The Nation Newspaper

Tag: cement

  • Operators decry planned increase of cement price

    Operators decry planned increase of cement price

    A Group, the Building Collapse Prevention Guild (BCPG) has alerted President Bola Ahmed Tinubu on the planned increase of cement price by some manufacturers and importers.

     A statement signed by its National President, Sulaimon Yusuf and General Secretary,  Adenike Ayanda said that cement manufacturers were planning an upward review of cement prices by early January.

    The group with membership across the seven Built-Environment platforms stated further that plans were also on the way to increase the price of ready-mix concrete in addition to jerking up the cost of in-situ production of concrete.

     They warned that if the increment is allowed to take place, the economic situation of the nation will worsen.

     The statement reads: “Cement is an essential ingredient in the production of buildings. Frequency in the increase of its price has impacted negatively on the nation’s housing sector. Experience has shown that high prices of cement tend to encourage reduction in the quality of building production. The consequence of this is the emergence of weak buildings that intensifies the occurrence of building collapse.”

    The group appealed to President Bola Ahmed Tinubu to invite cement manufacturers for an urgent discussion in order to forestall the impending price increase.

     BCPG asked the president to interrogate the current N5,700 market price of a 50kg bag of cement despite the N3,500 price of the product recently promised by one of the cement manufacturers.

     According to them, any further increase in the price of cement will be a direct threat to the ‘Renewed Hope’ Housing Programme of the Federal Government.

    Read Also: Military neutralises 43 terrorists, arrests 115

     “The completion of ongoing building projects might be jeopardised by this impending hike, buildings abandoned during the process of construction aggravate the risk of building collapse, with the dwindling purchasing power; new buildings might lack patronage and occupants due to high rental value”.

    “Efforts made by President Tinubu while he was Governor of Lagos State at attenuating building collapse syndrome were well documented in the BCPG records. As at the time he rounded up as the Governor of Lagos State in 2007, the market price of cement was N1, 300”.

    They challenged the president not to relent in his past efforts at tackling the incessant collapse of buildings adding that his wealth of experience from Lagos on solutions to building collapse should be brought to bear on the national level to save Nigeria from the unenviable position of a nation that records frequent incidence of building collapse in the whole world.

    They urged President Tinubu to pay serious attention to resolving the challenges of building collapse adding that frequent increase in the price of cement is one of the challenges.

  • Cement Monopoly: Appeal to PBAT 

    Cement Monopoly: Appeal to PBAT 

    • By Kexter E.A Donald Jr.

    Sir: In the heart of our nation, a pressing issue demands our immediate attention – the cement production monopoly that has come to define the industry. Dangote Cement, Lafarge Africa, BUA Cement, and Cement Company of Northern Nigeria (CCNN) stand as the primary drivers, wielding immense influence over pricing and supply. This situation stifles competition, limits choices for consumers, and leads to inflated costs that ripple through various sectors of our economy.

    The consequences of this cement monopoly are far-reaching with perhaps none more evident than the burden it places on the housing market. Rent costs continue to skyrocket, leaving many Nigerians struggling to afford decent, safe housing. This is not just an economic issue, but a matter of social justice and equitable access to a basic human need.

    What further compounds this crisis is the concerted effort by the dominant players to stifle any potential competition. They employ their influence to impede the issuance of licenses to new entrants in the cement industry. This predatory behaviour undermines innovation and stifles the entrepreneurial spirit of Nigerians who seek to contribute to the nation’s economic growth.

    Read Also: N2.17tr Supplementary Budget will be judiciously applied – Tinubu

    Mr. President, we are at a critical juncture where the need for action is paramount. I implore you to consider the profound impact that breaking this cement monopoly could have on Nigeria’s economic landscape. By issuing licenses to new entrants, we not only foster healthy competition but also empower a new generation of entrepreneurs to contribute meaningfully to our nation’s growth.

    This is not just an economic matter, but a call for justice and fairness. It is about providing every Nigerian with a fair chance to thrive and contribute to our great nation’s prosperity. It is about dismantling a system that prioritizes profit margins over the well-being of our people.

    I believe, Mr. President, that with your leadership and vision, we have the opportunity to bring about transformative change in this crucial aspect of our economy. Together, let us pave the way for a future where every Nigerian can build their dreams without the weight of economic oppression.

