Almost always, all major discourse on the challenges of the housing market revolves around building inputs at the centre of which is cement—the queen of building and construction materials.
Nigeria’s annual 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, leading to not just high cost of the product, but also cost of building houses for residential and commercial purposes.
The commissioning of the new Dangote Cement Plant in Ibeshe, Ogun State, with an annual output capacity of six million metric tones of cement is therefore, an answered prayer for many prospective home owners. Expectation is that the new supply will crash the price of existing stock in the market now going for close to N2,000 per bag, up 30 percent from the November 2011 price of between N1, 500 and N1,600.
Currently ranked as the largest cement plant in Sub-Saharan Africa, Ibeshe plant consists of two production lines of three million metric tones per annum, and apart from substantially boosting the supply of cement in the Nigerian market, the plant hopes to create jobs for about 7,000 Nigerians. It is also hoped that this increased supply will help stabilize supply to the market and ultimately bring down market price.
Market analysts hope that this development will bring a positive turnaround for the housing market, explaining that when the price of cement comes down and becomes affordable, more people will be encouraged to build for residence and for the market. They add that when the plant creates jobs for 7,000 Nigerians, they will get income that will give them the purchasing power to either rent or buy houses.
In his speech at the grand and colourful ceremony for the commissioning of the plant which was performed by President Goodluck Jonathan, Aliko Dangote, the president of the Dangote Group, revealed that the aggressive expansion of the company’s local production capacity at their various cement plants is to ensure that there is adequate capacity to meet local demand and export so that Nigeria doesn’t have to import cement to meet her requirements.
According to him, the target output for Ibeshe plant is 12 metric tonnes per annum, disclosing that the construction of another six million metric tonnes per annum Ibeshe Phase 2 would start in a few weeks. He pointed out that a combination of all their Nigerian cement plants gives them 20 million metric tonnes per annum, making the company a power house in cement production in Africa.
“Our Gboko Cement plant, when we took over in 2004, had a capacity of 800,000 tonnes per annum. We have since then modernized and expanded its capacity first to 3.0 million tonnes per annum and currently rated at 4.0 mtpa”, he said, adding that they have completed the expansion of their existing capacity at Obajana in Kogi state with the addition of 5.25 million metric tonnes per annum. “By this, we have raised Obajana capacity to 10.25 million metric tonnes per annum, making the plant the world’s largest cement plant”, he enthused.
Mindful of the challenges in the movement of goods across the country, Dangote announced that his company, last year, acquired 5,000 new trucks to boost their growing logistics needs and also as a part of their commitment to crashing the market price of cement in the country, disclosing that this investment alone has created both direct and indirect jobs for 15,000 people.
President Jonathan, in his speech, thanked Ogun State for creating the enabling environment for industrialization, commending the Dangote Group for setting up the cement plant. He recalled that when government in 2002 introduced the backward integration policy in the cement manufacturing sector, some people wanted to frustrate it, noting that with the present development, Nigeria is better for it.
The president harped on the need for industrialization, stressing that no nation can grow without industrialization. “As a nation, we cannot get to where we want to be without industrialization, and for us to achieve the Vision 2020, we need to get more of the Dangotes”, he said.
He said that government understands the strategic importance of good roads for the movement of goods and services, promising that government would review some of the road projects that were hurriedly entered into including the Lagos-Ibadan Expressway. He assured that government was committed to doing that.
