Back-off Cement or face the Consequences, Dangote tells Yar’Adua
A fresh offensive to bring down the price of cement has already hit a snag as the powerful cement cartel led by billionaire business magnate, Alhaji Aliko Dangote are digging trenches ahead of what promises to be an imminent showdown with President Umaru Musa Yar'Adua over a planned move to grant more cement import licenses to importers outside the main industry cartel.
“If the government grants licenses to people to import cement, we’ll close down our factories and lay-off workers; and when that happens, the domestic production capacity will reduce drastically; supply will still not match demand and the prices will even sky-rocket further. My advice is that the president should back-off the cement industry or face the consequences”, Dangote was quoted as warning Yar’adua by an industry source who elected anonymity.

Read more @ http://www.huhuonline.com/newsyard.html

Is dangote the president of nigeria or yaradua?
everything happens in naija

Has anyone told Dangoat that we are in a global economy, where you just don't close down the door for other people just to protect you and avoid competition. The cost of buying, loading, shiping, Customs & Excise Clearance, VAT payment, Unloading, Haulage and storage of an imported cement has already made it not so cheap, of which locally produced one should be able to compete effectivelly if not even selling cheaper.

Dangoat made his money through many years of monopoly importation of so many everyday need commodities like Flour, Sugar,Spagetti, Tomatoe paste and so many others, it wasn't a problem then for him then to worry about locally produced ones against his imported one. Instead of saying he is asking for his usual monopoly policy from govt he is hiding behind a self made war of imported vs local.

If you can't stand the fire, please get out of the kitchen. GM motors and other American home made autos, though struggling against imported good brands like Toyota or Honda but are not calling for their ban from the U.S market or they will layout workers.  How many items in your Dangoat cement is actually locally sourced? From the paper bags to the limestone itself?
Your tone is about blackmail the useless govt to create a monopoly for you or you will layout workers? That is the makes of the socalled northern business genius, I will think so.

The problem is that Dangote is not necessarily manufacturing cement locally

He only has a wider and more organised import operation

The number of people Dangote has employed in his factory is not more than the number of people put out of business as a result of blanket ban on general importation which only gives importation monopoly to Dangote. That to me is a net loss in employment and I have not seen why Dangote's argument gets traction with the Government.

I think another industry we ought to look at is the Textile industry. There is no point banning goods when nobody manufactures anything locally. The facilities needed for local manufacture are not there.
We end up putting more people out of work when we senselessly ban these things.

Yes local manufacturing should be encouraged and where there are credible arguments for a ban it should be encouraged. But a ban which does not gurantee 100% local production of the goods is fraud, a ban which results in more people put out of their means of livelihood than the amount of jobs created is not justified, A ban which does not even result to the product manufactured cheaply and widely available and possibly enough to export makes no economic sense and is certainly not in Nigeria's economic interest.

Since we have no able president, everyone now make decision and gives their opinion.
If there is a more demand than the supply, i wonder why not allow people that are willing to invest in such biz import, govt will make money and people will make money and there might be affordable housing afterall.

When you have a rudderless ship, even a passenger will become a compass on how to navigate the ship.

We do NOT have a leader therefore dangote and his likes can tell
YAR A'CLUELESS what to do or not to do.

In fairness to YAR A'DO NOTHING he must know that the whole Nigerian Economy is based on Monopoly whether it is private or government.

We need a thoughtful, vision based leader who can look into the future and articulate an agenda based on fairness on the common man of this country.

To have a  DUMMY as President of Nigeria in 2009 is the JOKE OF 21st Century. and the whole country to the outside world is a joke, and to Nigerians it is a comedy. Look at all tiers of our Government including the House, they can easily compete with Nollywood and they will get 7 out of 10 awards for Drama and comic relief ( there is too much sufferhead so maybe we need comic relief) , but they should sign up to become comedian without stealing Nigeria monies in the process.

making of the richest person in nigeria.

as for yaradua . . . . lame duck!

Doesn't the federal government have the power to break up monopolies?

oh wait, dangote is one of the big campaign funders.

forget about it

bawomolo:

Doesn't the federal government have the power to break up monopolies?
oh wait, dangote is one of the big campaign funders.
forget about it

It is sad that we have a govt that have to listen to people that only have some selfishness in their hearts.
Yeye govt.

Hopefully, Yar adua has done his research very well because I don't seem to be trusting his advisers so far. As for Dangote, Yar adua should go right ahead and lift the ban while giving those who will transfer technical skills and build their factories in house more leverage. There should also no compromise on inspection of quality. Dangote is a tahtah(baby) that forgot to reinvent himself. I understand his job stuff but many more can come and we can position ourselves to selling in house and off house due to the kind of quality we will boast of not falling houses everywhere we turn.