    I humbly urge you, Mr. President, to take this matter into consideration and use your esteemed office to initiate the necessary steps towards dismantling the cement monopoly in Nigeria.

    •Kexter E.A Donald Jr. 

    Kexddy@gmail.com

  • Ogun group urges NASS to speed up passage of geological, cement studies college bill

    Ogun group urges NASS to speed up passage of geological, cement studies college bill

    A group, Ketu Advancement Forum (KAF) has urged the National Assembly to speed up the passage of the bill seeking the establishment of the Federal College of Geological and Cement Studies at Iselu town in Yewa North area of Ogun State.

    In a letter of appreciation addressed to the Senator representing Ogun West Senatorial district, Solomon Adeola, and signed by the group’s Coordinator-General, Kunle Abiose, and Secretary-General, Dotun Adeleye, the group commended Senator Adeola for sponsoring the bill which recently passed its first reading at the Senate.

    Read Also: Sit-at-home has left Southeast empty, says Deputy Speaker

     The group noted that the passage of the bill and establishment of the college would engender industrial growth and youth empowerment development.

    The letter read in part: “This is more fitting for Iselu and Ketuland with their preponderance of limestone deposits, which is one of the largest in Nigeria.

    “It is on this note that we like to fervently urge you to deploy all your legislative sagacity at mobilising members of both chambers of the National Assembly to kindly support the speedy passage of the bill and the establishment of the college,” the letter partly read.

  • ‘Consider Southwest in cement price reduction’

    ‘Consider Southwest in cement price reduction’

    The umbrella body of bricklayers in Nigeria, the Nigeria Bricklayers Association, has appealed to the Federal Government and the management of BUA Cement to consider the Southwest market in the price reduction of their product.

    The President, Mr. Oyebamiji Dauda, said the announced price reduction of cement is not yet enjoyed by people in the Southwest because of the cost of transporting the product from the factory, which is based in the North.

    He told reporters at the weekend in Lagos while lamenting the price disparity faced by bricklayers in the South, compared to the cost announced to the public by the company.

    He said: “This price disparity has caused members of the association hardship and trust issue between them and their clients.

    Read Also; Tinubu mourns prominent corporate lawyer, Ogunbanjo

    “I appeal to the Federal Government to look into this matter. The management of BUA should also look into the price reduction announced recently. It is becoming an embarrassing issue, our clients don’t want to pay the actual price anymore, they claim the cost has been reduced, whereas the particular product they are referring to has not arrived at our market here in the South.”

    “I recently visited the office of the cement producer in Lagos. We explained the price disparity to them, but they told us that they have two factories at the moment, one in Sokoto and the other in Edo, but the cost of transporting the product down to the market is high. This is why the cost is still high in the market.  

    “We thank the cement manufacturer for the initiative to alleviate the pains of stakeholders by reducing the cost. However, we appeal to other manufacturers to take a cue from the initiative of BUA so as to avoid the drought of artisans being witnessed in the sector.”

    In recent time, the price of cement has seen a significant increase from N3, 500 to as high as N6,000 in some parts of the country, forcing up construction and manufacturing costs. 

    BUA Cement, a subsidiary of BUA Group, recently announced a reduction in the price of their cement from N5,000/N6,000 to N3,500 per bag.

  • Cement blues

    Cement blues

    • Players should explore prospects of more business rather than cry wolf over price

    Recent announcement by Minister of Works David Umahi that all federal roads will henceforth be built with concrete for better durability, should have buoyed operators in the cement industry.

    But the Cement Producers Association of Nigeria (CPAN) has let fly  a jeremiad, claiming such a move could propel prices of grades of cement to N9, 000 and above, especially during the dry season when construction peaks.  A bag of cement now hovers around N6, 000.

    The CPAN stand sounds illogical.  Higher demand for cement should, other things being equal, mean bigger opportunities for everyone: the market leaders that control the largest market share, and even marginal players at the fringe. Still, CPAN insists other things are not equal with the market as presently constituted. 

    First, the group worries about the supply side: that federal roads gobbling up cement could trigger a sudden scarcity which could trigger rocket inflation.

    That point is well taken — and it is good CPAN coupled its alarm with a possible solution: first pondering the supply side before fully pushing the policy. Still, CPAN should have pushed its fear with vivid numbers: total volume of locally manufactured cement right now, the proportion federal concrete roads will likely gulp, and the projected shortfall for housing and allied sectors also thirsting for cement. That would have painted a graphic picture, thus advising government to look before it leaps.

