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Benefiting From Cameron’s Cement Importation Ban

Nigeria currently prohibits importation of cement just like several other items. The use of import prohibitions in Nigeria is part of a trade policy regime that seeks to protect existing domestic industries and reduce the country’s perceived dependence on imports. The bans are often justified on the grounds of preventing importation of all products that the county is deemed to be capable of producing itself. With local cement demand being met by new investments, Cameroon, like Nigeria, took a similar turn. In this piece, Edward Nnachi writes on the effects of the ban on cement business.

In countries where bans have proved effective, import bans benefit domestic producers since they reduce the amount of goods that are available on the national market and hence limit competition for domestic firms.

Before now, President Goodluck Jonathan had approved the decision on cement ban, in line with the National Industrial Policy.

Indeed, a statement issued by the Ministry of Finance in Abuja had said: “The recommendation of the committee approved by the President include: systematic and controlled programming of cement imports subject to the appropriate tariffs, reinstating of policy of banning importation of bagged cement in line with National Industrial Policy; and restricting issuance of cement import licences to only manufacturers and other players with track records of commitment to backward integration, including bulk cement importers with suitable bagging facilities.”

The statement noted that other cost-reducing measures for cement manufacturers had been approved for implementation. These, include concessional pricing and special allocation of LPFO, de-linking the price of gas for cement production from the price of LPFO and granting of duty free importation of LPFO during acute domestic shortage of cement.

The ban alongside other consistent investments in the sector has seen Dangote Cement growing its portfolio in Nigeria by hitting about 30 million metric tonnes of cement in all its plants in the country.

With the ban of cement importation in Cameroon, Dangote Cement Plc has expressed optimism of consolidating its Pan-African growth while effectively harnessing export opportunities to other regions.

The management of the Company had last year listed some six plants across five African countries scheduled for completion this year.

The plants at various stages of construction, according to the Group President and Chief Executive, Aliko Dangote will add about 13.5mmt of cement per annum to the existing capacity, when completed.

The on-going plant projects according to him then, were Zambia, 1.5mmtpa; Tanzania, 1.5mmtpa; South-Africa 3mmtpa; Republic of Congo, 1.5mmtpa; and Gabon 1.5mmtpa and Senegal 1.5mmtpa

Already, the company with a capacity utilisation of about 80per cent in its cement plant in Douala Cameroon, hopes to deepen its market penetration in the country as well as the Central African region through innovative product offering.

Unveiling the company’s plans, General Manager, Dangote Cement, Cameroon Abdulahi Baba, noted that the plant has the production capacity of 1.5 million metric tonnes per annum with expectations to achieve full capacity utilisation by 2016.

He explained that the plant has one of the most recent facilities of ensuring that there are no dust emissions during production.

The General Manager stated that the company has put strategies in place to achieve 30 per cent market share, noting that there was also plans of achieving 30 per cent export of total production.

He stated; “We are set to achieve stability of operations in 2015 Q1, pursue aggressive market penetration and consolidation through appropriate above the line and below the line activities. 170 distributors have been selected after the interview process. 85 distributors will start, while the number will gradually increase with increasing production.”

“Mines at Tombel has been opened up and it is under exploitation. The Mines at Batoke would soon become operational. Exploration license for Foumban deposit has also been secured. EIA and other activities for securing mining lease are being being processed. About 5,000 MT of pozzolana is stockpiled at the living area,» he stated.

Baba noted that the company’s ex-factory price is the cheapest in Cameroon when compared to other products in the Cameroon market, stressing that Dangote Cement is cheaper than 32.5 grade that is sold in the open market.

Fonoggi Serge, MD ETS (distributor) noted that the product is of a very high quality but sold at a very cheap rate,

“Consumers and other dealers are already making demand for the commodity. I sell 20 tons daily and the acceptability of the product is rapidly increasing and it goes for between 4,000 – 4,500 CFA”, he stated.

The Dangote Cement Chairman, Aliko Dangote stated that the Douala plant would revolutionize the cement industry in Cameroon and help stimulate the Eastern African economy as Dangote Cement would be churning out its known quality grade of 42.5 at a very competitive price.

He explained that the plant remained the most modern in Cameroon because of the latest technologies used in the construction from Germany, USA, France and put together by the renowned plant engineers, Sinoma.

The Dangote Cement Chief stated that the company started by Importing Clinker and that production is being carried out at the most environmental friendly level pointing out that the dust emission by the plant is lower than the 50mm international standard.

Kamdoum Rodrigue, a block maker, certified that the product is very good, stressing that it takes a shorter period to dry.

“Before now, we use to stay for one week waiting for the blocks to dry, but with this new product, we only stay for two to three days and our blocks are ready for supply. Now we meet our customers’ demand earlier than it used to be.” Rodrigue stated.

It could be recalled that Dangote Cement had recently made an inroad into Senegal with an additional 1.5million tonnes to the country’s capacity, while serving an export market demand of two million tonnes along the Mali axis.

Besides, despite commencing operations only recently, the company is optimistic of penetrating the market with at least 1.2 million metric tonnes of cement before end of 2015.

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