I dare him to try

Dangote comes across as an amateur. Yar'dua would win this one in my opinion.

While the short run effect may be bad, the long run benefits out-weigh the threats in my opinion. Monopoly sucks and it affect consumers.

ElRazur:

Dangote comes across as an amateur. Yar'dua would win this one in my opinion.

While the short run effect may be bad, the long run benefits out-weigh the threats in my opinion. Monopoly sucks and it affect consumers.

does Yar'adua have enough power to do this. he doesn't have that fiery persona.

bawomolo:

does Yar'adua have enough power to do this. he doesn't have that fiery persona.

Coming out with a fierce persona was never a strong point of Yar'dua. But you have to look at the bigger picture. Dangote's ace up his sleeve is already known, and my first reaction is "So?". Personally, the faith of many should not be left for people like Dangote.

This may be the genesis of his down fall for dangote.

ElRazur:

Dangote comes across as an amateur. Yar'dua would win this one in my opinion.

While the short run effect may be bad, the long run benefits out-weigh the threats in my opinion. Monopoly sucks and it affect consumers.

No matter how Dangote has came across, the problem with Nigerian politics of "god fatherism" is playing here again, yar'adua will not step on some toes and i am sure that he wont wanna step on Dangotes, cos they all see him as the father, i would be glad to see him do it, cos like you mentioned later in one post that, the long run will benefit everyone, however, we all know that Dangote will do all possible to sabotage the moves for his own selfish gain.

bawomolo:

does Yar'adua have enough power to do this. he doesn't have that fiery persona.

yaradua has the power to do it, but does he have the liver to do it?

ElRazur:

Coming out with a fierce persona was never a strong point of Yar'dua. But you have to look at the bigger picture. Dangote's ace up his sleeve is already known, and my first reaction is "So?". Personally, the faith of many should not be left for people like Dangote.

This may be the genesis of his down fall for dangote.

Will be a door opener for other people that wanna get into the biz and i will love to see that happen.
But my take is if, yaradua and his cohort cant fix power problem in Nigeria cos some family are sabotaging it all cos they are the brain behind importation of generators, how do we expect same lame duck punk a$$ to pull this one off.
I will be glad to see him do it though

ElRazur:

Coming out with a fierce persona was never a strong point of Yar'dua. But you have to look at the bigger picture. Dangote's ace up his sleeve is already known, and my first reaction is "So?". Personally, the faith of many should not be left for people like Dangote.

This may be the genesis of his down fall for dangote.

yaradua doesn't seem like a maverick that can take on his own party. i don't see much changing.

bawomolo:

yaradua doesn't seem like a maverick that can take on his own party. i don't see much changing.

I am sure there are some on his party that will be calling yaradua not to start a war he wont live to witness the end

Fhemmmy:

I am sure there are some on his party that will be calling yaradua not to start a war he wont live to witness the end

That is precisely one of the mentality not needed in Nigeria's politics.

Assuming he started a "war" [in my eyes he is doing the right thing] then he died, think of the million of nigerians that would benefit from it.

ElRazur:

That is precisely one of the mentality not needed in Nigeria's politics.

Assuming he started a "war" [in my eyes he is doing the right thing] then he died, think of the million of nigerians that would benefit from it.

many would benefit but our dear yar'adua won't want to mess up his second term chances 

that's the problem with god fatherism.  Yar'adua seems like a decent guy but his hands are tied.

ElRazur:

That is precisely one of the mentality not needed in Nigeria's politics.
Assuming he started a "war" [in my eyes he is doing the right thing] then he died, think of the million of nigerians that would benefit from it.

I so much agree with you.
However, i think the god fatherism needs to stop, the donation from people and organization has to be checked.
People gives money to politicians, cos they know they will get something back from them and cos they know that their interest will be protected.
i will love to see Yaradua starts the fight, at least let him do one thing right

Yaradua be brave for once and BREAK the f**king Cartel, in cement industry, when he finish extend it all other industries and commodity goods market, Oil and gas, Rice, Sugar, Textiles, Flour, e.t.c

Please it is better if Nigeria has 1000 Millionaire to I Billionaire, That was what the new deal did to America, Monopoly destroys economies in the Long run, It stagnates economic growth, We healthy competition in the Nigeria economy and local market.

Players should be encouraged to enter and exit as they wish,

Yaradua there is nothing wrong in picking a fight, just pick a just fight.

