Federal government steps in to help resolve oversupply dispute, Nigeria

Federal government steps in to help resolve oversupply dispute, Nigeria
07 January 2013

Nigeria’s Federal Ministry of Trade and Investment has stepped in to mediate in a dispute over a supply surplus being created in the local industry.

Last week, a statement by Dangote Cement's head of corporate communications Anthony Chiejina said that Dangote and Lafarge WAPCO Cement were worried about Ibeto Cement Company continuing to import cement into Nigeria, despite the capacity of local manufacturers to meet demand. The oversupply has led to the closure of the Gboko plant run by Dangote Cement and might force cement producers to lay off workers. However, Ibeto Cement has strongly dismissed the claim, insisting that the company’s five per cent share of the market could not have induced a glut.

Local newspaper THISDAY has since learnt that the Minister of Trade and Investment, Olusegun Aganga, has invited the two conflicting parties and other stakeholders in the cement industry to a meeting in Abuja to discuss the concerns. The minister hopes to build bridges between the producers and importers in order protect the significant progress made to-date by the cement sector through the Federal Government’s backward integration policy.

Speaking to THISDAY, Aganga said the meeting today is part of the regular consultations he holds with stakeholders in the sub-sector he described as a “key industry” in the economy.

“We meet and talk regularly, it is a growing sector and we are proud of what we have done in the sector. From around 2Mta in local cement production capacity, we have grown it to over 20Mta between seven and 10 years.

“From being a net importer of cement, we have grown to the point that my ministry did not issue out any import permit for cement in the whole of 2012. We have also helped the country to save over NGN200bn in foreign exchange that could have gone into cement importation.

Cement manufacturers, under the aegis of Cement Manufacturers Association of Nigeria (CMAN), have also said that unless the federal government fulfils its promise of halting importation the cement sub-sector of the economy might go into serious decline, with inventories building up at plants and reduced production.

Published under Cement News