Tag: cement

  • BUA Group to increase cement market share with 10m tonnes

    BUA Group to increase cement market share with 10m tonnes

    BUA Group has unveiled plans to increase its cement market share with 10 million metric tonnes by 2018.

    At the company’s yearly customers’ forum and award held in Abuja, its Executive Chairman, Abdulsamad Rabiu, said the firm would double its production capacity through an expansion of its production plants.

    “Cement business is a very challenging one, because it is a capital intensive business especially with the declining value of the naira. But I want to assure you that we have embarked on an expansion drive that will be completed by the end of next year or at the beginning of 2018,” Rabiu said.

    He said cement was cheap compared with other African countries, noting that, despite the harsh operating environment, the company would continue to meet its stakeholders’ aspirations.

    Rabiu said the essence of the forum was to celebrate the success of the company’s partners and interact with them.

    “This is an acknowledgement of a solid partnership that works. It is our way of celebrating them for constantly dealing with us through the years to this point. We are rewarding our key distributors who have shown excellence and tenacity in the face of the prevailing economic situation,” he stated.

    Rabiu added that the loyalty of distributors to the brand has helped maintain its high position in the market. “The dedicated workforce is appreciated as well,” he said.

    Presenting gifts to the distributors, Rabiu said: “This award is our little way of celebrating you as you have been with us constantly throughout the year. Your loyalty to the brand has helped us to grow and we will continue to celebrate customers who have been there in this period of economic crisis.”

    BUA Acting Managing Director Mr. Yusuf Benji said despite the challenging operating environment, the company would not compromise on the quality of its products.

    “Our watchword is quality. Anybody that knows our products can attest to their high level quality that will not be compromised. We are going to give Nigerians value for their money,” he stated.

    The company has staked about N100 million in cash rewards, cars and other prizes to stakeholders that supported its business last year.

    In a related development and in furtherance of its commitment to boosting rice production, the Group has disbursed N600 million interest-free loans to rice farmers in Kano State.

    In addition to the interest-free soft loan of N288,000 to each farmer, improved seeds, fertilisers, pumping machines and other rice farming tools were also distributed free to over 2,000 rice farmers.

    The event, which held at Imawa Village, Kura LGA of Kano State, brought together rice farmers from Kano and Jigawa states, under the umbrella of Rice Farmers Association of Nigeria (RIFAN), Kano Chapter.

    Rabiu was at the event to engage the farmers and supervise the distribution of the farm inputs and tools.

    He expressed optimism on the partnership between rice farmers and BUA Rice Milling Company.

    His words: “Kano State, by far, is one of the most potential states in the country for rice farming and BUA is happy to have successfully established a mutual benefitting partnership with the rice farmers”.

    He further stated that the non-interest soft loan granted to farmers was BUA’s way of encouraging farmers to increase their yields.

    Rabiu reiterated that it is the organisation’s initiative of supporting government’s plan towards the drive to diversify the Nigerian economy into agriculture as an alternative to crude oil exploration.

    With 2,000 beneficiaries reached during this pilot phase, BUA targets 50, 000 farmers to benefit from the scheme in the next four years, with a target of a minimum of a million tonnes from Kano State alone.

  • Supervisor held for ‘stealing’ cement

    Supervisor held for ‘stealing’ cement

    three days after his promotion, a company supervisor, Abiola Hamzat, has been arrested for allegedly stealing 20 bags of cement.

    Hamzat, who works with a brick making company in Agbado, Lagos, was arrested with Kazeem Adebayo, 32, by Rapid Response Squad (RRS) operatives last Thursday.

    Hamzat, a graduate of the Ladoke Akintola University of Technology (LAUTECH), it was learnt, started work as a contract security and rose to an operator.

    The father of three was promoted to supervisor when management found that he is a university graduate. His salary was also raised to N215,000 monthly.

