This year, Lafarge Cement WAPCO Nigeria Plc. is celebrating five decades of what they termed ‘bringing materials to life’. According to its company’s Chairman, Chief Olusegun Osunkeye, the 50 years are not only measurable in the length of time alone “but, importantly, Lafarge WAPCO has had tremendous positive impact on its stakeholders, while leaving a visible and enviable landmark on the Nigerian industrial landscape.”
Osunkeye said that the company’s brand, Elephant Cement, has consistently won the NIS certificate for product quality awarded by the Standards Organisation of Nigerian (SON) for over two decades now. In 2008, it commenced expansion project branded Lakatabu, a 2.2Mt plant which will double the output of the company. Its foundation laying ceremony was performed in February, 2009. It is expected to be completed in the first quarter of 2011.
The company was confronted with a lot of challenges in 2009. Energy crisis got to its peak in the country owing to the vandalism of the gas pipelines. Production of cement from the two plants at Ewekoro and Sagamu were adversely impacted by an acute gas supply disruption for 82 days and 250 days respectively.
“As part of our response to the gas situation in the country, we introduced the use of expensive Low Pour Fuel Oil (LPFO) and we also consumed a sizeable quantity of imported clinker at a much higher cost. All these gave rise to the shortfall of about six per cent in cement dispatches compared with 2008.
To ensure uninterrupted power supply as a result of continued epileptic supply from the grid, we had to depend mostly on Independent Power Providers’ Generators that ran on expensive diesel,” Mr Osunkeye said.
Due to the above unfavourable circumstance, the company’s operating profit for the year decreased by 32 per cent to N8.27bn compared with N12.12bn achieved in 2008. Last year, the company recorded a net income after taxation and exceptional items of N5.05bn.
The Lakatabu expansion project is being part-financed from the company’s internal cash flow. With the company’s performance in 2009, the initial assumption on cash flow had to be reconsidered. Nevertheless, the company is geared towards completing the project as planned and consolidating its position.
Mr Osunkeye noted: “We are doing our best to grow our earnings. It is cost of cost elements in Nigeria, The more we can reduce cost of operations, the more we will increase our earnings. We will continue to look into ways to reduce operating costs.”