    But again, the point must be made that infrastructure is critical to deepening the economy and getting Nigeria out of current throes — a cardinal goal of the Bola Tinubu administration.  Good, durable roads are central to that goal. So, whatever support, in terms of helpful policies, the government can offer the industry to boost production and achieve its goals are welcome.  But marginal cement players should also tap into long-term loans from specialized industry banks, home and abroad, to raise their capital base and expand their production capacity. 

    Read Also: How to prevent Military rule in Africa, by Ganduje

    That way, both major and fringe players would be propped for the boom to come.  If the supply side is fixed and production vastly expanded to meet demand, then prices should drop.

    But spiralling prices, even with no apparent shortage, prompted the second leg of CPAN’s complaint — the capture of the market by a cement oligopoly that allegedly ratchets up the pricing.  That was the main CPAN bait for its projected soar-away cement price of N9, 000 per bag soon as the new concrete road policy starts.

    Indeed, there are claims that a few players swallow up the cement industry and dictate prices as they please.  Nigeria hardly imports any cement.  In fact, Nigerian cement market giants have been expanding to other African countries. Yet, cement price locally has always headed north — more so in a country that boasts large deposits of limestone, the major raw material for cement manufacturing.

    Might this anomaly have arisen from the capture of the market by a few, leaving the many other players to dive for crumbs or die?  Structurally, might the market have badly evolved, such that only the alleged oligopolies are always in business, leaving the others with the short end of the business stick? From its cry, CPAN must have feared — even if it didn’t specifically say so — that even with the new concrete road regime, only the alleged oligopoly would get most  (if not all) of the business, leaving the marginal players almost empty-handed.

    If that is so, government should probe into it and earnestly remedy the situation.  Every market has dominant and fringe players.  But market forces propel even fringe players to milk their niche, even if their market share is small. Government should discourage monopolistic practices that empowers the strong to unfairly elbow out the weak. A free market is the only way cement pricing can find true equilibrium.  To protect that sanctity is why governments in the West enact strong anti-trust laws. Nigeria needs such a law, if CPAN’s complaints are confirmed.

    Still, CPAN was clearly out of focus by suggesting that the government should, at least for now, stay with a mishmash of concrete and tar in its road policy. To be sure, it can suggest policy options. But it’s rather strange that CPAN that in one breath decries not having enough business opportunities, in another breath shuts out the prospects for market expansion that should benefit its members. 

    Whining and conjuring a price Armageddon chisels away at CPAN’s integrity as a serious trade lobby. Instead on pontificating on issues hardly its business, it should prime its members to grab a bigger share in an expanded cement market.

  • Cement producers seek measures to cut commodity’s price

    Cement producers seek measures to cut commodity’s price

    • Association urges Fed Govt to break monopoly in sector

    The Cement Producers Association of Nigeria (CEPAN) has urged President Bola Ahmed Tinubu to address the hike in cement price and break the monopoly a particular cement manufacturer has been using against the interest of the people.

    The union said this is the major step the government should take urgently to ensure rapid infrastructure development across the country.

    It also urged the Federal Government to expand participation in the sector with other companies that have evidence of local investment, including Greenfield licences and quarrying and specifically conclude the backward integration policy of the late Umar Yar’Adua administration which was already favouring the sector.

    In a joint statement by CEPAN Chairman, Prince David Iweta, and the National Secretary, Chief Reagan Ufomba, the association maintained that Nigeria has the highest price of cement in the world. 

    CEPAN said Nigerians should not be buying a bag of cement at over N5,600, a development the association said it predicted over 12 years ago.

    The association said it would be difficult to address Nigeria’s housing deficit, which requires over N21 trillion.

    “The worsening roads network, low income per capita, low spending power, over-deregulated currency, and gas regime but with a heavily regulated cement supply structure results in a supply gap of over 20 million metric tonnes. It is unthinkable and unacceptable that three companies can satisfy the cement needs of over 200 million Nigerians. 

    Read Also: ‘Continuity of business enhancement commendable’

    “To better understand the crisis is to better appreciate supply trend, which has constantly resulted in the hike in cement prices. Government must intervene now and not misconstrue installed capacity with actual production capacity. 

