Ndubuisi Francis in Abuja
The Chairman of the Cement Company of Northern Nigeria Plc (CCNN), Alhaji Abdulsamad Rabiu, has attributed the recent increase in the prices of cement to the increasingly high cost of operations.
A 50 kilogramme bag of cement, which until about two weeks ago, sold for about N1,600 currently sells for between N2,200 and N2,500.
Speaking at CCNN’s 37th annual general meeting in Abuja yesterday, Rabiu, who is the Chairman of the company as well as the Chairman of Bua Group, stated that the operational costs of cement, manufacturers, like other businesses in the country had become unbearably too high for the manufacturers to survive without an increase in the prices of cement.
He cited the prohibitive cost of sourcing the dollar as well as its scarcity as one of the factors.
As part of efforts to reduce the high cost of energy consumption for production processes, CCNN Plc, had concluded better arrangements to build two additional power plants to enable it generate about 60 megawatts (mw) of electricity by 2017.
The company presently generates 16mw electricity from its biomass plant for internal use and for host communities where it operates.
To reduce its current N1.3 billion debt profile, Rabius said innovative ways were being applied, as well as sound marketing strategies to reducing all administrative costs to the barest minimum.
According to him, ‘’The project for production capacity increase and the conversion of the existing production line to solid fuels-coal is ongoing and is expected to reach completion by mid-2017, the use of solid fuels as the main energy for the kiln will considerably reduce the company’s operational costs and its debt profile.’’
Rabiu, who lamented several challenges that faced the company last year said CCNN had at intermittent periods during the last quarter of 2015 shut down the plant due to scarcity and cost of energy.
He noted that despite some of these challenges, the board resolved and recommended the payment of a gross dividend of 10kobo per share compared to the 35kobo it declared in year 2014 financial year.’’
According to him, during the year, the company also recorded a turnover of N13,037 billion compared to N15,119 billion recorded in 2014 while the profit after tax is N1,201billion compared to N1,918billion in year 2014.
‘’Weak demand for cement particularly in the second half inthe year, mainly contributed to the turnover and lower profits compared to that of 2014.’’
He assured shareholders that the company brand is dominant in its home market because of its quality with consistent customer loyalty which has together, with the use of biomass as complimentary kiln fuel and strict cost control, ensured that the company has survived in the market despite the numerous challenges.