FG Urges Dangote, Ibeto to Halt Hostilities

08 Jan 2013

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Minister of Trade and Investment, Mr. Olusegun Aganga

Crusoe Osagie

The Federal Ministry of Trade and Investment has called on Dangote Cement Plc and Ibeto Cement Company Limited to sheathe their swords over the control of cement in the country, just as it unfolded plans to review the Backward Integration Policy (BIP) in the sector, in order to consolidate on the success recorded so far.

Minister of Trade and Investment, Mr. Olusegun Aganga, who advised the parties yesterday during a meeting with the two firms and other stakeholders in the cement industry, said: “A new cement policy would be unveiled soon.”

THISDAY had Monday exclusively reported that the minister had convened the meeting Monday to resolve the hostilities, which had been festering between Dangote Cement and Ibeto Cement since last month.

Dangote Cement and French multinational, Lafarge, had teamed up to take on Ibeto Cement, an importer of bulk cement.

Dangote and Lafarge had accused Ibeto Cement of causing a crippling cement glut, which had led to the closure of the Gboko plant, a subsidiary of Dangote Cement, and might force both firms to lay off workers.

But Ibeto Cement had vehemently dismissed the claim, accusing them of being economical with the truth and insisted that the company’s five per cent share of the market could not have induced a glut.

It maintained that a glut would have resulted in a fall in the price of cement, which has not happened, and accused Dangote Cement of deploying a deceptive strategy to chase Ibeto Cement out of the cement market in a bid to strengthen its stranglehold on the market in all the regions of the country.

On the contentious issues between Dangote and Ibeto, THISDAY learnt that Aganga secured the agreement of both parties to cease all hostilities against each other and work with government to move the industry forward instead.

In attendance at the meeting were the Managing Director/Chief Executive Officer, Lafarge Cement WAPCO   Nigeria Plc, Mr. Joseph Hudson; Chairman, BUA Group, Alhaji Abdulsamad Rabiu; Group Managing Director, Flour Mills of Nigeria Plc, Chief Emmanuel Ukpabi; Chairman, Ibeto Group, Chief Cletus Ibeto; and Group Representative, Dangote Industries Limited, Mr. Isa Tata Yusuf.

Also, in a statement on the meeting issued by the minister's Special Adviser, Media, Mrs. Yemi Kolapo, the minister said it was the intention of his ministry to review the BIP so as to consolidate on the gains in the industry.

“We have achieved everything we set for ourselves 10 years ago when the BIP was introduced and we want to thank all stakeholders and investors in the sector for the success story recorded so far.

“However, we want to take the next step as part of our strategy on the way forward. We are forming a group of people that will look at the cement policy in detail and come up with a policy response that we need to have in place to take that next step that will make us a major exporter and user of cement in terms of consumption," the statement said.

He noted that in 2002, the major priority of the country’s backward integration policy was about cement production from limestone, but expressed delight that 10 years after the implementation of the policy, “the good news is that we started with 2 million tonnes capacity but today we have about 28 million tonnes capacity of cement from investment of about $6 billion.

“This provides direct and indirect employment for about 2 million people. And because of what we have done together, we have been able to save the country foreign exchange of about N210 billion per year.

“For the first time ever, this ministry did not issue any import licence in 2012. This is a remarkable achievement and a major economic success for our country.”

Aganga, however, said that his ministry intends to carry out a review of the cement sector to ensure that it is more competitive not just locally but internationally because it is at a point where the country should be thinking about exporting cement.

“This means that we need to look at the overall structure including the current pricing, availability, affordability, in addition to developing an export strategy for the sector,” he said.
Also speaking on the outcome of the meeting, Hudson commended the Federal Government for keeping faith with the implementation of the BIP in the cement industry and pledged that cement manufacturers would partner the government to grow the sector.
Lafarge, in a statement, further added that it remained active in operation in the country and has no intention of shutting down its plants.

The company, regarded as the largest cement producer in the world, admitted that it temporarily reduced its production recently to manage inventory levels, but had no intention of closing its plants and expected to be fully operational soon.

“Indeed it is true that the last quarter of 2012 saw an unusually dull market evidenced by an industry-wide situation where current stock levels of cement and clinker are high.”

Despite the lull in the market, the company said its plants were not being closed and it remained committed to sustainable business tenets such as customer orientation, innovation, people development, social investment, strong financial discipline, corporate governance, health and safety, which have kept it in business for the past 52 years and will take it through the long haul.

Tags: Business, Nigeria, Featured, FG, Dangote, Ibeto, Hostilities

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