    “Our findings from various parts of the country show that cement sells for as high as N6,000 per bag in the rainy season. Our prediction is that it will sell for over N9,000 per bag in the dry season, especially with the pronouncement of the Honourable Minister of Works on cement technology and the marching order on housing by Mr. President, if government does not take proactive steps,” CEPAN said.

    The association urged the Federal Government to reintroduce backward integration policy and conclusion of the old ones.

    It said the government needs to place emphasis on cement technology and asphalt pavement to “provide ample time for a smooth transition that allows contractors to invest in commensurate and requisite equipment and retooling”.

    CEPAN added: “We must, as a nation, regulate static and dynamic load traffic by introducing weighbridges at access points on our highways.

    “Government should urgently intervene in the foreign exchange market, intervene in restructuring bad loans of manufacturers, and review palliative modules. The cry for elusive FDI (foreign direct investment) will be drastically reduced if all manufacturing concerns are revived.

    “Government must be decisive in the kind of economic policies it intends to foist on the people. There is need for policy harmonisation and convergence between fiscal and monetary policies.” 

  • Playing ping-pong with cement prices

    Playing ping-pong with cement prices

    • By Aliyu Abdulmalik

    The chairman of BUA Group, Abdul Samad Rabiu, recently said his BUA Cement Company would soon crash the price of cement. Good news. He said this just after his meeting with President Bola Tinubu. Ordinarily, this should stir a fountain of optimism, even joy, among Nigerians. Nay, it hasn’t.

    There is overwhelming reason never to bank on such promise of a better tomorrow for builders. Life teaches that there are times to believe the message and discount the messenger. At other times, you are admonished never to believe both the message and the messenger. This is such a time in the case of price crash sermons.

    First, this is one promise too often. In almost all instances, such a promise ends up a mirage. Broken promise, broken hope with a trail of despair. Almost every year since 2016, BUA had made a pledge not to increase the price of cement. On all occasions, the company had defaulted by jacking up the price of its cement. Why this irks is that nobody has put undue pressure on the company to commit to hyping its intent to crash the price of cement. This is usually after its management has had a meeting or about to meet with shareholders or when its top executive(s) meets with a senior government official.

    This consistency in raising the hope of the people with imminent price slash of a critical product like cement only to dash such hope by doing the opposite smacks of pretentious altruism. You do not continue to make a particular promise and keep reneging on such promise and expect the public to still believe you. This is what BUA is doing, a worrisome act of playing to the gallery just to wear the garb of benevolence.

    Read Also: Police kill three suspects planning sit-at-home enforcement in Enugu

    Rabiu, by every measure, is a successful entrepreneur; a great employer of labour and astute creator of wealth and value. He and his Group have done a lot to uplift humanity, bolster the economy and sustain living and livelihood in many homes, but they must learn to respect the sensibilities of the public. Raising the hope of the public and bursting such hope in the most cavalier manner and at such dizzying frequency amount to total disrespect of the same people you claim to comfort. Such pattern of corporate behaviour is unacceptable. It is simply an exercise intended to inflict pain on a people in the guise of bringing them succour.

    Pray, did BUA not assure Nigerians in 2019 that it would crash the price of cement? That was an assurance it gave to shareholders at the company’s Annual General Meeting, premising its promise on the company’s plans to sign an agreement with a Chinese firm for the construction of three new cement plants of three million metric tons per year in Edo, Sokoto and Adamawa states all of which will be completed by the end of 2022. Did this happen? Never!

    Again, did this same BUA, without any prompting, on June 18, 2021, via a press statement, not announce that “as a responsible corporate entity”, it will not be part of a decision to increase price of cement? What happened afterwards? BUA increased the price of its brand of cement barely two weeks after the “responsible corporate entity” show of ‘goodwill.’

    Truth be told, BUA is playing to the gallery obviously in the hope to attract public goodwill or to be seen as a people-oriented corporate entity. But it is adopting a wrong strategy towards achieving this. Rather than being perceived as public-spirited and consumer-centric, BUA is publicly perceived as deceptively toying with the emotions of the consumer. Wilfully raising the hopes of the people through marketing sophistry is to do incalculable damage to their psyche.

