Nigeria: oil price responsible for high cost of cement - MD, Sokoto Cement

Nigeria: oil price responsible for high cost of cement - MD, Sokoto Cement
Published: 30 April 2008

Managing director of Cement Company of Northern Nigeria (CCNN), Sokoto, Mr Alf Karlsen has atributed the increase in the cost of cement across the country to the inconsistent fluctuation in the price of fuel which reflects negatively on the total cost of production.

Mr. Alf Karlsen who made the remark, at the Company 29th Annual General Meeting recently stated that the total energy costs per ton cement produced are 300 per cent higher today than they were in 2002, adding that the unstable supplies of oil products make the situation even worse.

According to him,"in 2006 we (CCNN) got most of our oil products from the Kaduna Refinery. During the last two years we have gotten the LPFO from Lagos or Port hacourt which had meant trucking the fuel up to 1500km to the manufacturing site."

Karlsen added that drastic upsurge in the cost of diesel has also increased the costs for transporting materials to their plant and cement to customers.

He further lamented that the two projects that the rights issue finances, which is the new power plant that could be ran on LPFO instead of the more expensive diesel and the equipment, he said has enabled CCNN to use more rice husk and peanut shells instead of LPFO as fuel for the cement kiln,thus reducing the fuel cost.

While thanking the company’s shareholders for the confidence they have reposed in the company, he assured them that the management and staff of the cement company would do their utmost best to ensure that investors get good value for their money.

"The major success factor is the competence of staff you have on ground who actually do the job,and not how many countries your parent company has operations in or how many cement plants that it has shares in", he stated.

He noted that CCNN is in the process of recruiting several highly qualified Nigerians to trainee positions in the technical departments and they would be trained so that one day they could fill management positions of the company.

Most of the shareholders who spoke at the meeting expressed confidence on the members of Board of Directors which has Dr. Ibrahim A. Gobir as chairman and in appreciating the success recorded last year they unanimously agreed for them to remain in their positons for another term.