The management of DangoteCement Plc has finalised arrangements to temporarily close down its four million metric ton per annum Gboko plant as a result of glut in the cement market.
The Group Head, Corporate Communications, Dangote Group, Mr. Anthony Chiejina, who confirmed this in Lagos said the move was necessitated by the current glut in the market arising from the exponential increase in local production of cement and further compounded by the continued importation of subsidised cement into the country.
He disclosed that the production figures for the first 11 months of the year showed increased local production, with supply nowsurpassing demand.
The total supply of cement tothe market at the end of November, according to him, when compared to the same period last year, has shown arecord increase of 11.4 per cent, the highest ever.
He said it was therefore disheartening to note that despite the glut in the local cement market, some cementimportation, though reduced, has continued, thuscalling to question the rigorous implementation of the backward integration policy introduced to encourage local production.
Giving the reason for the choice of the Gboko plant fortemporary closure, the Dangote Group spokesman noted that “…with the dumping of subsidised imported cement in the South-eastern market, there is no way our Gboko cement plant can survive. In fact, workers have been asked to proceed on forced leave pending when the situation improves.
“Our inventory of finished products is beginning to build up at our plants. And don’t forget that projects from our investment of about N280 billion in additional capacity are already on stream, with lines three and four at Ibese and line four at Obajana, coming on stream early this year.”
Chiejina said other manufacturers are also experiencing the same problem of low sales and high inventory and called for urgent solutions to the ugly development.
He advised that government should vigorously implement the provisions of the cement backward integration policy, which are necessary to protect local manufacturers from dumping.
According to him, one potentsolution is for government toconsider the total ban on theimportation of cement in view of the fact that local production now surpasses demand for cement, and in the interim, increase duty and the levy on imported cement to the maximum charge.
If the backward integration policy is to succeed, Chiejina said government should helpto spur demand for cement by encouraging constructionof concrete roads, as they are only marginally more expensive (less than 10 per cent), than roads built with bitumen but last longer.
Concrete roads, he explained,would save substantial outflow of foreign exchange,while reducing the importation of asphalt.
He said: “Nigerians should beproud of what the cement sector has done by making the country self-sufficient and our Ibese plant is ready to start exporting as soon as we receive the ECOWAS permit to hit the ground running.”
Speaking on the development, a renowned economic expert and Chief Executive of Financial Derivatives Company, Bismark Rewane, expressed concern that government was yet to stop the importation of cement despite the increased local production, and called for a concerted effort to save local cement manufacturers.
http://www.thisdaylive.com/articles/cement-dumping-forces-closure-of-dangote-8217-s-gboko-plant/132692/

Let us hope the worker's jobs are secure and their ‘forced leave’ is paid, I seriously doubt it though.

Long One: Let us hope the workers jobs are secure and their ‘forced leave’ is paid, I seriously doubt it though.

Govt should quickly ban importation of cement

^^^I totally agree.

That means more building will collapse all over Nigeria!

I'm of the opinion that the locally produced cement should be much cheaper than it is.
I watched the tour of the Ibese plant on T.V and although I know the pay workers, tax and maintenance and running cost, they just scoop all the raw materials from the ground and the quantity the churn out per day is enough to make small fraction from a bag cover all these cost.
I believe the importers too have right to importation. If we had many local manufacturers of cement, it would have been okay to protect local manufacturers, but what we have is monopoly and they can easily decide to reduce their price to give the importers good competition.