    Just think of those who had made their building plans on the basis of BUA’s promises. Think of what became of such plans. Predicting the net effect is no brainer: a plethora of abandoned building projects, a corrosion of public trust in corporate entities. It’s a long list of woes.

    The conglomerate will serve humanity better and more sincerely when they reduce the price of flour, sugar and other consumables from their stable. Nigerians do not eat cement, but they consume sugar, flour, noodles, spaghetti and allied products produced by the BUA Group. Nigerians will be happy, indeed very happy, if the prices of the afore-listed products are slashed especially at these times of biting pangs of fuel subsidy removal when many homes are in dire need of palliatives.

    And you just wonder why BUA would be so fixated on playing ping-pong with cement prices while maintaining a deafening silence on the price of flour.  It’s not in every home that cement is in demand every day. But every day, in every home in Nigeria, flour is consumed in different ways as bread, sundry confectionery, noodles, spaghetti, and etcetera. Our avuncular Rabiu should focus on reducing the price of flour if truly he loves the people. The pervading hunger in the land makes such demand on him. But will he, and has he?

    A few statistics tell the story lucidly. In the last two years alone, BUA has increased the price of 50kg bag of its flour by 135 percent, from N13,200 in January 2021 to N31,000 in June 2023. Now, you know why the good old bread, including the easily affordable and always available Agege Bread, is fast disappearing from the menu in many homes on account of their soar-away prices.

    The increase in the price of flour hurts more than any jack up in the price of cement. As I write this in my Kano home, and look out the window, I see hordes of people trekking, not as a form of keep-fit routine, but on account of their inability to afford transport fare to their destination. Worst of it all, Gurasa, a local and once-upon-a-time easily affordable delicacy made from flour, has disappeared from the dining table of many homes in Kano. Because of the incessant increases in the price of flour, Gurasa has been priced out the mouth of the ordinary folk, forcing members of Gurasa Bakers Association to go on strike at a time.

    Our good-natured brother, Rabiu, should think less of cement and focus on how he will crash the price of flour, a commodity that is a staple in every home. That is more humanitarian and morally dignifying than his ceaseless toying with the price of cement.

    • Abdulmalik writes from Kano.

  • Cement, healthcare companies to raise N240b new capital

    THE country’s largest cement and healthcare manufacturing companies are planning to raise N240 billion new capital to grow their businesses.

    The two largest cement companies – Dangote Cement Plc and Lafarge Africa Plc – and two leading healthcare companies – Fidson Healthcare Plc and May & Baker Nigeria Plc – have launched the new capital raisers. They are expected to conclude the supplementary issue by the fourth quarter of the year.

    Dangote Cement, Nigeria’s most capitalised quoted company and Africa’s largest cement producer, is raising N150 billion in debt capital.

    The company has concluded the first tranche of the N150billion, raising N50 billion in new debt capital.Dangote Cement issued commercial papers of 180 days and 270 days’tenors with effective yields of 13.21 per cent and 13.96 per cent.

    According to the company, the net proceeds from the deal would be used to finance capital expenditure, working capital and  corporate purposes.

    Lafarge Africa Board has also approved a right issue of up to N82 billion to reduce the company’s leverage as well as strengthen its profitability.

    Earlier, Lafarge Africa shareholders approved a resolution authorising the company to raise more capital of up to N100 billion as the cement group continues to optimise its balance sheet.

    Lafarge Cement shareholders mandated the  Board to raise more capital through an offer of debt or equity or a combination of the two  from local or international capital market. Last year, the cement company raised N131.6 billion from a rights issue, which was oversubscribed.

    Fidson Healthcare is raising N4.5 billion new capital from new ordinary shares to its shareholders.

    The Nigerian Stock Exchange (NSE) has approved the rights issue, paving the way for the company to open application list for the offer.

    Fidson Healthcare will issue 900 million ordinary shares of 50 kobo each to shareholders at N5 per share. The rights issue will be pre-allotted on the basis of three new ordinary shares for every five ordinary shares held as at the close of business on July 5.

    Shareholders of Fidson Healthcare last year approved a plan to raise N6 billion to boost its working capital and support its expansion. Shareholders had authorised the board of directors of Fidson Healthcare to “raise further capital of up to N6 billion through an offer whether by way of public offering, rights issue, private and special placement of shares”.