You want a man that is so sick like a dog to fight/
The man has gotten not left in him, doesnt have what it takes to do the job.
he is just a lame sucker dog

Fhemmmy:

You want a man that is so sick like a dog to fight/
The man has gotten not left in him, doesnt have what it takes to do the job.
he is just a lame sucker dog

Gosh. Why the focus on his health? He do not need to raise a finger to fight this war you talked about. All he had to do was give the orders and Dangote is toast. Simple.

Dangote has a point! We need a certain level of protectionism for our nascent industries. Even the western countries we're quick to refer to are not as open as they'd like us to believe. But thats conversation for another day.

Let's take a cursorary look at local production and cost of goods. It's certainly cheaper to import than manufacture locally as Dunlop and a few others have come to find out. The recent depletion of our foreign reserves is partly a result of Yar's loose import policy.

Furthermore, with the penchant for imported goods, local industries, the engine room of any nations development, will never get of the ground. What we need is to encourage local competition and not wholesale importation that makes us a major import dependent, consumer nation.

Limiting importation may be what's needed to concentrate minds and grow local capacity as well as stimulate innovation. Maybe through this innovation, we'll finally find a solution to the seemngly intractable challenge of Power supply.

Tell him Dangote!

Yaradua and the minister of commerce are obviously clueless, didn't they give some companies rights to import
cement last year or the year before? what did that do?

when you have businessmen who are investing huge sums of money manufacturing under extreme conditions-
no electricity, bad infrastructure (transportation links), you turn around to give licenses every two year to family members and politicians to manufacture and import, they all end up importing finished goods at artificial prices
adding nothing to the economy and leaving those that are taking the risk to lose in the fiercely competitive market

27 june 2008

To demonstrate this resolve, the government, last week through the Minister of Commerce and Industries, Engr. Charles C. Ogwu, issued import licenses to six new companies to enable them import the product to create availability, accessibility and to force the price down.

The six new companies include; MINAJ Holdings Ltd. Enugu, Madwell Products Sapele, BUA Inter. Ltd. Kano, NICA Ltd. Maiduguri, Reagan Renaissance Ltd. Calabar and MAAN Labadi (Zane cement) Lagos.

It should be noted that before the development, the responsibility to manufacture and import in the sector was left with seven companies, namely; Wapco/Lafarge, Ashaka cement, Benue cement company (Dangote),Obajana cement (Dangote),UNICEM, Calabar, Cement company of Northern Nigeria, Sokoto and DURECHEM, Ogun state.

Speaking shortly after the presentation of the licenses, the Minister of Commerce and Industry, together with the newly licenced companies, assured Nigerians that in the next six weeks or forty days, the price of cement is going to crash down to about N1,150 as against N2,000 in the market.

daily trust

what happended to teh six 'new companies granted licenses last year?

OYB_MEND:

The problem is that Dangote is not necessarily manufacturing cement locally

He only has a wider and more organised import operation

The number of people Dangote has employed in his factory is not more than the number of people put out of business as a result of blanket ban on general importation which only gives importation monopoly to Dangote. That to me is a net loss in employment and I have not seen why Dangote's argument gets traction with the Government.

This is false - Dangote is PRODUCING Cement. Obajana in Kogi State is installed to 4.4m tonnes of cement annually, apart from his other cement producing factories in Nigeria.

Dangote doesn't have importation monopoly, and is not the only producer - there is Lafarge who is investing huge amounts in cement production expansion in Ewekoro. Why do all that if you simply want to open the floodgates of importation? Anyone PRODUCING cement locally is permitted to import, so that includes Lafarge, Sokoto Cement (formerly owned by heidelberg group)  and UNICEM in calabar producing 400,000 tonnes.

The prime cost of cement in Nigeria is transportation and storage - even importation will not remove those bottlenecks.

Again, the government is chasing shadows instead of dealing with the real problem.

Companies given the right to import have  made no difference - suffocating the local producers when our ports cannot even handle other goods sufficiently in order to import cement is daft.

For the record, Dangote has no monopoly with Lafarge, UNICEM, Ashaka cement, Sokoto Cement all producing. The monopoly idea is a myth.

debosky:

This is false - Dangote is PRODUCING Cement. Obajana in Kogi State is installed to 4.4m tonnes of cement annually, apart from his other cement producing factories in Nigeria.

Dangote doesn't have importation monopoly, and is not the only producer - there is Lafarge who is investing huge amounts in cement production expansion in Ewekoro. Why do all that if you simply want to open the floodgates of importation? Anyone PRODUCING cement locally is permitted to import, so that includes Lafarge, Sokoto Cement (formerly owned by heidelberg group)  and UNICEM in calabar producing 400,000 tonnes.

The prime cost of cement in Nigeria is transportation and storage - even importation will not remove those bottlenecks.

