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FG may unban importation of bagged cement

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Indication emerged yesterday that the Federal Government may unban importation of bagged cement if lasting solution is not immediately found to the spate of high soaring prices across the country.

ISAAC AREGBESOLA & KEHINDE AKINTOLA

President Musa Yar’Adua in Abuja expressed worry on the incessant increases in the price of cement and ordered for an immediate action to stem the tide and find a lasting solution.

The President, handed down the order during the meeting of stakeholders in the cement sub-sector.

Charles Ugwu, minster of commerce and industry who spoke on behalf of the President at the meeting warned that government was no longer comfortable with the situation and wanted immediate solution to the problem.

"My understanding today, the demand of cement is in the order of 14 million tons but projected to about 15 to 17 million tons. Out of that unfortunately as at today only about four million tons are produced."

He insisted that the cement producers must collectively resolve at a fixed price of the product across the country despite the problem of infrastructural facilities, especially road transportation.

"The decision of government which is contrary to the policy is that the shortfall will be allocated to those who have made investment down stream to import so that by the time they combine their high localised import cost from cheaper imports you will now blend and have a price that is fair to you, given fair returns and also allow Nigerians to get stable supply.

"Unfortunately as I speak to you today cement has gone up to as high as N1800 per bag which if you do your calculations means that local cost of cement is in the range of $240 per ton.

"I am aware of the difficulties but what do we do in the mean time? We need to agree on a price that is fair to all.

"But if after this meeting we are not able to find a reasonable way out, I may have no other option but to recommend to the President that we open up the borders and allow bagged cement to come back," he said.

That could be an extreme measure if we don’t find a solution. We know of the costs and difficulties but we want solutions now.

"It is the last thing I will recommend to the government but that is the suggestion being made to government by those who don’t understand what we are doing, the biggest mistake we can make is to fail and allow bagged cement to come back in because the prices are too high" he warned

Mr President according to Ugwu stressed that "his government would no longer tolerate the situation whereby Nigerians continue to cry under the heavy yoke of high cement prices".

The president who tasked local producers of cement to find a way out of the situation said he would not want a situation whereby government would be forced to commence importation of bagged cement which was once banned

The Minster who told the stakeholders that would be the last option to recommend to Mr President however warned that "If the situation continues, government may have no option but to un-ban the importation of bagged cement which it bagged years ago".

He expressed worry that "wherever government intervened in trying to save the local industries by coming out with a policy it seems that the situation always become worse look at sugar and cement for example the prices have gone out of roof, we have the responsibility to ensure that we have fair price, ensuring that consumer gets good quality of product at a fair price"

Ugwu said "Mr. President has told me that the situation must change. He wants me to ensure that the price situation in the cement industry is looked into as quickly as possible.

"Being a manufacture myself, I am aware of the problems associated with production cost, but that is not enough for us to keep having a rise in price. You may recall that government restricted import of bagged cement to encourage local production. But this seems to be having a negative effect as prices have continued to rise to the detriment of the building industry.

The Minister who however agreed that there are some problems like infrastructural difficulties being faced by the manufacturer therefore commended them for investing in the business

"You all have done well in the areas of investment for bagging plants for cement. We realise that it is not easy" the Minister commended the cement producer but however lamented that "what is worrisome is that prices have remained high. We want to know what has gone wrong and find a way out of it. The shortfall in production is also a source of concern".

FG may open borders for bagged cement

ERASMUS ALANEME, Abuja, September 7, 2007

 

Federal Government yesterday lamented the high price of cement in the country, warning that it may be forced to open the borders for bagged cement to come in unless stakeholders in the sector find an immediate solution to the problem.

President Umaru Musa Yar’Adua, who spoke through the Minister of Commerce and Industry, Chief Charles Ugwu stated that his administration would no longer tolerate the situation whereby Nigerians continue to cry under the heavy yoke of high cement prices, insisting that local producers of cement must find a way out of the situation.

