WITH the recent implementation of backward integration policy on cement sub-sector, which is expected to accelerate the attainment of self-sufficiency and guarantee reduction in the market prices, cement makers have launched a fresh scheme to increase local capacity of production within the year. The new plan by members of the Cement Manufacturers Association of Nigeria (CMAN), is expected to exceed the nations consumption capacity, now put at 15 million metric tonnes per annum, and douse the tension in the building materials market, where dealers and middlemen have influenced the prices of the product. Statistics show that between the 80s and 90s, Nigeria imported about 70 per cent of cement, causing a ripple effect on the local cement manufacturing industry. By 2003, local cement manufacturing capacity had collapsed to 1.98 million tonnes, thereby meeting only 23.53 per cent of local supply, while 8.4 million tonnes of cement were imported. In 2002, the Federal government introduced an import substitution regime or backward integration, designed to re-energise the industry and once again reduce over-reliance on importation. Six years after, in 2008, the policy marked an increase in cement consumption in Nigeria on a record of 13.04 million tonnes and importation rose to 7 million tonnes. The local production increased to 6.40 million tonnes, representing 46.50 per cent of total supply with a balance of 53.50 per cent (6.98 million metric tonnes) supplied through imports. However, in 2008, the 6.06 million tonnes of cement were produced locally and would have cost $770 million to import at an average import price of $127.50 per tonne. Last year, about 5.5 million tonnes were imported and total demand was in excess of 14.5 million tonnes. Analysts are of the opinion that should the government maintained its anti-importation of cement policies, coupled with the various ongoing projects by manufacturers, the country may be on the path to self-sufficiency in cement production and possibly a drastic reduction in cement prices. CMAN Chairman, Mr. Joseph Makoju, said last week during a facility tour of journalists to Obajana and Gboko cement plants that by the end of the year, for the first time in couple of years, local cement manufacturers would be able to meet local demand of the product. He said by the end of 2011 the total cement production would be 17 million tonnes, which doubles the eight million capacities locally produced two years ago. All the things within our control, we are on top of it. We will vindicate the government on the policy it made in our favour. As local capacity comes on stream, the fluctuation in cement prices will be a thing of the past. He said: 2011 is the set target not only to be self-sufficient in cement manufacturing but to also be a cement exporting nation. That is the aspiration of the association. The target that was given by the government to the manufacturers is that by 2013, Nigeria should be sufficient in cement production. He said: Controlling imports is governments form of protection for manufacturers. I will not dispute the prices of cement is high. But, there is nowhere in the factories that cement is sold above 1300 per 50 kilogramme bag. Our depot and ex-factory prices have not changed in the past two years. We are opening more depots all over the country and normally take cement there to absolve the transportation cost. Makoju attributed the high cement process to transportation cost as result of rise in diesel prices, which has worsened the transportation of bulk products as well as high demand of the product during the dry season. However, he said that CMAN members have invested heavily on trucks to keep the market prices stable and have had discussions with Pipeline and Product Marketing Company Limited (PPMC) to ameliorate the situation. He said that lots of ongoing projects would increase the local capacities. For instance, Ibeshe, a new plant by Dangote Cement Company will be completed before the end of the year, Obajana is expanding, Dangotes Benue Cement Company (BCC) is also expanding, Lakatabu in Ewekoro will be completed soonest. Makoju said that the plants will be able to meet all of Nigerias cement demands, including a possible price reduction while Lafarge WAPCO, is set to double its output in its new cement plant, Lakatabu. The Lakatabu projects, a 2.2 metric tonnes plant, when it commences operation also in early 2011, will double Lafarges output. He said Lakatabu would add 2.2 million metric tons output to the two million metric tons capacity from Ewekoro and Sagamu, all in Ogun State.
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