Nigeria’s major cement manufacturer, Dangote Cement Group has raised the alarm over the danger that the continued glut in the cement market portends danger for investment in the sub-sector and the economy at large.
The cement group is worried that if no concrete action is taken by the Federal Government to address the situation, the cement industry may go the way of the textile industry.
Following the glut in the market, Dangote Cement said its Benue Cement Company (BCC )in Gboko, Benue State, which was closed down about a month ago, will remain shut.
The company indeed feared that the billions of dollars invested in the establishment of its plants across the country may go down the drain, if steps are not taken urgently to check the glut.
President, Cement Manufacturers Association of Nigeria (CMAN) and Special Adviser to President of Dangote Group, Mr. Joseph Makoju, lamented that Dangote Cement alone has inventory of 950, 000 tonnes of cement and clinker- an intermediary product in the production of cement- that could not be processed and sent to the market due to the fact that imported cement had flooded the market, displacing the locally produced ones.
According to Makoju, "apart from Dangote’s BCC, which is currently shut, other Dangote plants including Obajana Cement plant and Ibese plant have also accumulated shocking volumes of clinker, which cannot be converted to cement and taken to the market for lack of capacity in the market to take up the products."
He said the Nigerian cement industry faced peculiar challenges, which made it difficult for cement produced in the country to compete with those supplied from countries where manufacturing is heavily subsidised.
"The ex-factory price of cement in Nigeria has not changed in the past 4 years, it has been around N1,350 but transportation cost has gone up more than any country in the world and also the price of diesel and LPFO have been going higher making it difficult for manufacturers to get the products to consumers at lower prices," Makoju explained.
He lamented that no fewer than 2,500 people employed directly and indirectly have been affected by the on-going crisis induced by the severe glut that has hit the market.
Makoju warned that more problems would result if the crisis was allowed to linger and more people would be thrown into unemployment as factories continually shut down more production lines.
Speaking on behalf of CMAN, Makoju revealed that manufacturers have suggested to the Federal Government some measures that could be taken to address the situation.
He pointed out the need to impose maximum duty on all imported cement to discourage influx of foreign cement into the country to displace local ones.
Makoju added that CMAN under his leadership has also called on the government to introduce sizable civil construction projects which will necessitate the purchase high volumes of cement therefore creating the much-needed space in the market to take up all the excess cement in the market.