Ugwu, who was speaking at the 13th meeting of stakeholders in the cement sub-sector in Abuja, reiterated that government may have no option but to reverse the policy on ban of imported bagged cement .

Telling the stakeholders that government was no longer comfortable with the situation in the cement and wants an immediate solution to the problem, Ugwu added that "Mr. President has told me that the situation must change. He wants me to ensure that the price situation in the cement industry is looked into as quickly as possible.

According to him "You may recall that government restricted import of bagged cement to encourage local production. But this seems to be having a negative effect as prices have continued to rise to the detriment of the building industry.

"You all have done well in the areas of investment for bagging plants for cement. We realise that it is not easy. What is worrisome is that prices have remained high. We want to know what has gone wrong and find a way out of it. The shortfall in production is also a source of concern"

"I am aware of the difficulties but what do we do in the meantime? We need to agree on a price that is fair to all. But if after this meeting we are not able to find a reasonable way out, I may have no other option but to recommend to the President that we open up the borders and allow bagged cement to come back. That could be an extreme measure if we don’t find a solution. We know of the costs and difficulties but we want solutions now" he added.

 

Govt may consider import to crash cement prices
From Emeka Anuforo, Abuja , September 7, 2007

PRESIDENT Umaru Musa Yar'Adua is displeased with the current high price of cement. He has therefore threatened to open the country's borders for importation of cheaper cement.

However, he challenged local producers to rise to the challenge by bringing down the price of the commodity locally to render importation unnecessary.

The Minister of Commerce and Industry, Charles Ugwu, who disclosed this at the 13th meeting of stakeholders in the cement sub-sector in Abuja, said that government was no longer comfortable with the situation in the cement market and wants immediate solution.

Also yesterday, the President directed the Minister of Finance, Dr. Shamsudeen Usman to release all the Federal Government's funding obligations to the Niger Delta Development Commission (NDDC) as stipulated in the NDDC Act.

Ugwu told the stakeholders at the Abuja meeting: "Mr. President has told me that the situation must change. He wants me to ensure that the price situation in the cement industry is looked into as quickly as possible.

"Being a manufacture myself, I am aware of the problems associated with production cost, but that is not enough for us to keep having a rise in price. You may recall that government restricted import of bagged cement to encourage local production. But this seems to be having a negative effect as prices have continued to rise to the detriment of the building industry.

"You all have done well in the areas of investment for bagging plants for cement. We realise that it is not easy.

"What is worrisome is that prices have remained high. We want to know what has gone wrong and find a way out of it. The shortfall in production is also a source of concern.

"I am aware of the difficulties but what do we do in the meantime? We need to agree on a price that is fair to all.

"But if after this meeting we are not able to find a reasonable way out, I may have no other option but to recommend to the President that we open up the borders and allow bagged cement to come back. That could be an extreme measure if we don't find a solution. We know of the costs and difficulties but we want solutions now."

It was also good news to the Niger Delta as Yar'Adua yesterday directed Usman to release all the Federal Government's funding obligations to the NDDC as stipulated in the NDDC Act, as a way of accelerating the development of the region.

The President however said after receiving a briefing from the Presidential Monitoring Committee on the NDDC, that for the regional intervention agency to be effective and have a greater impact on the lives of the people of the Niger Delta, it must stay out of areas that are best left to state governments and local councils.

Thus, he advised the NNDC to concentrate on medium-sized infrastructures that cut across states in the region.

The President also urged the management of the NDDC to ensure greater compliance with the requirements of due process in the award of contracts, insisting that they take steps to enhance the commission's capacity for project management.

While thanking the monitoring committee for its briefing, President Yar'Adua urged its members to work harder to fulfil the mandate given to them by Article 21 of the NDDC Act to effectively monitor the commission's fund management and budget implementation.

The committee had in its report to the President presented by its chairman, Ambassador Lawrence Ekpebi at the Presidential Villa, Abuja, highlighted shortfalls in statutory contributions to the NDDC by the Federal Government and other stakeholders as one of the problems facing the commission.