    Shareholders also authorised the directors to absorb oversubscription and to convert existing loans due to any person from the company towards payment for any rights or shares subscribed for. Shareholders increased the authorised share capital from N1.2 billion to N1.5 billion by the creating more 600 million shares of 50 kobo each.

    Fidson Healthcare Plc Chairman, Mr. Felix Ohiwerei, said the new capital would be used to boost working capital that had been negatively impacted by the depreciation of Naira.

    He noted that the company’s new factory had come on stream and that it needed more capital to realise the full potential and utilise the new factory to full capacity.

    Sources confirmed to The Nation  that May & Baker Nigeria has advanced discussions on its much-awaited rights issue.

    Its shareholders earlier this year voted to increase the company’s share capital from N1.9 billion of 3.8 billion ordinary shares of 50 kobo each to N3 billion of six billion ordinary shares of 50 kobo each. It has a subsisting shareholders’ approval to raise N3.2 billion.

    Earlier this year, May & Baker Nigeria Chairman Lt.-Gen. Theophilus Danjuma (rtd), told shareholders that company’s directors believe that the time was right to raise the funds to enable the company harness new opportunities.

    “Therefore, our rights issue will soon open and I hope shareholders will take up their rights to support our company in achieving its new vision. We shall all reap the rewards in the immediate future and beyond,” Danjuma said.

  • Cement, healthcare companies to raise N240b new capital

    THE country’s largest cement and healthcare manufacturing companies are planning to raise N240 billion new capital to grow their businesses.

    The two largest cement companies – Dangote Cement Plc and Lafarge Africa Plc – and two leading healthcare companies – Fidson Healthcare Plc and May & Baker Nigeria Plc – have launched the new capital raisers. They are expected to conclude the supplementary issue by the fourth quarter of the year.

    Dangote Cement, Nigeria’s most capitalised quoted company and Africa’s largest cement producer, is raising N150 billion in debt capital.

    The company has concluded the first tranche of the N150billion, raising N50 billion in new debt capital.Dangote Cement issued commercial papers of 180 days and 270 days’tenors with effective yields of 13.21 per cent and 13.96 per cent.

    According to the company, the net proceeds from the deal would be used to finance capital expenditure, working capital and  corporate purposes.

    Lafarge Africa Board has also approved a right issue of up to N82 billion to reduce the company’s leverage as well as strengthen its profitability.

    Earlier, Lafarge Africa shareholders approved a resolution authorising the company to raise more capital of up to N100 billion as the cement group continues to optimise its balance sheet.

    Lafarge Cement shareholders mandated the  Board to raise more capital through an offer of debt or equity or a combination of the two  from local or international capital market. Last year, the cement company raised N131.6 billion from a rights issue, which was oversubscribed.

    Fidson Healthcare is raising N4.5 billion new capital from new ordinary shares to its shareholders.

    The Nigerian Stock Exchange (NSE) has approved the rights issue, paving the way for the company to open application list for the offer.

    Fidson Healthcare will issue 900 million ordinary shares of 50 kobo each to shareholders at N5 per share. The rights issue will be pre-allotted on the basis of three new ordinary shares for every five ordinary shares held as at the close of business on July 5.

    Shareholders of Fidson Healthcare last year approved a plan to raise N6 billion to boost its working capital and support its expansion. Shareholders had authorised the board of directors of Fidson Healthcare to “raise further capital of up to N6 billion through an offer whether by way of public offering, rights issue, private and special placement of shares”.

    Shareholders also authorised the directors to absorb oversubscription and to convert existing loans due to any person from the company towards payment for any rights or shares subscribed for. Shareholders increased the authorised share capital from N1.2 billion to N1.5 billion by the creating more 600 million shares of 50 kobo each.

    Fidson Healthcare Plc Chairman, Mr. Felix Ohiwerei, said the new capital would be used to boost working capital that had been negatively impacted by the depreciation of Naira.

    He noted that the company’s new factory had come on stream and that it needed more capital to realise the full potential and utilise the new factory to full capacity.

    Sources confirmed to The Nation  that May & Baker Nigeria has advanced discussions on its much-awaited rights issue.

    Its shareholders earlier this year voted to increase the company’s share capital from N1.9 billion of 3.8 billion ordinary shares of 50 kobo each to N3 billion of six billion ordinary shares of 50 kobo each. It has a subsisting shareholders’ approval to raise N3.2 billion.