    RRS quoted Hamzat as saying: “I masterminded the crime but I only co-opted Adebayo into the plan. Initially, Adebayo discouraged me that it was not possible to steal cement at the company. After so much pressure, he told me to carry the gateman along in order to be successful which I eventually yielded to.

    “I had an accommodation problem with my family. I was desperately looking for funds to house them. That was what pushed me into it”.

    His salary as supervisor, it was learnt, triples what he earned as an operator.

    Police spokesperson Dolapo Badmus, a Superintendent (SP), urged companies to be vigilant at all time.

    She said the suspects have been transferred to the State Criminal Investigation Department (SCID) at Panti, Yaba, Lagos Mainland.

  • Dangote Cement pushes equities to N97b loss

    Dangote Cement pushes equities to N97b loss

    A significant depreciation in the share price of Nigeria’s most capitalised quoted company, Dangote Cement Plc, dampened the market situation at the Nigerian Stock Exchange (NSE) yesterday as the loss suffered by the cement company reversed hitherto positive market position to a net capital loss of N97 billion.

    With its first widespread rally this year and more advancers than decliners, the Nigerian stock market was on course for a modest gain but a 4.01 per cent decline in share price of Dangote Cement overwhelmed other gains and left the overall market position with its third consecutive decline.

    Dangote Cement accounts for nearly one-third of total market capitalisation at the Exchange. Dangote Cement recorded the highest loss, in value terms, of N6.97 to close at N167.02.

    The benchmark index at the NSE, the All Share Index (ASI), declined by 1.07 per cent from its opening index of 26,495.04 points to close at 26,212.09 points. Aggregate market value of all quoted equities also dropped from N9.116 trillion to close at N9.019 trillion.

    With the third consecutive decline, the average year-to-date return at the stock market so far this year built up to -2.47 per cent.

    Other top losers yesterday included Guinness Nigeria, which dropped by N4.15 to close at N78.90; Forte Oil, which lost N2.85 to close at N80.75; Stanbic IBTC Holdings, which dropped by 63 kobo to N15; Nigerian Aviation Handling Company, which lost 30 kobo to close at N2.86 and Dangote Flour Mills, which declined by 21 kobo to close at N4.04 per share.

    Sectoral analysis also showed the negative influence of the highly capitalised stocks on their sectors. The NSE Industrial Goods Index, where Dangote Cement is listed, recorded above-average decline of 1.8 per cent. The NSE Consumer Goods Index dropped by 0.29 per cent while the NSE Oil & Gas Index slipped by 0.14 per cent. On the upside, the NSE Banking Index rose by 1.7 per cent while the NSE Insurance Index appreciated by 0.7 per cent.

    There were 17 gainers against 16 losers. Beta Glass and CAP led the gainers with a gain of N1 each to close at N30 and N33 respectively. Guaranty Trust Bank followed with a gain of 57 kobo to close at N23.47. Access Bank rose by 29 kobo to N6.14. Oando rallied 24 kobo to close at N4.54. Cadbury Nigeria rose by 22 kobo to N10 while UACN Property Development Company chalked up 21 kobo to close at N3.09 per share.

    Total turnover stood at 137.69 million shares valued at N898.71 million in 2,488 deals. Fidelity Bank was the most active stock with a turnover of 25.06 million shares worth N20.98 million. Diamond Bank followed with 16.95 million shares worth N15.26 million while United Capital placed third with 11.04 million shares valued at N31.84 million.

  • $300m Sokoto Cement plant for completion in 2017

    $300m Sokoto Cement plant for completion in 2017

    Cement Company of Northern Nigeria Plc (CCNN), also known as Sokoto Cement, a subsidiary of BUA Group, earlier in the week  announced that its new 1.5million Metric Tonnes Per Annum (MTPA) cement plant will be completed before the third quarter of 2017.

    Founder/Executive Chairman of BUA Group and CCNN Chairman, Abdulsamad Rabiu, disclosed this during a working tour of the plant by the Minister for Solid Minerals Development, Dr. Kayode Fayemi.

