Last year, the Presidency, under Chief Olusegun Obasanjo, ordered the closure of Ibeto Cement in Port Harcourt. The accusation was that Ibeto was not manufacturing but instead was re-bagging cement. The closure order came at a time when some ship-loads of bulk cement were on their way to Nigeria for Ibeto Cement. But, recently, relief came the way of Ibeto Cement as President Umaru Musa Yar’Adua directed that the company’s plant be reopened.
Locals have commended the action of the president. Indeed, the government’s order for the reopening of the Ibeto Cement facility is now seen as a major step to break the cartel operated by the few cement makers in the country who are exploiting the scarcity of cement in the country to push up the prices of the product to suffocating levels.
Locals believe that the closure of the facility may have had little or nothing to do with its bagging of cement, especially coming at a time when the company was expecting massive consignment of bulk cement at huge cost to the company. It is therefore believed that government’s reason for the closure of Ibeto facility was more political than economic as there are many other companies in the country that are in the business of cement bagging.
One of the conditions given to companies engaged in local bagging of cement is that they must also migrate with time into manufacturing of cement. This accounts for Dangote Cement’s new cement manufacturing factory at Obajana in Kogi State and its core-investor status in Benue Cement, Yandev. On its part, Burham Cement acquired Calabar Cement Manufacturing Company.
As can be seen, one of the reasons for the current high price of cement is the shortfall in supply of the product. All over the country, a bag of cement sells for between N1,500 and N2,000. This is too high considering that it is a major input in house construction and that a few years ago; its price was less than N700 per 50 kg bag.
The reopening of the Ibeto cement facility will have its multiplier effects on the economy. First, is that it will get thousands of people back to work in this critical sub-sector of the economy. Second, is that it will increase the quantity of cement in the market. Third, it will also force down the price of the product (say local commentators)