Etim Imisim
17 June 2008
Abuja — The Federal Government yesterday granted six firms new permits to import and produce cement locally.
The allocations allow the firms to import bagged cement into the country, in the short-tern, and, in the medium, begin local production.
The companies include Minaj Holdings Limited, Enugu, owned by Senator Mike Ajegbo; Made Well Products, Sapele, promoted by Mr. David Iweda and Bua International Limited, Kano, owned by Isiaku Rabiu.
Others are NICA Limited, Maiduguri promoted by Alhaji Hassan Adamu; Reagan Renaissance Limited, Calabar, owned by Mr. Reagan Ufomba; and Maan Labadu (Zane) Cement Company, Lagos, owned by Maan Labadi.
Commerce and Industry Minister Charles Ugwuh, who made the announcement, said the six companies which got allocations were those who were already in the business, on the very least, "in the last ten years".
Ugwuh said that licensing the firms was a move by government to find short-term and long-term solutions to the cement industry in the country.
Last Friday, he had met another set of seven stakeholders in the industry who were already drawing limestone and other raw materials and producing locally.
These are WAPCO/Larfarge (Ewekoro), Shagamu; Ashaka Cement; Benue Cement Company, and Obajana Cement, both owned by the Dangote Group; UNICEM, Calabar; Cement Company of Northern Nigeria, Sokoto; and Purechem, Ogun State.
According to the minister, cement manufacturing is capital intensive, and "requires a huge investment of about $400 million" to set up and operate.
It was for this reason that government was not about to grant licences to everyone who applied to import, or produce, as this would be open to abuse by businessmen who would see the opportunity as a chance to make money, he said.
"The president approved that he would give import permits to the companies which are producing locally," the minister said. "Cement is a very cheap product, but unfortunately, in Nigeria, it has become gold.
"The companies are not paper companies that are in my drawer," the minister added. "All those companies have been in business for at least ten years, either bagging or importing."
The spokesperson for the new licence holders, Mr. David Iweta, told reporters that government granting new licences now is a positive development in the housing sector in the country.
According to him, there is a short fall of 16 million houses in the country which more cement at lower prices will help to meet.
In response to concerns that the new entrants may not have port facilities to import, Iweta added that in a developing economy such as Nigeria, all importers do not have to have individual port facilities.
He complained of a "cartel", which he did not name, which had been holding down the development of the cement industry in the country. He completed his plant in 2002, he added, with facilities from the EXIM Bank of the United States of America, but could not get a licence to operate it until now.
He said it did not make sense when workers paid N2,000 for apartments out of their monthly wages of N6,000. He expects that the entry of the six new firms should help crash the price of the product, and consequently rents.
"We are looking at a region of 50 per cent to 100 per cent," he said. "We should be looking at N1,000 per bag of cement."
His price estimate tallies with that of the minister, who hopes that the price of the commodity should fall to between N1,150 and N1,215 in no distant future.
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