Manufacturers of cement in the country including Dangote Cement claim their products exceed local demand and as such there is no need for importation. But experts have faulted this claim, writes Okwy Iroegbu-Chikezie.
The argument for and against the continued importation of cement have continued even as stakeholders await government’s decision on it. While the local cement manufacturers claim they have met the local demand and even exceeded the bar, experts insist the claim should be verified before a ban on importation.
The Federal Government during the administration of President Olusegun Obasanjo came out with a policy on backward integration in cement production. The process started when 15 companies were issued import licences and given incentives. They were also asked to, within a given period, build their own local plants.
But, unfortunately, not many of the companies were interested nor had the capacity to embark on local production of cement as they have since resorted to uncontrolled importation. Currently, only three companies (Lafarge WAPCO, Dangote Cement and Bua Cement) have taken up the challenge to locally produce cement and they claim to meet local production.
Dangote said his organisation has taken up the challenge to lead the way in the quest to make the nation self-reliant in cement production, regretting the nation is losing huge sums in foreign exchange to importation. He said: " As an organisation, our desire is to ensure our country not only moves away from export of certain commodities, of which cement is one, but to strengthen the local production capacity to make her an exporting nation while increasing the nation’s foreign reserve.
Dangote, who spoke through the Deputy Director, Operations, Ibese Cement Industry, Mr Vijay Khanna, said the Dangote Group combined capacity, which is in excess of 20 million metric tonnes has exceeded the national demand, which range between 19 and 20 million metric tonnes yearly.
He said: "Last year, the national demand was 17.5 metric tonnes and this year it hovers between 19 and 20 metric tonnes. As an organisation, the total capacity available with us is enough to take care of the cement need of the country not including the combined capacity of all the cement manufacturing industries in the country".
On fears entertained in certain quarters that the plant may have run into some technical hitch and not produce to anticipated capacity, Khanna said nothing can be far from the truth as the cement plant is barely two months old and operating above 95 per cent. He further explained that the plant has 12 machines with each producing 28,800 bags and 10 bulk trucks per day. He reiterated his earlier position suggesting that the government ban future importation of cement to conserve scarce resources, sustain the local industries and create jobs for the teeming population. On challenges faced by the company, he saidit is electricity as huge sums of money is spent on generating electricity round the clock for the cement plant.
But, the National Publicity Secretary of Nigeria Institute of Building (NIOB), Mr. KunleAwobodu advised the government to ascertain the readiness of local manufacturers to satisfy local demand in concrete terms before stopping importation.
He said: "Government should investigate thoroughly the claims of local manufacturers to satisfy local demand before accepting to stop importation. The capacity to continuously supply cement to the market and not at intermittent stages should be verified in the interest of the public".
Awobodu said if indeed local manufacturers have attained 20 million metric tonnes in combined capacity against the national annual demand of 18 million metric tonnes. The price should have naturally come down.
He canvassed that the nation should not be in a hurry to stop importation until there is stable supply of the product. His words: "It is a great irony that despite the claims of local capacity utilisation in the manufacture of cement, the price of cement has not come down. Currently, there is nothing to be proud of in the sector. The government should be careful not to jump into hasty decision; they should give sufficient time to prove the production ability of the local production. It is difficult to judge or evaluate sufficiently the production capacity during the rainy season because naturally demand is low ".
According to him, operators in the sector believe that the reason for the high cost is as a result of the scarcity of the product and are of the opinion that pricing should be a determinant factor in measuring availability and by extension influence a change in policy.
While commending govern-ment’s backward integration policy, he called for caution before discontinuing with the policy.
Vice-President, Association of Town Planners Consultants of Nigeria (ATOPCON), Mr Moses Ogunleye said the veracity of Dangote’s claim should be ascertained and if found to be true the government will have no option but to stop the importation of cement into the country to conserve scarce resources.
He said: "Currently there is, however, no evidence of capacity utilsation as the price of the product is still high at N1, 800- N2,000 depending on the location. l believe that pricing is a function of availability, it is ironical that imported cement are cheaper than the ones produced locally."
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