By Alex C
If key players in the cement industry conclude their short-term expansion plans, then Nigeria’s capacity will reach as high as 58.5 million metric tons (MTs) annually in next to no time, dwarfing South Africa’s capacity that stands at 18.3MTs and Egypt’s 48MTs.
Recently, Dangote Cement announced that it was adding 6 million MT through its newly-built lines C and D at Obese plant. The company will get 12MTs from just the Ibese cement factory, a feat equivalent to about 24 million bags of cement per annum. By implication, the company’s capacity will likely reach 29MTs per annum before the end of this month.
“Before the end of the year, we will be putting in place a minimum of two cement plants, if not more. That shows the confidence in the short and long terms,’’ said Devakumar V.G Edwin, group managing director/CEO, Dangote Cement (DangCem) plc said.
With the transaction which has seen Lafarge Group transfer its shareholdings in businesses in Nigeria and South Africa into forming Lafarge Africa, 12MT capacity is already guaranteed.
“The intended Lafarge Wapco/Lafarge Africa consolidation, with a unified management across four businesses in Nigeria is much better positioned to deliver growth than Lafarge Wapco as a stand-alone company,’’ CSL Equities, economic and market research firm said in its June report.
The United Cement Company of Nigeria (UniCem) is investing N84 billion in an additional 2.5MT cement line project to double its 2.5MT existing capacity to 5MT per annum by 2016, and consolidate its position as Nigeria’s third largest manufacturer.
Also, Ashaka Cement is investing N100 billion to increase capacity to 4MT per annum
“We are now increasing the production capacity to 4 million tons per annum by improving the existing cement plant to 1.5 million tons per annum. This will entail the building of a coal-fired captive power plant (CPP) and building of a complete new cement plant of 2.5 million tons per annum capacity at the total estimated cost of over N100 billion,’’ said Umaru Kwairanga, chairman, AshakaCem, during the expansion capacity groundbreaking ceremony held in Gombe State, recently.
In 2010, BUA International Limited acquired Damnaz Cement Company Limited and became indirectly the majority shareholder in Cement Company of Northern Nigeria (CCNN) and its technical partner. The firm also acquired Edo Cement Factory.
A pact was subsequently signed for the construction of a $500 million new plant and ancillary projects at Edo Cement situated in Okpella. It is expected that the plant has the potential capacity of 2.5MTs.
Renaissance Capital attributed the growing fortunes of the sector to beneficial government incentives, notably the Backward Integration Policy (BIP), which initially limited cement importation to market players committed to developing their own domestic production capacity.