How cement makers turned Nigeria’s big challenge into opportunity

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Once upon a time, Nigeria imported cement in millions of metric tons (MT). Lafarge was the only major cement maker in Nigeria and could not even satisfy one-thirds of the market. China, India, Brazil and several countries found Nigeria a big export market.

Annual cement production between 1999 and 2002 was around 1.7 million MT, but demand was almost 8 million MT.

In 2002, Olusegun Obasanjo, then president of Nigeria, challenged the likes of Aliko Dangote, today’s Africa’s richest man, to move into the cement production business. Obasanjo came up with a policy that revolutionised the cement industry. The policy was simple: Unless you set up a local cement plant, you would not be allowed to import. Nigeria’s population was rapidly growing and it was becoming clear that cement demand would be rising. With a rising population, infrastructure gap was widening.

Between 2006 and 2007, Dangote set up local plants while Lafarge expanded. The likes of Unicem and Cement Company of Northern Nigeria (CCNN) came on board later to chase market share. In December 2018, CCNN merged with BUA’s Kalambaina plant in Sokoto, North-West Nigeria.

From mere 7.5 or 8 million metric tons, demand has shot up four times since 2002. Local production of cement is over 40 million MT today, with Dangote pushing out 70 percent of the entire capacity. Dangote has moved to Edo (Okpella) and Ogun (Itori), with the two plants having a capacity of nine million MT. Dangote has since then established many cement plants across Africa.

“Sales of cement from our Nigerian plants increased by 11.4 per cent to 14.2 million MT in 2018,” Aliko Dangote, president of Dangote Group, said on June 18, 2019, at an annual general meeting in Lagos.

The entry of BUA changed the face of the … Read More...