How Backward Integration Boosts Local Production

THE introduction, 10 years ago, of backward integration policy, which required that cement import licences be allocated only to importers who show proof of building factories for local manufacturing, has helped the country make substantial progress in its march to self-sufficiency.

Alhaji Aliko Dangote, the president of the Dangote Group expressed this view at the inauguration of a new six million-metric ton per annum cement factory in Ibese during the week.

The plant, which was built by Sinoma, a Chinese construction company, is complemented by a 112.5 megawatt plant that was set up by Siemens, a German engineering firm for the Dangote Cement Plc.

Dangote, who commended President Jonathan for attending the event “in person,” also gave credit to former President Olusegun Obasanjo for initiating the backward integration policy, which, according to him, had helped Nigeria move from being a net importer of cement to potential exporter.

The business mogul explained that, since the Group took over the 800,000 metric ton- Benue Cement, it had actually increased its capacity to four million metric tonnes without any technical partner.

He also noted that, with the projected 10.25 million tonnes, Obajana Cement would soon be “on the map as the largest cement plant ever in the world.”

The security challenges not withstanding, Dangote described Nigeria’s current investment climate as the best in Africa, saying that the tax policy, by way of incentives and holidays, either introduced or sustained by the Jonathan Administration had provided a leeway for the Group to make successful inroads into other African countries, with the result that the continent has begun to gain global recognition in manufacturing.

“In line with our long-term vision, we are in 14 African countries and we plan to attain 60 million metric tonnes of cement production by 2014. We are commissioning our plant in Senegal in two months’ time; we are just waiting for the dust of election to settle,” he said.

According to him, producing 60 million metric tonnes within the continent would put Dangote Cement Plc on the list of top eight cement-producing companies in the world.

Noting that the country needs more entrepreneurs in the mould of Dangote, Jonathan thanked the company for its contributions to national development and economic growth.

Ogun State Governor, Ibikunle Amosun, who described Ogun as the highest cement-producing state in the country, urged Dangote Cement Plc to impact lives in the host community and the state in general. He, specifically, requested that connecting roads should be reconstructed with concrete as the Group did in Obajana, Kogi State.

In attendance were serving and former state governors, lawmakers and traditional rulers, as well as captains of industries.

http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=76814:nigeria-set-to-become-cement-exporting-nation--dangote&catid=1:national&Itemid=559

Nice !!!

with Innoson car and tyre production and dangote export not only cement in the nearest furture but also sugar among others.

Things are finally going to the right places in Nigeria.

It remains the following for the FG to do and her name would be in history lik OBJ

1. Favourable policies for Innoson motors, (reduce our import of cars and tyres by 50-70 %) and grant them loans

2. Build a refinery for NNPC and try to push Onado to build on as well or build one for them and collect a certain % of their profit.

3. Invest in Nollywood

4. More policies to favour Hitv and Globacom.

etc. Lastly constant electricity.

Unless he plans 2 sell cheaper than the Chinese, I see his businesses not surviving true federalism in Nigeria, his monopolistic favours gone. And his businesses only thrive in Nigeria because of monopoly he had and systematically still has,


On a hustlers scale, he can't sell more pepper than Iya mulika in Oshodi Take away his political favours and see Nigerians that are binaries business minded people thrive better than this mediocre corrupt hustler,

Dangote is not a business man, he is a politician, And one that dat won't dare stand for what is right,

Export Cement ko, import obajana ni ,

This same idiot has been using corrupt officials to get limestone deposits across the nation, Even when government was giving out loan for cement manufacturers to stop importing and set up plants in Nigeria, this nama was still importing for 2 more years even after his plants were ready, Cement is $400 if imported but 1500 if bought from Nigerian manufacturers

This biatch nigga can't be serious at all, Export ko, Pray the embargo on cement importation is not lifted, You'll either sell for cheap or close down your plants, Freaking unsophisticated animal,

alj harem:

Nice !!!

with Innoson car and tyre production and dangote export not only cement in the nearest furture but also sugar among others.

Things are finally going to the right places in Nigeria.

It remains the following for the FG to do and her name would be in history lik OBJ

1. Favourable policies for Innoson motors, (reduce our import of cars and tyres by 50-70 %) and grant them loans

2. Build a refinery for NNPC and try to push Onado to build on as well or build one for them and collect a certain % of their profit.

3. Invest in Nollywood

4. More policies to favour Hitv and Globacom.

etc. Lastly constant electricity.

