As Government plans to ban the importation of cement by the end of March, all fingers seem to be directed at Dangote cement as a clear leader in Nigeria’s Cement business. With its production hitting close to 20 million metric tonnes, about 80% of total local consumption of cement in Nigeria; it becomes glaring that Dangote group will call the shot in the 2012 market.
The recent commissioning of the Lakatabu plant by Lafarge and the soon to be commissioned Ibeshe plant, promoted by the Dangote group, will effectively raise local production to 24.5 million metric tonnes per annum, thereby bringing to an end the era of dependence on imported cement to meet local consumption needs. Out of this figure, the Dangote group alone will produce about 20 million metric tonnes of cement this year.
Cement Local consumption has been on the increase over the years. In 2004, the nation consumed just a little above 8 million metric tonnes with 74% of the quantity consumed made up of imported cement. But with the introduction of the import quota, this reduced gradually over the years as local production made up 71% of total consumption of 17 million metric tonnes in 2011. The remaining 29% was imported by various firms licensed by the federal government for that purpose. This notwithstanding, the price of a 50 kg bag of cement has remained high. A bag sold between N1, 500 and N3, 000 in 2011, while it is currently selling for about N2,100. Some of the reasons attributed for the high cost include poor power supply, the rising cost of diesel and rising distribution costs.
Source: 3Invest