It recommended "institutional strengthening" of the NDDC and capacity building within the commission in the critical areas of project execution and management

WAPCO to expand capacity by four million metric tonnes
By Layi Adeloye
Published: Thursday, 13 Sep 2007

Lafarge, the majority stakeholder in West African Portland Cement Plc, has unfolded plans to raise the Nigerian subsidiary's capacity by four million metric tonnes per annum.

The Vice-President of Lafarge, Africa, Middle East, Western and Eastern Europe, Mr. Guillaume Roux, who disclosed this in Lagos on Wednesday, said the move was part of the conglomerate's demonstration of faith in the Nigerian economy.

Roux was on a working visit to WAPCO Plc. In his address to journalists shortly after a board meeting, Roux said
the Nigerian market was important to Lafarge, as "it is a leading market in the range of Lafarge's emerging markets."

He, however, declined giving the amount to be invested on the project either by WAPCO or Lafarge, saying, "An opportunity study has just been done, while we are moving to the feasibility study stage."

At present, WAPCO operates with two million metric tonnes capacity per annum on the average. The addition of the proposed four million metric tonnes is, therefore, expected to take WAPCO's production capacity to six million metric tonnes per annum.

He said, "The proposed project will involve the erection of two new production lines with 5,000 tonnes of clinker per day each, which will effectively increase WAPCO's total output to six million metric tonnes per annum. "In realisation of this objective, an opportunity study has just been successfully carried out as a first step in the process. The company
has commenced a feasibility study to ascertain the potential of the venture. It is expected that a final decision will be taken on
approval of the project by December 2007."

Although he said that the project was still at an exploratory stage, Roux, however, said that the board of Lafarge would take the final decision on it in December. Describing the Nigerian project as part of Lafarge's global expansion
programme, he noted that the Nigerian market remained of primal importance to the comglomerate.

According to him, Lafarge had plans to raise its production output to 45 million metric tonnes from the current estimated 37million metric tonnes globally.  He said that in view of the fact that more than half of its current
sales output came from the emerging markets, the programmes of continued investment in market expansion and productive capacity in Nigeria were justifiable

Ibeto Cement Factory Commences Production, will bring cement price down

The N12 billion Ibeto Cement Factory in Port Harcourt, Rivers State, yesterday took delivery of 35,000 metric tons of  bulk cement (about 1,750 bags) to hit the market today after over two years of closure ordered by former President Olusegun Obasanjo.
The consignment, which came on board a 53,000 deadweight vessel, MV Medi Osaka from Indonesia, was seen at the discharging bay of the company at Bundu Ama Jetty, while Chief Executive of the Ibeto Group of Companies, Mr Cletus Madubugwu Ibeto assured that the next consignment would be due in 10 days.
He expressed happiness that the dark time of the company was over courtesy of President Umaru Musa Yar'Adua, adding that he was not going to  look at the losses occasioned by the closure but was committed to keeping to his words of crashing the price of cement in Nigeria.
"Whatever it will take us to bring the price of cement down, we will do it. We will not allow the monopolistic gangs to take over," he assured.
Ibeto who danced to the rhythm of the music supplied by host community dance troop  to celebrate business commencement, said Ibeto Cement is offering employment to over 2,000 peoples.
promised that he would assistthe federal government to ensure that the prices ofcement was affordable and cheaply available.
Asked on what he thinks the prices would be, hereplied that it should be form N1250 per bag and crashfrom there, adding that Nigerians should get ready tobuild their own houses as the product would be cheaplyavailable.
He said that though it was a capital intensiveventure, he has a laid down plan to graduate fromrebagging to proper local production through use oflime stone which may take some time to accomplish.On how the nation would be freed from the importationof cement, he said it would take some time to achievebut agreed that it is achievable and expressed hisreadiness to work top assist the housing policy of thepresent administration which allowed life back to theproduction line of the factory.In what amounted to counting his loses, he said partsof his equipment caked while some rottened but thatthe thought of the loss would bog him down so he wouldnot want to contemplate looking at it or the projectmay not move forward.
"I promised to flood the country with cement. Today,we have landed the first consignment. I made a promiseto President Yar'Adua and I have started fromrebagging to production and with time I will do it. Iwill not stop until I am able to do what I havepromised", he said.Earlier, Secretary of the Nigerian Labour Congress inRivers State and Chairman of Bundu Ama Community,Comrade Williams Addah who led his people to the baycriticized the closure of the factory as an economiccrime.
According to him, preferential treatment of investorswas bad as it created monopoly while a place thatensures the daily bread of the community was closeddown just to favour friends of the leaders in controlthen.He pledged that for Ibeto to invest so much in theirState, he was automatically granted the citizenship ofRivers State while he assured that whatever problemthat may arise between the management labour will beamicably settled.

