Lagos — The Federal Government has given provisional approval to 13 local companies to import bulk cement into the country in order to make up for the shortfall in supply and bring down the prices of the product.
The Minister of Commerce and Industry, Mr. Charles Ugwuh, on Monday annou-nced Federal Government's decision to allow importation of "bulk cement" - and not "bagged cement" as media reports suggested yesterday.
While bulk cement is imported and re-bagged by local manufactures, bagged cement will come in already branded which could impact negatively on local manufacturing.
Allowing importation of more bulk cement, according to Ugwuh, was aimed at bridging the deficit of 11.5 million tonnes in the supply of cement, which has been recurrent in the industry in the last few years.
The annual demand for cement is estimated at about 18 million metric tonnes, but the annual consumption of cement in the country for last year was estimated at 11.125 million metric tonnes.
THISDAY checks revealed yesterday that the 13 local companies that have been given provisional approval include Dangote Industries Limited, Lafarge Group, West African Portland Cement Plc, Flour Mills Nigeria, Ibeto Cement Company and Eastern Bulkcem Limited.
Others are Quacem Cement Company, Essette (Nig) Limited, Gateway Mining Company Limited, Purecem Industries Limited, Gateway Portland Cement Limited, Westcom Technologies and Energy Service and International Cement Company Limited.
The approval, according to the minister, is for 2008 alone, "in pursuance of government policy to gradually reduce the importation of cement products in a bid to increase value addition, provide employment and guarantee quality of cement consumed in Nigeria".
The approval is provisional, THISDAY learnt, because a committee is going to assess each company and make sure there is commitment to "backward integration" in the cement industry. This is to avoid giving approval to companies that are not already manufacturing cement in Nigeria or companies that have no commitment to investing in the industry.
A committee is expected to audit existing and planned cement manufacturing investments to confirm the level of commitment to local production.
The minister has warned the 13 companies that anyone found not to meet the backward integration requirements after the audit assessments "will have its licence cancelled and withdrawn".
In 2001, a policy on bulk cement was approved by the government. This allowed companies to import cement with a proviso that they must show evidence of local manufacturing of the commodity.
The importation was meant to have remained in place till 2006. However, by 2006, local manufacturers still could not meet local demand. The Obasanjo government extended the import regime by one year.
Obasanjo approved 8 million metric tonnes and various companies were given different allocations for the period. With the new extension, local companies are expected to meet up with local demand faster.