    The $300 million project, which began a few years ago, according to Rabiu, was the first expansion of the plant since 1986. BUA group took over the majority shareholding of the company in 2010.

    He also informed the minister that the Group has discovered coal in commercial quantities, which it intends to use as fuel for a 40MW power plant being constructed as part of the project.

    The new cement factory will use both coal and Low Pour Fuel Oil (LPFO) and source its power needs from the plant with the excess power generated to feed the national grid.

    According to Rabiu, the $300m investment in the new plant is the single largest private sector led investment in the Northwest of the country.

    He also highlighted the plant’s export potential, which include its 100 kilometres closeness to the  Niger Republic border and 200 kilometre-distance to Benin Republic border. Rabiu said the plant will help Nigeria earn much needed foreign exchange and diversify the economy.

    Responding, Dr. Fayemi commended BUA Group and Sokoto Cement for their contributions to various areas of national development. He said CCNN was the second-largest employer of labour in Sokoto State, second to the state government.

    He  commended the company for successfully exploring coal in the state and reiterated the Federal Government’s resolve to support sustainable investments in the solid minerals sector, which will in turn have immense positive impact on Nigerians.

    The CCNN was incorporated in 1962 and began production in 1967, with a capacity of 100,000 tons per annum. In 1985, a new production line of 500, 000 tons was added and inuagurated. Thereafter, in 1986, the first line was shut down due to its uneconomic mode of operation, thus leaving the plant with a rated output of 500,000 tons per annum.

    The company, however, underwent various stages of privatisation and changes of ownership until BUA Group took over majority shareholding in 2010, thus bringing it under the larger BUA umbrella.

  • Community, cement firm bicker over pollution

    Community, cement firm bicker over pollution

    Except urgent steps are taken, the sleepy community of Maiganga in Gombe State may be up in arms against Maiganga Coal Mining Company Limited, and its parent firm, Ashaka Cement PLC (AshakaCem). The Community is accusing the firm of pollution.

    In a September 26 petition, signed by its Chairman, Gibar Sobtar, and sent to the Minister for the Environment, the community alleged that the firm’s mining activities have made life unbearable for the people.

    The situation, it claimed, was exacerbated by the failure of the government and the firm to fulfil their pledge to relocate the community and provide it with potable water.

    “Our collective outcry against the dangerous and increased hazard of coal mining in our community is not unknown to you, and to the wider world.  It has become imperative to lodge this further petition, as satisfactory steps are not being taken to mitigate the existential hazards we are confronted with.  An worse, we are alarmed by the seeming expansion of coal mining activities in our community, which has evidently aggravated the environmental degradation, pollution and other adverse consequences of the exploitation of coal resources in our community,” the petition read in part.

    According to Sobtar, on more than two occasions, inhabitants of the community, including men, women, youth and even children, have had to organise mass demonstrations, targeted at drawing attention to an alleged inhuman treatment the community has continued to suffer from the AshakaCem.

    He is sad that in spite of the several promises made by the mine operator, nothing has been done. For instance, he explained that in 2007, AshakaCem promised to relocate residents of the community to a safer area; construct an eight-kilometre road linking the village to the main road; build a good school and a skills acquisition centre for women and the youth.

    Regrettably, nine years after, he said, the company has continued to renege on her promises. So far, only 66 houses of the 300 houses envisaged have been built, with only one borehole and an already dilapidated two blocks of classrooms. Of the three boreholes, only one is functional.

    “It is a litany of broken promises. Even the houses they built for us are of very low quality.  In less than eight years of relocation, the houses have started collapsing.  The few standing ones have cracked walls and looks like anthills,” Sobtar noted in the petition, adding that the community is further enraged by the continued denial of the AshakaCem, which claims that her cement is of high quality, and that houses built by it does not collapse.

    Yet, more annoying to the Maiganga community is the confiscation, encroachment, or land grabbing by the firm without compensation. The petitioners maintained that their farmlands were taken over by the company and we were not well compensated. The failure, neglect or refusal to provide speedy and adequate compensation for the farmlands remain a critical failure of the firm.

