Nigeria: Dangote closes cement plant

Nigeria: Dangote closes cement plant
07 December 2012

The management of Dangote Cement Plc has finalised arrangements to temporarily close down its 4Mta Gboko Plant as a result of competition and excess cement in the market, according to Guradian News.

The Group Head, Corporate Communication, Dangote Group, Anthony Chiejina who confirmed this in Lagos, said the move was necessitated by the glut in the market arising from the success currently being recorded with the exponential increase in local production of cement and further compounded by continued importation of subsidised cement into the country.

Chiejina disclosed that the production figure for the first 11 months of the year showed increased local production level with supply now surpassing demand. Total supply of cement to the market at the end of November, according to him, when compared to the same period last year, has shown a record increase of 11.4%, the highest ever.

Chiejina added, it was therefore disheartening to note that despite the glut in the local cement market, cement importation, though reduced, has continued, thus calling to question the rigorous implementation of the backward integration policy introduced to encourage local production.

Explaining the choice of BCC for a temporary shutdown, the Dangote spokesman added that “…with the dumping of subsidised imported cement in the South eastern market, there is no way our Gboko Cement plant can survive. In fact, members of staff have been put on forced leave pending when the situation improves.”

“Inventory of finished products is beginning to build up at our plants. Don’t forget that projects from our investments of about NGN280bn in additional capacity are already on stream, with lines 3 and 4 at Ibese and line 4 at Obajana, coming on stream early this year.”

Chiejina said other manufacturers were also experiencing the same problem of low sale and high inventory and called for urgent solutions to the ugly development.

He advised that government should vigorously implement the provisions of the cement backward integration policy that are needed to protect local manufacturers from dumping.

Published under Cement News