Export Sugar to where? Dangote can't compete in international market unless he goes and corrupt the government of other countries, Also, he can't beat the honest business men across the world who sell quality for cheap without government favours, Dangote won't survive in Nigeria without the corrupt politics and monopolistic favours he gets, Take away his political favours and you'll have a business man wannabe as the richest black man, 50% is a better business man than Dangote,

But haters plenty for here ooo

@ 0lumide:

I agree with your assertions. I fail to see how his business model can compete on the global market. Please be kind enough to consider changing your tone. A lot of posters will feel you have something personal against Dangote. This may dilute the message you are trying to send across.

we need more big boys like Dangote in naija.

I just am not comfy with one man monopolising cement production in this country. Cement just like steel is among the bedrock of modern civilisation. That's a lot of power! No wonder the man can afford to bankroll the elections of two naija presidents

Dangote is more of a politician than a business man and we know why :      corruption.

[b]Big Jokers!!! When they haven't satisfied local demand.
Who is deceiving who I'm not Goodluck.  [/b]

Does anyone know the current price of 50kg bag of portland cement please?, dangote,lafarge etc pls

russellino:

I just am not comfy with one man monopolising cement production in this country. Cement just like steel is among the bedrock of modern civilisation. That's a lot of power! No wonder the man can afford to bankroll the elections of two naija presidents

sir pls if you are not satisfied, why dont you open your own cement factory so you can compete with him. he's got the money to do whatever he wants to do.

Alj Haremmmmmmm, how much is the price of 50kg bag of portland cement,

Yeske!:

Dangote is more of a politician than a business man and we know why :      corruption.

okay, so whats the problem?

Ask those critising Dangote what they have done today to Contribute to the progress of this great Nation, and you will discover they have done nothing!
That is why Nigeria will remain the way it is.
Call Mike Adenuga's name, they will have something negative to say, mention Otedola, they will say something, oya you do now. They will complain. Bunch of Haters!

dangote cement is #1900 as at this morning while cotonou is selling #820 as at this morning, why FG government don't allow us to buy from neighboring countries If is not politics?

Dangote manufactures his own cement and imports some, Eagle cement has been importing since 1996 that I went to setup their fiber network in PH, people just love to yarn for the sake of it, he might lobby government but he has done far more for Nigeria than some other people, the Shell and Chevron of this world are ripping us off and messing up our environments, please cut the guy some slack.

Those price is for 50kg bags.

Dangote is doing good but our politicals are the ones to blame. Jonathan had once said in last year that he will ban dangote cement if the price is not come down,but when they sat in round table,since then they are close friends and nigerians hear nothing about it again.

how you plan to export cement when the same dust is cheaper in most part of the world?

Those of you who are complaining about dangote being favoured by government why dont you setup your own maufacturing plants,employ thousands and see if government wont favour you too. You just have to give credit to the man.

@Babaowo,,,



dangote cement is #1900 as at this morning while cotonou is selling #820 as at this morning, why FG government don't allow us to buy from neighboring countries If is not politics?,

Are you serious about this or is it another joke,if its true,i,ll be going into smuggling [left][/left]

slam7000:

@Babaowo,,,



dangote cement is #1900 as at this morning while cotonou is selling #820 as at this morning, why FG government don't allow us to buy from neighboring countries If is not politics?,

Are you serious about this or is it another joke,if its true,i,ll be going into smuggling [left][/left]

what do you expect. Capitalist regime - Capitalist policies!!!

@ Acidosis - the people who tried to set up cement factories like cletus ibeto were cut down ruthlessly by OBJ to allow dangote free rein to monopolise the cement industry, abi u no know?

Please my friends here stop hating Dangote; He is a blessing to Nigeria. People like him developed American and European economies.
Lafarge and others are also producing Cement in Nigeria. Lafarge was the organisation that complained about IBETO, because Ibeto was and still only re-bagging cement against an instruction from the FG that they should start local production. They were sanction for not having a plan to produce locally. By the way, he is not a monopoly as i would demonstrate with the following products of the company; Lafarge, Eatern Bulkcem and other also produce Cement. For Noodles, Indomie, Chikki, Tummy and the rest also produce. For Pasters: Nigerian Flour mills, Vallumbra are competing. For Juice, there are too many too numerous to mention. Sugar: Anybody can produce locally or import as he wishes.

I feel sick when i see the way people insult INNOSON, ZINOX, DANGOTE, OANDO e.t.c and their owners for being monopolistic; for God's sake they can use their influence to get all the money and invest the money abroad. There are too many examples of those who steal our money to invest abroad.