    “This is largely the grievance that prompted the demonstration of July 2014.  This matter still remains unresolved. The increasingly shrinking farmland or the dispossession of our community of their valuable farmland has added to increasing unemployment, and pauperisation of our people.  Our people have been farming on the land for hundreds of years before the mining company discovered coal on our land.  We have been displaced as a consequence. The dispersal and dispossession of our people continues, even as mining activities continue to bulldoze its way relentlessly into the surrounding community.

    ‘’The Mining Company, a subsidiary of Ashaka Cement, promised to employ at least 80 per cent of their unskilled workforce from the community, but the company has reneged on that promise as well.  At present, to the best of our information, the company employs only five people from the community on permanent and pensionable basis.  This is double jeopardy. They take away our farmlands, and also deny our people employment in the mine,” he said.

    The community is further worried that the activities of mining is taking a toll on her environment. They explained that during mining activities, significant volumes of earth are displaced, and the resulting rock waste can be harmful to the environment. They contend that surface mines has removed acres of vegetation and altered topographic features of their community, such as hills and valleys, leaving soil exposed for erosion resulting from ecological disturbances to pollution of air, land and water, instability of soil and rock masses, and radiation hazards.

    Though the community is still oblivious of the health hazards that may be occasioned by oral mining have not been sufficiently explained to the community, nonetheless, the borehole built for the community, does not produce clean water. Sobtar noted that information by environmental experts has it that colour change in the community’s drinking water suggest that, LarfargeAfrica, the parent company of AshakaCem, has not caused its shaft to the prescribed level of thickness that would have prevented the coal belt methane from escaping into the water table.

    Within the European Union (EU), Sobtar said, such would never happen because the thickness of the shaft is one of the three basic conditions that must be met regarding coal mining.

    Closely connected to the water issue is where the coal mining confronts agriculture, the core of the community’s livelihood.  This is at two levels.  The first level is the drastic decline in yield which the community traces to the fine dust from the mine which settles on the land, inhibiting productivity generally, and pollution in particular.

    “Furthermore, mining in the area has not only changed the pattern of the land but has greatly contributed to degradation of the environment; the effect can be clearly seen in the loss of arable land for agriculture as well as change in the land cover feature such as vegetation and farm lands which are converted into   mining ponds,” the chairman explained.

    Sobtar said several engagements with the firm’s top management, including the managing director, had only yielded unfulfilled promises. This is why the community is seeking the intervention of the federal and state governments to, as a matter of urgency, intervene and save the people from a perceived “injustice by the management of Ashaka Cement Company.”

    The negligence of Lafarge in failing to caste its shaft to the prescribed level of thickness that would have prevented the coal belt methane from escaping into the water table, is anything but a disgraceful double standard, considering that the French firm would not do the same thing in the EU or North America.

    Maiganga residents further see the proposal by Lafarge to build a coal fired power plant as an “insensitive, irresponsible, corporate arrogance of adding salt to injury.”

    Sobtar explained that this corporate hypocrisy is even more poignant considering Lafarge’s home country, France, hosted the Global Conference on Climate Change last December .

    “The environmental degradation is a looming disaster. The fiendish type of ecological cancer that plagued the Niger Delta as a consequence of oil pollution has reared its demonic hydra head in the Northeast of Nigeria. The landmark accord signed following deliberations at COP 21 commits nearly every country to lowering plant-warming greenhouse gas emissions to help stave off the most drastic effects of climate change is being celebrated. France’s corporation, Lafarge, is in Nigeria violating those agreements,” the community said.

    Much as the Climate Change obligations makes marginal allowances for developing countries, it triggers a fundamental shift away from investment in coal, oil and gas as primary energy sources toward zero-carbon energy sources like wind, solar and nuclear power.

