria (CMAN), has lauded the Federal Government for reverting to backward integration policy for the cement sector of the economy.

They have also invested NGN120bn (about US$8bn) over the past eight years (2002-09) in an effort to boost local production of the commodity.

Chairman of CMAN, Mr Joseph Makoju, who disclosed these, said cement manufacturers lauded the Presidency for the return to backward integration policy stressing “ President Goodluck Jonathan’s administration is economy-oriented, and they are not paying lips-service.”

He said that the new policy will define the history of cement industry in the country. “The policy’ll have a multiplier effect on the economy, and we need more of it. There is no reason whatsoever for cement import since the raw materials are abundant in the country.”

He believes that with the new policy directive, the country is at the corner of becoming self sufficient in cement production.

“Although, cement importation is one of the best ways to make money because you import at a fraction of your production cost, yet backward integration policy is in the interest of the local economy.

Strict implementation of the new policy will have a dramatic effect on the sector as cement manufacturers will be spurred to inject more fund into factory upgrades, increase their capacity, reduce price of the commodity with the ultimate goal of attaining self sufficiency in cement production by 2013.”

With an assurance that local production will hit 11Mt this year as against 7.9Mt of 2009, he assured that supply of the product would be more than the demand in 2011 as local production companies are excepted to produce a conservative figure of 18Mt next year.

On the issue of scarcity/price-hike, he said that the policy does not stop import, hence there won’t be scarcity. There is still import for the next six month and a monitoring committee have been put in place to ensure that the arrangement works.

We have told our members to demonstrate responsibility in pricing policy. We won’t increase our prices and as our volume increases, unit price of the commodity will further reduce. We are confident we’re going to deliver on the 2013 self-sufficiency targeted date.

It’ll be recalled that the Federal Government recently cancelled all unutilised cement import licences issued from 2002-08, and concurrently issued new cement import licenses to investors that have committed resources to local production of cement.  The new import licenses cover the period of 1st July to 31st December 2010.