NIGERIA: Sokoto Cement to build $600m plant

The Cement Company of Northern Nigeria (CCNN), Sokoto, is to build an additional power plant to make it self-sufficient in power supply to enhance its production capacity. The plant will cost about $600 million.

The company generates 12 megawatts (MW) of electricity but has gone into partnership with a Chinese company, CBMI to build a new plant to increase its generation to 16MW, the Head, Public Communications, Bureau of Public Enterprises (BPE), Alex E. Okoh, has said.

Okoh said the Principal Manager, Corporate Affairs, CCNN, Alhaji Sada Suleiman, stated this while explaining the company’s activities and plans when the post- privatisation monitoring team of the Bureau of Public Enterprises led by Mr. Ibrahim Babagana visited the plant.

He said earlier, CCNN’s plant does not generate sufficient power to take the full load when running the plant on full capacity utilisation. He said CBMI of China has started the construction of a new production line which has a production capacity of one million tons of clinker per year, and that the line should be commissioned by the end of next year to increase the company’s capacity by about 200 per cent.

The BPE team was also told that the company is being operated by the core investor with total staff strength of 383 of which only two are expatriates.

The Cement Company of Northern Nigeria’s prime market area covers six states of the Northwest zone, including Sokoto, Kebbi, Zamfara, Katsina, Kano, and Kaduna. The company is leading supplier within its geographical market area.

The firm was founded by the late Premier of the Northern Region, Alhaji Sir Ahmadu Bello. It was incorporated in 1962 and commenced production in 1967 with an initial installed capacity of 100,000 tons per annum at the Kalambaina plant.

The need to meet the increasing demand for cement necessitated an expansion of the plant with the commissioning of a second line with an installed capacity of 500,000 tons per year in 1985, by the then Head of State, Major-General Muhammadu Buhari. Thereafter, in 1986, the first line was shut due to its uneconomic mode of operation, thus leaving the plant with a rated output of 500,000 tons per annum.

Under the privatisation and commercialisation programme of the Babangida Administration in 1992, the Federal Government disinvested about 20 per cent of its holding in the company and sold it to the Nigerians. But under the civilian administration of Chief Olusegun Obasanjo, the Company was earmarked as one of the companies to be fully privatised. In 2000 therefore, public bidding for the company was concluded and Scancem International ANS of Norway, a member of Heidelberg Cement Group was appointed as core investor and technical partner of the Company. Following a strategic re-orientation, Heidelberg Cement Group divested its CCNN shares in 2008. A Nigerian company Damnaz Cement Company Limited later became CCNN’s new core investor and assumed full responsibility as with its technical/administrative experts.

In 2010, Messrs BUA International Limited acquired Damnaz Cement Company Limited and became indirectly the majority shareholder in CCNN and its technical partner. The ownership structure has core investors owning 50.7 per cent of the company; State Governments over the years reduced their shareholding from 36.8 per cent to 7.6 per cent; while other private shareholders retain 41.7 per cent.

The BPE team expressed satisfaction with the success story of the privatisation and the company is doing to remain competitive.