Again, the government is chasing shadows instead of dealing with the real problem.

Companies given the right to import have  made no difference - suffocating the local producers when our ports cannot even handle other goods sufficiently in order to import cement is daft.

For the record, Dangote has no monopoly with Lafarge, UNICEM, Ashaka cement, Sokoto Cement all producing. The monopoly idea is a myth.

these are the kind of posts that make me persist with Nairaland in spite of the dross that is prevalent here.
no insults, no personal attacks jsut plain cold facts.
my broda, well done.

tell Dangote that if he shuts down factories, his creditors like BNP and IFC will shut his accounts down

adconline:

tell Dangote that if he shuts down factories, his creditors like BNP and IFC will shut his accounts down

Dangote won't simply shut factories down, but the fact is, we can't just import our way out of this problem. The government has tried importation multiple times and it has failed.

All the vows to 'crash the price' of cement have not achieved anything. Port congestion, poor transportation facilities, poor energy supply and plain greed still exist - till these issues are tackled, you can't do anything about cement prices.

Attacks on Dangote are diversionary - focus on the infrastructural issues and there will be an improvement in prices.

debosky:

This is false - Dangote is PRODUCING Cement. Obajana in Kogi State is installed to 4.4m tonnes of cement annually, apart from his other cement producing factories in Nigeria.

Dangote doesn't have importation monopoly, and is not the only producer - there is Lafarge who is investing huge amounts in cement production expansion in Ewekoro. Why do all that if you simply want to open the floodgates of importation? Anyone PRODUCING cement locally is permitted to import, so that includes Lafarge, Sokoto Cement (formerly owned by heidelberg group)  and UNICEM in calabar producing 400,000 tonnes.

The prime cost of cement in Nigeria is transportation and storage - even importation will not remove those bottlenecks.

Again, the government is chasing shadows instead of dealing with the real problem.

Companies given the right to import have  made no difference - suffocating the local producers when our ports cannot even handle other goods sufficiently in order to import cement is daft.

For the record, Dangote has no monopoly with Lafarge, UNICEM, Ashaka cement, Sokoto Cement all producing. The monopoly idea is a myth.

Are you suggesting that Dangote heats Limestone and Clay in Nigeria. A picture of his ovens and material handling equipments as well as the rest of his production line will be nice.
4.4 tonnes is capacity to hold stock, it does not necessarily confirm 100% local manufacture. These guys import cement in large quantities and Bag them up in Nigeria. Otherwise please post for us a Picture of Dangote's production line in Obajana. All he does is large capacity import and bagging.

I think we have a faulty business logic/model in our country.

Locally made goods should be cheaper than imported goods, if for any reason they are not we should address the reasons why they not rather than banning others from doing business.
Banning imported goods can not be a roadmap to industrialization. If electricity is stiffling local production then  electricity should be sorted out.

The only justification for supporting folks like Dangote or Lafarge over small businesses are
1. if they are creating jobs more than the sum total of everyone else who can go into the business in a liberalised import policy

2. if they are able to manufacture the goods cheaper so that they are readily available and possibly available to export them.

If they are doing neither, to suggest that it makes any business sense or moral sense to put a possible 3000 small businesses out of work and make it more difficult for another 5 million Nigerians to build their homes (due to rising cost of cement) just because an Industrialist who possibly employs less than 200 people in his cement business needs to remain in business is ridiculous.
It is not okay to create an Employment and Housing Crisis just to oil Dangote's business.
That kind of Economics will not get any traction any where else in the World but Nigeria.

I think we need to think carefully before we make commerce policies in Nigeria. For so long we have allowed the argument that "traders are undermining manufacturers" to fester. I reject that argument in its totallity because traders only import goods because there is a  market need for them. The reason there is a need for these goods is because there is no locally made cheaper alternative readily available. Otherwise traders would have been sourcing raw materials either locally or internationally.

If we sort out our electricity, Nigerian workers are not the most expensive in the world. I see no reason why our manufacturers can not compete with low cost goods anywhere in the world in a global economy.  Encouraging a policy where our route to industrialization is by banning every banable goods is to  encourage a lazy Government that refuses to sort out our infrastructural concern. We have tried this for so long it has not worked.

And surely hopes for immaginary Industrialization that never comes to past is not good enough reason to create an employment crisis or any kind of economic hardship, in terms of market cost of goods.

A lot of Factories in Europe have moved to Thailand and Asia, if we sort out Electricity and other Infrastructures global businesses will like to locate in Nigeria. Even South Africa does the same.

The time has come to do away with this argument where we demonise legitimate Businessmen who are only seeking their own means of livelihood in a country where the Government refuses to live up to its promise.

,