     

    We’ve settled them, say Lafarge, AshakaCem

    When contacted, Lafarge’s Head of Communication, Mr. Ademola Ojolowo, said the inhabitants of the areas involved are predominantly farmers, living in thatch houses. Their proximity to the proposed coal mine, he explained, necessitated their relocation to a place of choice (community and local government) away from the coal mine and while AshakaCem built and provided modern houses for them. He listed the concerned villages to include Maiganga, Jauro Kelvin (Lakatangarin) and Garkoyel. This was done before start-up of the quarry operations.

    Ojolowo said the exploration and land acquisition were carried out between 2006 and 2007; while the Gombe State Ministry of Land and Survey, Akko LGA and AshakaCem team conducted the house to house census of the affected communities and landed properties. The exact number of houses found in the original village as at the census period was built and distributed to the people of Maiganga.

    According to an email received from the management of AshakaCem, the Gombe State Ministry of Lands & Survey carried out the necessary assessment and recommended due  compensation to the farmland owners, based on the official rates, which was paid in full by AshakaCem to all identified and deserving land owners in addition to matching bonuses.

    A compensation analysis allegedly prepared by the Gombe State Ministry of land and Survey in July 2007, indicates that in Akko emirate zone (Kayelbaga and others) a total compensated farmlands was 283. In the same period, Pindiga emirate zone (Maiganga and others), 117 were compensated.

    So far, Ashakacem claims to have provided several social amenities, including three boreholes, women skill centre, built and equipped maternity clinic, electrification of the entire village, two blocks of two classrooms each to Maiganga village as part of its CSR. Other villages such as Lakwalak, Kalkulum, Kayelbaga, Piu and Tudunkuka, the cement firm claims, have also benefited in terms of block of classrooms, maternity clinic, road, electrification and boreholes.

    In terms of local employment, the community youths, AshakaCem insists, have benefited immensely by being gainfully employed in its mining operation. Of the 35 permanent staff employed by AshakaCem in Maiganga, local content accounts for 27; while of the 92 contract staff, 85 are local indigenes.

    In May, last year, AshakaCem and the local communities signed a five-year agreement. AshakaCem explained that the Federal Ministry of Mines and Solid Minerals had written and raised some observations on the documents, and was in the process of finalising the reviews.

    “Associating health challenges being faced by some individuals with our operation may not be correct in many contexts, unless proven scientifically. AshakaCem is committed to Zero Harm and the well-being of people within and around our operations. We have a moral duty to protect the people working for and around us by caring for the people and the environment,” the statement read, adding that in doing this, the firm ensures the efficiency of its processes for continued profitability and achievement of its set goals.

    The firm assured that it will continue to take proactive steps towards protecting and preserving the quality of its environment using global standards as a benchmark and staying committed to its Clean, Green, Zero Harm (CGHZ) objective and Sustainability Ambitions. It said key components of the firm’s environmental policy as an organisation include reclamation, back-filling and tree planting.

    “These are integral part of our operations which we carry out from time to time and without prompting,” the statement concluded.

  • Cement, oil stocks push equities to new low

    For the third consecutive trading sessions, Nigerian equities remained on the downtrend yesterday as investors sought to monetize the highly liquid large stocks in the industrial goods and oil and gas sectors. The benchmark indices at the Nigerian Stock Exchange (NSE) indicated average decline of 0.50 per cent, equivalent to a loss of N45 billion.

    Aggregate market value of all quoted equities dropped from its opening value of N8.946 trillion to close at N8.901 trillion. The All Share Index (ASI), which tracks prices at the stock market, also declined from 25,986.81 points to close at 25,857.06 points. The decline yesterday worsened the negative average year-to-date return to -9.72 per cent.

    While the underlying sentiments remained largely negative, the downtrend was driven largely by losses recorded by highly capitalised stocks in the industrial goods and oil and gas sectors. The NSE Industrial Goods Index dropped by 4.1 per cent. The NSE Oil & Gas Index slipped by 0.4 per cent while the NSE Insurance Index declined by 1.0 per cent. However, the NSE Banking Index appreciated by 1.3 per cent while the NSE Consumer Goods Index inched up by 0.02 per cent.

