NIGERIA: Over a month ago construction experts predicted a cement price crash in Nigeria when President Umaru Musa Yar'Adua yesterday ordered the re-opening of Ibeto Cement Factory in Port Harcourt, Rivers State.
This was considered a major step to break the oligopoly enjoyed by some cement manufacturers and importers.
The factory was shut down by former president, Chief Olusegun Obasanjo, allegedly to protect the interest of his allies in the cement industry.
The chairman of the re-opened company, Chief Cletus Ibeto, has pledged to flood the market with quality cement in the next forty days, saying this would result in the crashing of price of cement.
40 days ago cement prices in Nigeria ranged from USD12.00 to USD 15.00 per bag depending on the location in the country. Today, when the ships were supposed to come in, prices range from USD20.00 to USD25.00 per 50 kilo bag.
The destruction of local efforts of manufacturing cement was predicted by the president of the Manufacturers Association of Nigeria (MAN), Alhaji Bashir Borodo. This seems a bit farfetched as prices have continued to go up and the demand for cement is estimated at over 13 million metric tonnes P.A....
Ibeto says they can roll out 1.5 million tonnes PA ( just over 10% of what is needed)
Local production, can at best, handle 10 million tonnes PA...so Nigeria will still be short at least 1.5 million tons. We don't see any price relief about to happen especially with shipping costs set on a firm upward trend and neighbouring countries with high cement demands and shortages on the horizon unless one of the following happens:
1. Ibeto increases capacity and imports more
2. Other cement importers are allowed to reopen (do they exist?)
3. nnnmm don't have one.
So, Chief Ibeto ( I want that name), What gives? It's your turn. Make some hay while the sun is shining (considering that CIF USD125.00 per MT could be achieved CIF if you were in touch with the right people)
Happy to help.
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