Exports as next frontier for cement industry
Having increased production capacity to meet local demands, cement producers are beginning to explore opportunities in the export markets to improve their trade margins and buffer shocks that may arise from the markets where their investments are domiciled. FEMI ADEKOYA writes.
The journey of the Nigerian integrated cement manufacturing, which took a new course just over a decade ago, has seen Nigeria move from a nation with under three million tonnes of production capacity to a country that will have some 45 million tons of cement manufacturing capacity by next year – implying about 15-fold increase in capacities.
This important feat has not only made Nigeria self sufficient in cement production but also a net exporter of the commodity.To consolidate this success, indigenous manufacturers are exploring the export option in a move that is expected to improve diversity in product offerings and ultimate reduction in the price of the commodity.
According to the Chairman of BUA Group, Abdulsamad Rabiu, the commissioning of its Obu cement plant as well as the expanded three million tonnes plant through a second line prepares it for the export market.
He noted that the cement sub-sector today represents over 90% of the Nigerian mining sector and employs some 30,000 people directly and over two million people indirectly, even as it also saves the Nigerian economy some $2 billion dollars in foreign exchange.
“The success and impressive efficiency of the Obu cement plant in its first year of operation, which was over 90% in an industry where efficiency averaged 60%, led BUA to commence the construction of a second cement plant line of 3 million tonnes.
“This cement plant is engineered to be the most environmentally friendly cement plant in Africa with the most advanced duct emission systems”, he added.He explained that the deployed technology has the latest filtration with capacity of less than 10 milligram per normal cubic meter, while the deployed natural gas helps the plant to have a very green environment.
“Supplied by the FL Smidth of Denmark, one of the best cement equipment suppliers in the world and powered by Siemens turbines, the plant that has the capacity to produce about 9,000 tons of cement per day or 230,000 per month. CBMI of China is currently building the second Obu cement line on an EPC contract with technology from the best European suppliers”, he said.
Speaking at the commissioning of BUA Cement plant, Osinbajo, who restated government’s commitment to the economic recovery and growth plan of the federal government, said the administration would continue to prioritise the role of the private sector in building a sustainable economy for the country.
According to him, the administration will specifically enable the private sector to achieve their investment drive.“For us as a government, we will do all we can to encourage investment of this type. This is the cornerstone of our economic policy. There is no other way to grow this country more than active participation of the private sector.
“As a government we are committed to creating an enabling environment and eliminating the burdens of investors. We will continue to ease the business environment, while going the extra mile to determine how we can assist the private sector to grow the economy”, he said.
Lauding the organisation’s initiative in building a 5000kw gas plant to power the facility, Osinbajo said the administration had made the clear that the nation’s economic recovery and growth must be private sector driven. He noted that the investment, which is expected to turn the company’s yearly cement output to eight million tonnes by next year, would consolidate the nation’s drive for cement sufficiency and boost the country’s export potential.
With the investments, the Vice President was hopeful that the country would reduce cost of cement in the local market, while providing jobs for millions of Nigerians. Osinbajo said: “This ultra-modern cement plant is a big boost to Nigerian economic. It will bring thousands of direct jobs to skill and unskilled people. This will consolidate Nigeria’s self sufficiency in cement and boost our export capacity.”
Governor of Edo State, Godwin Obaseki, said the investment marks a way forward to industrialisation in the state.“We are currently designing an export processing zone with the initiative of investing in the Gelegele Port to boost production and agriculture which is the major thrust of both the federal and Edo State governments’ economic diversification programme.
“These investments, amongst others will generate revenue through taxation and boost the local economy with a multiplier effect from local sales, transportation and rents from accommodation for small scale and other business investments and jobs for our youths.
“We want to assure BUA Group and Mr. Vice President that we have a responsible and attractive tax regime which has been adjudged as transparent and guarantees returns on investments”, he added.