    Lafarge Africa led the 19-stock losers’ list with a loss of N4 to close at N44. Dangote Cement followed with a loss of N2.50 to close at N161.50. Conoil declined by N1.79 to close at N34.11. International Breweries dropped by 89 kobo to close at N19. Forte Oil lost 32 kobo to close at N94. Oando declined by 20 kobo to close at N3.89 while Zenith Bank dropped by 12 kobo to close at N14.38.

    Total turnover stood at 189.72 million shares valued at N905 million in 2,417 deals. Standard Alliance Insurance was the most active stock with a turnover of 95 million shares worth N47.5 million. United Capital followed with 11.33 million shares valued at N28.1 million while FBN Holdings placed third with 11.23 million shares valued at N34.36 million.

    On the positive side, Mobil Oil Nigeria led the nine-stock gainers’ list with a gain of N5 to close at N195. Guaranty Trust Bank followed with a gain of 90 kobo to close at N21.90. Nascon Allied Industries rose by 35 kobo to N7.53. Nigerian Breweries added 31 kobo to close at N142.31 while Custodian and Allied Industries chalked up 18 kobo to close at N3.81 per share.

    “As investor sentiments remain weak, we expect the current downtrend to persist. Nevertheless, in the interim, we believe strategic bargain hunting positions can be taken in fundamentally sound stocks,” Afrinvest Securities stated.

  • Dangote Cement revenue hits N442b

    Dangote Cement revenue hits N442b

    Dangote Cement Plc has declared an increased revenue of N442.09 billion in the last nine months, its financial report released yesterday at the Nigerian Stock Exchange (NSE) indicated.

    The revenue in the nine month ended September 30, this year was 20.97 per cent higher than the figure recorded during the corresponding period last year, despite the harsh operating environment, a development attributed to management’s strategy to leverage on its pan-African status.

    The report indicated that the cement manufacturer increased revenue by N76.642 billion from N365.450 billion it made during the corresponding period last year.

    The crises of foreign exchange gulped a huge amount of its revenue, as it spent N231.684 billion on cost of sales during the period of nine months in foucs as against N138.694 billion spent on the same purpose in the same period last year.

    The huge money spent on cost of sales affected its profit after tax from N157.993 billion it made in nine months last year to end the current period with N133.521 billion.

  • Dangote Cement drags equities to N17b loss

    Dangote Cement drags equities to N17b loss

    The Nigerian stock market suffered a relapse yesterday as the decline in share price of the highly influential Dangote Cement Plc dragged the equities market to a net capital loss of N17 billion.

    While the overall pricing trend remained tight amidst continuing rally in the oil and gas sector, losses recorded by Dangote Cement overwhelmed the modest positive pricing trend that had shaped the market in the previous two trading days.

    Aggregate market value of all quoted companies on the Nigerian Stock Exchange (NSE) dropped from its opening value of N9.692 trillion to close at N9.675 trillion. The All Share Index (ASI), the common value-based index that tracks prices of quoted equities, declined by 0.17 per cent from 28,214.57 points to close at 28,166.42 points. Average year-to-date return now stands at -1.66 per cent.

    Dangote Cement, Nigeria’s most capitalised quoted company, controls nearly one-third of total market capitalisation of the Nigerian equities’ market. Dangote Cement’s share price dropped by N3 or 1.64 per cent to close yesterday at N180, orchestrating a general negative market position. Guaranty Trust Bank, Nigeria’s most capitalised banking stock, followed Dangote Cement with a loss of 94 kobo to close at N25.83. Guinness Nigeria followed with a loss of 23 kobo to close at N92.77. Nigerian Aviation Handling Company declined by 16 kobo to close at N3.32 while Ecobank Transnational Incorporated dropped by 12 kobo to close at N11.38 per share.