Please lets thank them for using their influence to create jobs and opportunities for Nigerians all over.

russellino:

@ Acidosis - the people who tried to set up cement factories like cletus ibeto were cut down ruthlessly by OBJ to allow dangote free rein to monopolise the cement industry, abi u no know?

you guys just spew lies, smaller fishes keep blaming the bigger fish for not being able to feast on fingerlings


Ibeto n co got license, just search here on nairaland, these guys were rejoicing on getting extra allowance n being able to compete with dangote, but it was obvious they were only interested in trading, whilst dangote was importing and setting up mega factories these lazy business men dont want to create jobs in nigeria, they are only into importing and that is limiting the amount they can sell, its simple the more your factory in nigeria produce, the bigger your import allocation, the system is not perfect dont blame dangote for wining both ways!

I bought 50 bag of dangote cement this morning @ N1900 per bag plus N50 per bag for transport. If it is true a bag of 50kg sells @ cotonue for N850 then we are being seriously shortchanged.

@ Amalaaba -

At the time ibeto cement was shut down, 80% of all cement consumed in nigeria was imported and bagged because local production capacity was too low to meet demand.

As for lafarge, Lafarge is the Lease Manager of the Onigbolo Cement Factory, owned by the governments of the Benin Republic (51%) and Nigeria (43%). Lafarge, which has no single share in this partnership, has become the main beneficiary of that investment. This is achieved through manipulating the loophole that allows Lafarge to import cement duty-free from Benin Republic, which is an ECOWAS member country. The Onigbolo plant has become a clever conduit for cement to be brought in from overseas and laundered through the Onigbolo plant and then pushed into Nigeria, duty free, under cover of the ECOWAS protocol. This is why Lafarge is able to import so much cement into Nigeria from this tiny Benin plant with the claim that the plant is producing at full capacity.

Dangote, Nigeria’s largest importer of bulk cement, has four bagging plants in the country: the Lagos Cement Terminal at Apapa Port, the Aliko Inland Terminal at Lagos, one in Onne/Port Harcourt and one in NPA Area 1 Port Harcourt with a combined production of 3 million MT per annum. With its overriding influence on the Obasanjo regime, Dangote Cement always managed to seize cement import quotas of between 6.5 and 9 million MT per annum. Keeping hold of so much import quota enabled Dangote to limit what was available to other operators. Dangote regulated how much of their cement import quota to use and when to use it and so has successfully been manipulating market prices.

Sorry guy for deviating from your discourse but I need your help. How can I see nd check list of 2011/2012 remedial programme of Unilorin. Thanks nd God bless you

Future tense talk.

0lumide:

Unless he plans 2 sell cheaper than the Chinese, I see his businesses not surviving true federalism in Nigeria, his monopolistic favours gone. And his businesses only thrive in Nigeria because of monopoly he had and systematically still has,


On a hustlers scale, he can't sell more pepper than Iya mulika in Oshodi Take away his political favours and see Nigerians that are binaries business minded people thrive better than this mediocre corrupt hustler,

Dangote is not a business man, he is a politician, And one that dat won't dare stand for what is right,

Export Cement ko, import obajana ni ,

This same has been using corrupt officials to get limestone deposits across the nation, Even when government was giving out loan for cement manufacturers to stop importing and set up plants in Nigeria, this nama was still importing for 2 more years even after his plants were ready, Cement is $400 if imported but 1500 if bought from Nigerian manufacturers

This biatch nigga can't be serious at all, Export ko, Pray the embargo on cement importation is not lifted, You'll either sell for cheap or close down your plants, Freaking unsophisticated animal,

.

You are a bitter and envious man! You condemn Dangote for not selling cement cheaper that the Chinese? Is Nigeria China where slave labor and slave wages are the norm? Can Nigeria compete with China in infrastructure? How can cement be cheap when cement manufacturers have to generate their own power, build their own roads, build their own water treatment plants and still spend socially on nearby communities?

The problem is you guys want to export jobs and scarce forex to China when there are millions of unemployed Nigerians simply because of your greed. You want cheap Chinese goods so you can make more profit! I support the backward integration policy. It is unfair to subject manufacturers in Nigeria to importers of goods from China. Look at all the textile manufactuers that importers have destroyed with attendant huge loss of employment . If you want to sell cement, set up your own factory and compete with the existing manufacturers. . that would be fair competition.

There must something this man is doing right that 150 million Nigerians are not doing. He is investing and adding value while they prefer buying and selling. Why will any government in power not support a man who is the highest employer of labor in the country after the FG? If I was president, I will support him Look at a man like Ibeto. he has been importing bulk cement forever and has yet to spend a kobo on building his own cement manufacturing plant. If the government bans cement import tomorrow, he will start crying that some cabal somewhere conspired against him.

Be like Dangote, put your money where your mouth is, build your cement plant and see if the government will not give you tax holidays, capital equipment import waivers etc.