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Cement dwarfs peers in non-metallic products sector


News » Business
Nigeria

IMAGE: Dangote Cement plc »

October.20.2014

Cement is leading the chase in Nigeria’s non-metallic products sector, which also includes ceramics, chalk and glass.

Total output in the non-metallic products sector rose from N143.86 billion in the first half of 2013 (H1 2013) to N215.79 billion by the second half of the same year (H2 2013). Similarly,  capacity utilisation in the sector rose 16 percent to 69.9 percent in H2 2013, from 53.8 percent in H1 2013, according to data from the Manufacturers Association of Nigeria (MAN).

The sector also recorded a robust performance in terms of raw materials sourcing, as local input content rose from 79.55 percent in H1 2013 to 91.48 percent in H2 2013.

Investments in H1 2013 within the sector broadly totalled were N323.76 billion in H1 2013, while N4.93 billion worth of investments were added in H2 2013.

“ The cement group , which has been leading the manufacturing sector, has contributed largely to the increases,” says MAN.

Currently, cement capacity of the country has reached about 44 million metric tonnes per annum (tpa). Dangote Cement’s capacity is 29 million capacity, having recently added nine million  to its 20 million tpa.

Lafarge Africa’s businesses, involving the recent combination of its Nigeria and South Africa businesses, now totalled 12 million tpa. Lafarge Africa has major stake  include Ashaka Cement plc and the United Cement Company of Nigeria (UniCem).

In 2010, BUA International Limited, which acquired Edo Cement,  is believed to have a capacity of 2.5 million tpa. BUA signed an agreement for the construction of a $500 million new plant and ancillary projects at Edo Cement situated in Okpella.

On the other hand, the Cement Company of Northern Nigeria (CCNN) is believed to have about 600,000 tpa.

The cement industry is currently robust, dwarfing South Africa’s capacity that stands at 18.3MTs and closing in on Egypt’s 48MTs. Expansion projects among the players are on-going.

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, Real Sector Watch has gathered.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. They also add that eventual outlaw of finished cement importation as well as aggressive infrastructure development around the country have ramped up the growth of the industry. Other stakeholders also concur.

“The backward integration policy of the government along with the strong support of Ministry of Trade, Industry and Investment has been a catalyst for the growth of the cement sector. It should be emulated in other manufacturing sub-sectors as a role model,’’ said Olivier Lenoir, managing director, UNICEM.

Article Credit: Businessdayonline

Updated 4 Years ago
 

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Tags:     Cement     Manufacturers Association of Nigeria     Dangote Cement     Ashaka Cement plc     United Cement Company of Nigeria

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