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Edo Cement Commences Production, Begins Construction Of $500m Plant

Published by Guardian on Sun, 19 Feb 2012

LAST year, BUA Group, owner of Edo and Sokoto cement companies, signed a pact for the construction of a $500 million newplant and ancillary projects at Okpella community in Etsako East Local Government Area of Edo State.The plant, when completed, would produce 2.5 million tonnes of cement annually.It was gathered at the weekend that the contractor, Julius Berger Nigeria Plc, has moved to site. Sources from the community said a site proposed for the project along Okpella-Okene Road, Okpella, has been cleared with work expected to commence soon.Also, the old factory of the company, which stopped operations since 1996, is said to have commenced production last month. Public Relations Officer of the company, Mr. James Ezerume, confirmed yesterday that the factory currently produces 20 trucks of finished product daily.The company was a major driver of the economic activities of Edo economy until mid-1990s when its operations started wobbling. Promise of its revitalisation featured as campaign agenda of many political office seekers, including Governor Adams Oshiomhole, for many years. Court litigation over the ownership of Obu Quarry, the limestone deposit that serviced the company, between Okpella and Ado Ibrahim & Co of Kogi State, coupled with associated mining lease controversy also became an alibi for not turning around the fortune of the ailing company until the case was won by Okpella.Heidelberg Cement Group bought the company, a deal many complained was far below the value of its assets, but the firm was committed to reopening in 2000s. Its staff's quarters and other facilities were renovated in readiness for a new phase of production. But the investors left in the wake of litigation over Obu Quarry Mining Lease.Shortly after signing the construction work agreement, BUA invited applications from different categories of staff. The company rated to be the highest employer of labour until it went under was job seekers' 'dreamland', especially the locals who believe they deserve a reasonable employment quota.Executive Chairman of BUA, Alhaji Abdulsamad Rabiu, announced at the contract signing ceremony that the project would be completed in August 2013.'The building will take 28 months to be completed and it is expected to offer jobs to 4,000 skilled workers and over 20,000 indirect jobs to Nigerians,' Rabiu stated.He explained that the management of BUA Group settled for a Danish company known as FLSmidth to build the plant, and that the project would assist the country attain self-sufficiency in cement production.The project is funded by FLSmidth and a consortium of financial institutions led by Ecobank Nigeria Plc.Vice President ofFLSmidth, Mr. Per Mejnert Kristensen, gave assurance that the company would complete the project on schedule, while commending the government for providing right atmosphere for inflow of foreign direct investments (FDIs).BUA acquired 87 per cent stake of the company, which has installed capacity of 350,000 tonnes, in September 2009. The acquisition gave the group control over the company, which the administration of Lucky Igbinedion sold to Norwegian Heidelberg Cement, a transaction revoked when the present administration came to power. After months of negotiation, it was eventually handed over to BUA.Immediately after signing the deal, BUA unfolded a 300 million dollar plan to upgrade and modernise its production processes by installing another two million tonnes capacity line before end of 2011.Rabiu, who was ecstatic about the consummation of the deal, described the acquisition as an exciting opportunity in the sense that it launched BUA firmly into the cement manufacturing business in the country.'This is something we always wanted to do. And for two years we have been struggling to get a mining license, which is a requirement to build a cement factory. For us, this is God-sent. We are now going ahead fully to expand Okpella with additional two million tonnes line between now and end of 2011. We will completely revitalise the place, in the process creating employment opportunities while ensuring that cement is made available to an average Nigerian at affordable prices,' he said.The acquisition came exactly one year after BUA Cement 1 floating terminal was launched.Over 20 months after the Edo Cement transaction, there was no sign that the company would embark on the envisaged turnaround of the moribund company. Worried by the consistent plea from Okpella Kingdom, represented by the Okuokpellagbe of Okpella, Alh. A.Y.E. Dirisu and concerned citizens, Adams Oshiomhole threatened to revoke the sale if nothing was done urgently.That was how BUA was compelled to source for a technical partner and financiers that are currently working together to deliver a new plant that would add 2.5 million tonnes of cement to the market next year.Rabiu explained that the project was delayed as a result of enormous challenge in getting a technical partner with best technology and expertise, adding that it finally settled for FLSmidth because it has successfully built several cement factories in the country.With more than 12,000 employees and local presence in over 50 countries, FLSmidth is a leading engineering company listed on NASDAQ OMX Exchange Copenhagen.Its headquarters is in Copenhagen, Denmark, with project and technology centres in Valby (Denmark), Chennai (India), Wadgassen (Germany), Bethlehem (USA) and Salt Lake City (USA).FLSmidth supplies cement and mineral industries globally with facilities ranging from engineering, maintenance, support services operation to processing.Nigeria's yearly cement demand is said to hover between 18 million and 20 million metric tonnes while local production is far below these figures. Local demand had scarcely been met even with spirited imports aimed at complementing local production. This often leads high cost of the product.Cement is said to contribute over 70 per cent to the cost of housing. Many analysts believe policies that boost local production must be accelerated to meet the huge housing deficit currently put at about 17 million units.
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