NIGERCEM: Long, tortuous road to rebound

September 2000 was the last time cement flowed from the NIGERCEM factory situated in Nkalagu, Ebonyi State. The degeneration began from what was considered as a temporary closure in response to workers’ protests against arrears of unpaid salaries. By the time the then governor of the state, Dr. Sam Egwu, directed that the staff salaries be paid, another dispute over leadership and administrative concerns set in.

It was against that unending bickering that the idea of privatisation was mooted. Those who canvassed the privatization option maintained that it was impossible for government to run a profitable business. The joint ownership of the company by the five southeastern state governments was also perceived as part of the challenges impeding the turn-around of the premier cement factory.

The history of NIGERCEM started in 1957, with the establishment of the factory at the limestone rich northeast town of Nkalagu, in the then Eastern region of Nigeria. Within a period of thirty years, the company went through expansion, diversification and eventual decline, occasioned, no doubt, by the Nigeria civil war. However, after the war and at the brink of the twenty-first century, NIGERCEM started begging for attention and rehabilitation. But consequent upon the series of policy reversals, board and management instability, mismanagement and sustained losses, the cement-manufacturing firm witnessed epileptic fits, ending in coma.

As a result of the back and forth movements around the company, especially concerning the fortunes of the cement firm, the governors of the five Southeastern states of Anambra, Abia, Enugu, Imo and Ebonyi slated the company for privatisation, through a technical committee appointed for the purpose.

In answer to the advertisement for the sale and bidding for the firm by the Technical Committee on Privatization, (TCOP), three companies: Larfarge, HOLCEM and Eastern Bulkcem Company Limited, showed up and were pre-qualified. The Eastern Bulkcem Company bided with DAEWOO International Corporation of Korea as its technical partner, which enabled it to win the bid. EBCL, therefore, bought 60 percent equity share of NIGERCEM as core-investor in the fourth quarter of 2002, after paying a little above N1b to acquire the assets of the company.

By the time the then Minister of Industries, Ambassador Fidelis Tapgun, visited the firm in 2006, the Managing director of EBCL assured the minister that efforts were in top gear to reactivate the factory.  But shortly after the swearing in of Chief Martin Elechi, as Ebonyi State governor on May 29, 2007; the government set up a seven-man Economic Advisory Committee on Monday July 16, 2007; to among other things, articulate strategies for building a strong and vibrant private sector and facilitate the realisation of the economic potentials of the state.

Specifically, the committee was asked to examine the economic viability of existing state government parastatals, companies and investments outfits. Special mention was made of NIGERCEM Plc, as the committee was mandated to examine its structure of equity holding and the necessity or otherwise of Ebonyi State’s increased shareholding, advise on the state representation on the board and staff levels and advise on how best to fast-track the reactivation of that premier industry as a public limited liability company situated in Ebonyi.

Recently, when the management of Ibeto Group signed a memorandum of understanding on the reactivation of the cement factory, many observers said the Elechi committee strangulated the place. They argued that the state government moved in circles for eight years without achieving appreciable progress in the task of reactivating NIGERCEM.

The inauguration of the Economic Management Committee headed by Dave Nwachukwu signaled the beginning of the dog fight between Ebonyi State government and the authorities of the Eastern Bulkcem Limited, re-baggers of Eagle Cement brand, which was by then the core-investor with 60 per cent equity share holding.

With time it became obvious that Elechi was determined to prize the factory out of the clutches of the Rivers State based re-baggers of Eagle cement brand. From the Economic Committee, a judicial panel of inquiry was set up to probe the activities of the long comatose state of the cement factory. In the end, the government also revoked the certificate of occupancy of the land upon which the factory situates.

With the revocation of certificate of occupancy, EBCL was given one month notice to quit the premises of NIGERCEM. The public announcement on the ultimatum explained that the grace period was to afford occupants of the property, meaning EBCL; to quit, pointing out that government intends to move in and take possession immediately.

