Nigeria: price of cement may fall by December

Nigeria: price of cement may fall by December
18 August 2010

The Cement Manufacturers Association of Nigeria (CEMAN) on Tuesday in Lagos said that the price of cement would likely fall before the end of the year. The chairman of CEMAN, Joseph Makoju, disclosed that cement production would reach some 18Mt by 2011 from the current 11Mt.

According to Makoju, with such a development, cement production will go beyond local demand. He said that the boost in production was due to the Federal Government’s policy to encourage local production and banned the issuance of licence for importation.

Makoju described the policy as a bold step in the right direction, adding that the administration of President Goodluck Jonathan was committed to the country’s industrialisation and poverty alleviation.

He said that the cement policy was formulated in 2003 but was not implemented until recently. “The Federal Government’s step is a complete implementation of the road map that would enable the country to be self-sufficient in cement production to the benefit of all. “What we have in place now is that the gap between local production and demand will be imported in the short run and it is no longer an all comers’ affair,” he said. Makoju said that with the huge investment in cement production across the country, the price of cement would soon drop.

He added that because of the high production of cement, many companies were already exploring ECOWAS countries and beyond for export. He said that cement companies such as Ibese, Benue Cement Plc, Obajana, plants belonging to Dangote Group, would produce more than 20Mta.

“Besides, there is also the 4.5Mt of cement from the Nigeria Flour Mills, owners of Unicem while BUA Cement is expected to produce 500,000tpa. “The Bendel Cement plant, AVA company and other new factories are coming on stream and Nigeria has 95 per cent of the raw materials.

“Such comparative advantage was long overdue to be tapped to grow the nation’s economy and export the commodity to other countries,’’ he said. He noted that countries with less potential had been flooding the country’s market with substandard cement, leading to building and construction failure.

“The country spends about N1.8trn on importation of cement annually, thereby creating huge investment and job creation for other nations and huge capital flight that can be diverted to other uses.

“But all that will soon stop when local production exceeds demand,” he said. Makoju said that most of the government enterprises, including cement factories, were established in the 1960s and many went into comatose because of inconsistency in policies. “In 1985, Nigeria was producing over 3.5Mt while it imported only 800,000t.
Published under Cement News