    Total turnover stood at 410.10 million shares valued at N3.62 billion in 4,179 deals. Banking stocks dominated top activities’ chart. The three most active stocks included Diamond Bank, with 141.36 million shares; FCMB Group, 48.10 million shares and FBN Holdings, with 40.76 million shares.

    On the positive side, downstream oil majors continued to lead the gainers. Total Nigeria led the 18-stock gainers’ list with a gain of N13.50 to close at N283.50. Mobil Oil Nigeria followed with a gain of N8.55 to close at N179.55. Forte Oil rose by N7.76 to close at N163.11. Nigerian Breweries gathered N1.46 to close at N143.50 while PZ Cussons Nigeria rose by 94 kobo to close at N19.90 per share.

    “Whilst a tight monetary policy environment prevails, we perceive frail sentiment towards equities may persist as investors continue to take advantage of higher yields in the fixed income market,” analysts at Afrinvest Securities stated.

     

  • Cement price: High, high in the sky

    Cement price: High, high in the sky

    The price of cement, a major component in building, has gone up from N1,600 to between N2,300 and N2,600 per bag. The hike shocked many, especially those with ongoing projects who had made calculations based on the old cement price. What is the implication of this increase? Experts say it will hurt efforts at bridging the nation’s 17 million housing gap and also force adjustments in construction cost, among other consequences. Assistant Editor CHIKODI OKEREOCHA reports. 

    His frustration and fear could hardly go unnoticed. For the President, Lagos State Bricklayers Association, Deacon Abel Olukayode, nothing perhaps, could be more frustrating than not having answers to the barrage of questions from the over 5,000 members of his association seeking to know why the price of cement suddenly rose to between N2,300 and N2,600.

    Kayode told the The Nation that since this week, when the price of cement, one of the most critical raw material for the building and construction industry, went up to N2,600, from between N1,500 and N1,600, it’s been difficult controlling the anger and frustrations of bricklayers who besiege the Akesan, Lagos secretariat of the association daily.

    The price of cement rose up this week, throwing end users, and various operators and stakeholders in the building and construction industry into confusion. From cement distributors to property developers, bricklayers, block moulders, and contractors, there is palpable fear and apprehension over the unsavoury, far-reaching consequences of the price hike.

    Deacon Olukayode lamented: “They (bricklayers) have been lamenting. Contractors in the building and construction industry cannot bear it anymore. Things are getting worse every day. The unreasonable naira/dollar exchange rate, which stood at N414/per dollar, as at yesterday (Tuesday), is seriously affecting the economy and is at the root of the current problem.”

    He, therefore, called on President Muhammadu Buhari to “do something tangible to reduce the exchange rate to N100/per dollar to save lives and property of Nigerians.” He expressed fears that if nothing was done urgently to force down the price of cement, by halting the crashing value of the naira, then Nigerians may have to brace up for more building collapse.

    Olukayode raised some posers to drive home his fear that the skyrocketing price of cement could trigger more building collapse. “Will operators in the block industry be honest enough to mould 25-30 pieces of six inches blocks with a bag of cement based on the orientation being given to them? If they do, can our clients endure to purchase them under the current hardship caused by the economic downturn?” he asked.

    He explained that, for long, block moulders and bricklayers had been complaining  over rising incidents of collapsed building due to mismanagement of cement and other building materials in the market, which are substandard. He warned that with the rise in cement price, the situation may get worse as “clients that are supposed to use five bags of cement, for instance, will be pleading to manage four bags, which is totally unprofessional.

    Olukayode confided in The Nation that baring last-minute hitches, his association will meet next week Thursday to review the situation and deliberate on the way forward for the industry that has in recent times seen an astronomical rise in the cost of building materials and transportation. He hinted that the outcome of the meeting will determine the next line of action, which may include a rally by members of the association.

    However, while the possibility of more building collapse across the country as a result of the rise in cement price is giving Olukayode a cause for serious concern, other operators and industry experts who spoke with The Nation expressed fears that the effects of the development go beyond building collapse and the shrinking margin of block moulders.