In the course of the prolonged battle for possession or ownership of NIGERCEM, mutual suspicion tore the investors and owners apart. The Federal Ministry of Commerce and Industry, through three cabinet ministers tried to intervene in the impasse. In 2006 when Dr. Fidelis Tapgun visited, amidst protests by the staff and villagers, who bemoaned the loss of their means of livelihood, the management of EBCL gave assurances that production would commence in due time.

The then Executive Director of the company, Vincent Nehikhere, blamed the seeming comatose state of the factory on plans by technical partners and his company to switch from the dry system to modern system of production. He disclosed that the company had obtained about N4b credit facility from a consortium of banks to ensure the transition and drain the waterlogged pits. Nehikhere also noted that his company, to clear the factory of overgrown weeds, spent much money.

Tapgun recalled how as a little boy the NIGERCEM brand was synonymous with cement. The then minister saw the wastage of opportunities at the NIGERCEM factory as a national disgrace, more so, at a time the price of that essential building construction input was chasing the skies. He assured of his ministry’s preparedness to assist in the resuscitation of the beleaguered elite factory, even as he eulogised the superior quality of cement produced at the Nkalagu factory.

Elechi, who succeeded Egwu as governor, noted that NIGERCEM went down due to “rivalry in greed rather than in virtue” before it was finally privatised and commercialised.

“The people of Ebonyi State, in whose soil the industry is situated, are still asking what has become of their God-given limestone-based industry.”

However, what seemed as a decisive push to settle the rift between Ebonyi State Government and EBCL management occurred during the tenure of Charles Ugwu as Minister of Commerce and Industry. But the light dimmed again as soon as Chief Achike Udenwa came on board as Ugwu’s replacement. Udenwa, was the Governor of Imo State between 1999 and 2007.

It was speculated that Udenwa’s colleague both as governor and then Minister of Education, Dr. Sam Egwu, had some commercial interest in NIGERCEM. The question was whether Egwu was using EBCL as a proxy to buy back NIGERCEM or did EBCL win the majority shareholding on the sentiment that it was the only Eastern based firm that showed serious interest in acquiring NIGERCEM.

While the battle of wits continued, EBCL got Ibeto Group, a major cement importing and re-bagging firm; to buy over its majority shares in NIGERCEM. Having extricated itself from the Gordian knot, EBCL left Ibeto Group to continue with the endless schism with the state government.

Noticing that Ibeto Group has bought EBCL shares, Ebonyi State government went to court, seeking a declaration that Ibeto Group lacks technical competence to revitalise the cement factory, besides being an intruder. The matter lingered in the court.

After the 2015 general election, Elechi served out his tenure of two terms and his successor, David Umahi, directed the withdrawal of the case. That reprieve paved the way for Ibeto Group to take possession and begin the onerous task of bringing NIGERCEM back to life.

One of the initial hiccups faced by the company was the issue of Corporate Social Responsibility, how the investor would give back to the host communities. Those details were recently ironed out, leading to the signing of memorandum of understanding between Ibeto Group, the state government and the four surrounding host communities.

In a telephone chat with The Guardian, Chairman of Ebonyi State Cement Production Committee, Engineer Fidelis Nwankwo, said the question is no longer whether cement would still flow from NIGERCEM but when. He said that contrary to speculations, Ibeto Group was eminently qualified to turn around the fortunes of the premier cement factory, adding that having been in the business for over two decades, Ibeto Group and their technical partners have designed a strategy to adopt modern system of cement production to ensure that the factory begins production as soon as possible.

On the recriminations around the factory premises, Nwankwo, who was the immediate minister of state for defenCe; said the CSR outlined what would go to each community, adding that the abundance of limestone in the area guarantees quality cement production for a long time. He said the state government has not discarded the aspiration to float additional cement factories in the state, stressing that with the rich mineral deposits in Ebonyi, two of such factories could be sustained.

However, while general optimism pervades the state about an early roll out of cement production in NIGERCEM Nkalagu, the cost of putting life back into the industrial complex appears to be prohibitive.

Most of the equipment in the factory have been canibalised, even as the residential quarters and other ancillary facilities have been rundown. From the look of things at the factory, it may take some time before Nigerians start seeing NIGERCEM brand in the market.