FG Appoints Panel To Review Waivers Under Obasanjo 

Yar’Adua Lifts Ban on Cement Importation

President Umaru Musa Yar’Adua has lifted the ban on the importation of bagged cement into the country.
The lifting of the ban, according to the government, is with a view to bridging the deficit of 11.5 million tonnes in the supply of cement, which has been recurrent in the industry in the last few years.
Minister of Commerce and Industry, Mr. Charles Ugwuh, who announced Federal Government’s decision in Abuja yesterday at a stakeholders’ meeting, explained that the President was concerned about the shortage of cement as against demand in the market.
The annual demand for cement is estimated at about 18 million metric tonnes.
But the annual consumption of cement in the country for last year was estimated at 11.125 million metric tonnes.
Yesterday’s lifting of the ban on cement importation came on the heels of a proposal submitted by Ugwuh to President Yar’Adua after the stakeholders meeting held in October 2007.
At that meeting, government had kicked against the hike in price of cement and huge deficit in local production and supply of the product.
Addressing the meeting, Ugwuh said: "This meeting is important because it is called at the instance of the President. In October 2007, I met Mr. President after the series of meetings I had with you and due consultation with individual stakeholders. We submitted a proposal to Mr. President indicating the capacity of the demand in the market place in Nigeria vis a vis real local production capacity.
“Based on that, we established there is a shortfall with regards to supply and we requested Mr. President to approve in accordance with the cement policy the importation of the differential between the market demand and the established local production capacity.
“Local operators can only supply between 6 and 6.5 million tons of cement leaving the deficit of 11.5 million tons. It was based on this that the President now wrote and gave approval and a guideline on what we should do and what the stakeholders and business group should do in this matter,” he said.
While maintaining that the decision of government was aimed at rejuvenating the cement industry, the minister also said the move would go a long way to alleviate the suffering of consumers who pay through their noses for the cement; stabilize price and supply of cement as well as encourage investors.
Ugwuh also affirmed that the administration was willing to enter into a pact with the Economic Community of West Africa States (ECOWAS) to liberalise trade under the Economic Partnership Agreement (EPA), which many European countries would soon take advantage of.
"In terms of market opening, we do have a tremendous opportunity for all of you producers in Nigeria mainly because the whole of ECOWAS is indeed and could indeed depend on Nigeria from Mauritania to Cameroon as far down as Angola given the speed of expansion taking place in the oil industry in their country and in the building of infrastructure.
“So the current situation where we are not making adequate investment and growing the business in the way we should does really encourage the policy makers, the President of this country as many people are complaining that the policy is not working,” he said.
Present at the forum were representatives of 13 cement manufacturing companies in the country. They included Dangote Industries Limited; Lafarge Group, West African Portland Cement Plc; Flour Mills Nigeria; Ibeto Cement Company and Eastern Bulkcem Limited. Others include Quacem Cement Company; Essette (Nig) Limited; Gateway Mining Company Limited; Purehem Industries Limited; Gateway Portland Cement Limited; Westcom Technologies and Energy Service and International Cement Company Limited.

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