    For instance, the former President of Association of Town Planning Consultants of Nigeria (ATOPCON), Mr. Moses Ogunleye, lamented that the development will affect the production of housing viz-a-viz the number of housing units that can be delivered to Nigerians. While noting that Nigeria’s housing deficit, put at 17 million, may have been grossly understated, he said the current cement price hike will frustrate efforts at bridging the gap.

    Bridging Nigeria’s estimated 17 million housing gap has been a pain in the neck of successive administrations, private property developers, and other stakeholders in the housing sector such as mortgage institutions. The World Bank recently brought the nation’s housing crisis nearer home when it said that about N59.5 trillion in needed to bridge the housing deficit through affordable housing.

    But with the price of cement hitting the roofs, it is easy to see why industry experts and stakeholders including Ogunleye are worried that authorities in the housing sector may have hit the brickwall. The former ATOPCON chief was emphatic that apart from affecting efforts at affordable housing delivery, the development will also lead to adjustments in construction cost and delay in project delivery time.

    Indeed, there are fears that the price hike will trigger increase in the cost of construction and by extension, the need for cost variation in all ongoing contracts. More importantly, perhaps, cases of delay in project delivery and outright abandonment may have become inevitable, even as contractors may be discouraged from embarking on new projects.

    A private developer lamented that the likely price variation for most construction projects might cause confusion and pitch contractors against their clients. According to the developer, who declined to have his name in print, resistance to requests for adjustments in construction cost might force a resort to unprofessional construction practices with consequences for the integrity of construction projects.

    Could the challenge of forex be the only factor responsible for the jump in cement price?  Ogunleye pointed out that although, it is a reaction to the general increase in price of goods and services caused by the challenge of sourcing Foreign Exchange (forex), the rising cost of production caused by lack of infrastructure, particularly power supply has become too heavy for cement manufacturers to bear.

    The town planning consultant is right. Manufacturers in the building and construction industry, especially cement producers, have come under severe strain in recent times as a result of rising cost of production. Ogunleye said, for instance, that the anticipated improvement in electricity supply by the power generation and distribution companies has yet to come the way of industrialists including cement manufacturers.

    At the last count, power takes up over 40 per cent of manufacturers’ cost, according to data from Manufacturers Association of Nigeria (MAN). Also, over 75 per cent of the electricity needs of manufacturers are said to be generated in-house, while about 25 per cent come from the utility firms. Though, cement manufacturers rely on their own gas-powered plants, getting gas to fire their plants remains a pain in the neck.

    Apart from lack of electricity, the challenge of transporting cement and building materials by road as well as the huge forex required to bring in raw materials may have also contributed to the sudden increase in cement price.

  • Cement price rises to N2,300

    Cement price rises to N2,300

    The price of cement yesterday rose to between N1,200 and N1,300 in Lagos and other parts of the country.

    Before the hike, a bag of cement costs about N1, 600 marking over 35 per cent rise in the cost of the raw material used in the building and construction industry.

    Reacting to the development, 2nd Vice President Vice President, Nigeria Institute of Building (NIOB), Mr. Kunle Awobodu said the increase may have been as a result of cost of production and the devaluation of the naira.

    He lamented that with the hike,  the cost of construction will increase while the need for cost variation in all ongoing contracts and abandonment of projects may become inevitable, adding that  it may also discourage  people from embarking on new projects.

    He said: “Clients, contractors and quantity surveyors may have disagreements due to price variations. New price on old contracts in a competitive bidding may eventually lead to sub-standardisation in construction.”

    A cement distributor in Arepo, Ogun State said the new price came as a surprise, adding that it many have been occasioned by the current economic down-turn. Another distributor at Ajah area of Lagos, Mr. Kunle Salami  said he has stopped his requests for more supplies as he is not sure of his customers reactions.

    He decried the increase and urged the government to intervene either in terms of policy for the manufacturing sector or the provision of constant electricity in order for them to thrive.