Local cement production capacity to hit 53.8mtpa by 2021
With BUA’s plan to establish a three million metric tonnes cement plant and 50 megawatts power plant in Guyuk and Lamurde local governments of Adamawa State, North-East Nigeria, local cement production capacity may hit 53.8 million tonnes per annum (mtpa).
The Company’s newest plant in Sokoto is expected to be operational in 2021. When completed, the Guyuk Cement Plant will bring BUA’s total capacity to 14mtpa.The Nigerian cement industry has three major players dominating the market, with Dangote Cement Plc being the leader wielding 60.6% of the market share with a local installed capacity of 29.3 million MT, Lafarge Africa Plc having 21.8% share with a production capacity of 10.5million MT, and BUA Group accounts for 17.6% share and 8.0mtpa.
There are also small players in the market like the PureChem Industries based in Ogun State with 900.000MT. While the entry barrier remains high, manufacturers have a strong influence over the prices they pay to their suppliers reflecting the oligopolistic nature of the market.
According to a World Bank report, the price of cement in Africa was on average 183% higher than the global average in 2016. Vice President, Prof. Yemi Osinbajo, had in 2018, re-echoed concerns about high prices of the commodity, stating that cement price can be cheaper if per capita consumption increases through the adoption of concrete roads and collaboration among local producers.
Chairman of BUA, Abdul Samad Rabiu, said preliminary findings show that the two local governments of Guyuk and Lamurde are reputed to have good quality of limestone deposits and BUA Cement is ready to begin the investment in the state. He added that the BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing 3,000 direct and 5,000 indirect jobs.
The Chairman stressed that the Guyuk Cement Plant will be the major investment in the North East by BUA, and solicited the support of Governor Umaru Fintiri to set up the factory in Guyuk.
Rabiu said the company decided to source its raw materials locally and has invested billions of dollars in various sectors across Nigeria, while urging the state government to support BUA to actualize the Guyuk Cement project.
In addition, he praised the commitment of the governor within one year in office in many sectors of development despite the economic challenges in Adamawa.
Responding, Governor Ahmadu Umaru Fintiri said his administration’s effort in exploring local content has started yielding results, and thanked BUA for showing interest in establishing the cement plant in Guyuk.
He further assured the BUA management team that the government will do whatever is needed and provide the necessary support which will create an enabling environment so that the BUA Cement company in Guyuk will become a reality. He also expressed his government’s readiness to protect the investment once it is established, and promised to maintain the good relationship with BUA for the benefit of the state.
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