    Earlier this year, May & Baker Nigeria Chairman Lt.-Gen. Theophilus Danjuma (rtd), told shareholders that company’s directors believe that the time was right to raise the funds to enable the company harness new opportunities.

    “Therefore, our rights issue will soon open and I hope shareholders will take up their rights to support our company in achieving its new vision. We shall all reap the rewards in the immediate future and beyond,” Danjuma said.

  • Ibeto, US firm merge to stimulate cement, housing needs

    The recent acquisition of 70 per cent equity in an American firm by Nigeria’s Ibeto Cement Company has been described as a remarkable feat. This is not only because it represents the first transaction to be executed on a reverse merger basis, but for its import on the local and African economy, reports, MUYIWA LUCAS.

    Ibeto Cement Company Managing Director, Cletus Ibeto, by nature, is a self-effacing man. But owing to the new vista of business empire he has to oversee, he may have to shout himself to the roof top. And he has every reason to.

    The firm, recently acquired 70 per cent majority equity in Century Petroleum Corporation, a US publicly traded petroleum exploration and production company. This acquisition has made the Nigerian firm the controlling partner in the merger, thus throwing up Ibeto as the Chairman, Board of Directors of the new merger.

    For stakeholders in the industry, the pattern of the merger- a reverse merger option, is unique. This is because reverse mergers are not very popular approaches. Wikipedia describes such mergers as “the acquisition of a public company by a private company so that the private company can bypass the lengthy and complex process of going public. The transaction typically requires re-organisation of capitalisation of the acquiring company”.

    Speaking on the development, an obviously delighted Ibeto said: “This is in line with our collective dream to place Nigeria in its rightful place in the comity of nations. It is strong testament to the abounding potentials in today’s global village and economy.” He lauded stakeholders in the historic merger, saying it will improve the level of actualisation of the huge cement business opportunities around Africa.

    The merger of Ibeto Cement and Century Petroleum bestrode two key sectors of the economy: cement and petroleum.  While it is popular knowledge that the latter remains at the core of our national economy, cement is also a key indicator of any economy. Stakeholders are convinced that housing sufficiency or its lack, therefore, is directly proportional to its level of economic development, especially in relation to cement.

    A report by Morgan Stanley, a US multi-national financial services firm states that: “Cement consumption per capita tends to rise initially with rising gross domestic product (GDP) per capita, but then falls as countries mature economically.”

    It is worthy of note that Nigeria’s construction industry/sector is only 3.2 per cent of the GDP. This may be related to a World Bank statistics, which has it that 60 per cent of Nigeria’s estimated population of over 180 million is caught in the trap of homelessness.

    In the continent’s cement industry, African nations are currently at the low end of cement consumption relative to other emerging economies. With growing populations, it is predicted that cement consumption in Sub-Saharan Africa will grow by an average of between seven and 10 per cent year- on- year over the next two decades. Yet, Nigeria and Senegal are the only two countries in West African sub region that are blessed with limestone deposits in commercial quantities. This makes the cement industry a major development contributor not only in local housing needs, but as a major foreign exchange earner.

    Ibeto praised Federal Government’s initiative, noting that government’s national Backward Integration Policy (BIP) on cement and the call to increase its local production spurred Ibeto’s  acquisition of Nigeria Cement Company Limited (Nigercem), located in Nkalagu, Ebonyi State. He said the strategic acquisition of Nigercem was aimed at expediting Ibeto Cement’s local production  by resuscitating the Nigercem plant and developing the project as a brand new dry process plant. The company is also developing another 6,000 Metric Tons Per Day (TPD) Cement plant at Cross River and Abia states.

    Ibeto also has an ultra-modern bagging plant in Port Harcourt, where it began operations in 2005, with a flat-storage capacity of 50,000 metric tons and a production capacity of 1,500,000 metric tons per annum, which translates to a production capacity of 4,000+ metric tons per day. It has two (2) production lines, each with a capacity of 2, 700 of 50kg bags per hour or designed total production capacity of 5, 400 of 50kg bags per hour. An integral part of this plant facility is a modern purpose-built jetty (Ibeto jetty), which can accomodate ships of 190+ metres long with sophisticated and state-of-the-art ship unloaders, mounted at the waterfront on the jetty to facilitate discharge of bulk cement from offshore/foreign mother vessels.