Nigeria’s race for cement export
Early this year, Aliko Dangote, president of Dangote Group, announced that the company exported 0.4 million tons of the cement to other countries in 2016.
This was no mean feat considering that about one decade before, the country had been a net and massive importer in cement.
Today, there is a race for cement export by major manufacturers in the country. The result of this is that many of them are expanding capacity to meet the huge infrastructure gap in the local market and export to the West African market.
One of such manufacturers that are expanding capacity is BUA Group, which has invested over $2 billion dollars in the Nigerian cement industry with capacities in excess of over 8 million tons per annum within nine years of existence.
BUA commissioned its second cement plant located at Okpella, Edo State, recently, with dignitaries in attendance. The first line started commercial production early last year.
To sustain it, the company built a 31- Kilometre, 16- inch gas pipeline capable of transporting over 100 mscf of gas and transporting gas to generate over 500 megawatts of electricity. The company invested millions of dollars into purchasing an over 50-megawatts power plant for the facility, with 2-kilo meter horizontal water boreholes supplying water to the plant at a rate of about 50-cubit meter per hour.
Speaking at the plant commissioning at Obu, Okpella in Edo State, Abdulsamad Rabiu, chairman of BUA Group, said the success and impressive efficiency of the Obu cement plant in its first year of operation, which was over 90 percent, led the group to commence the construction of a second cement plant line of 3 million tons.
According to Rabiu, BUA had started the construction of another greenfield cement plant in Sokoto State with an annual capacity of 1.5 million tons at a cost of over $300 million which would be commissioned early next year.
With the first 3 million tons capacity and another 3 million from the second line, the cement plant at Obu, Okpella, will have the capacity to churn 6 million tons annually.
“Our investments in the two cement lines in Edo State represent the largest non-oil and gas related investment in the whole of the South-Southern region of Nigeria. It is engineered to be the most environmentally friendly cement plant in Africa with the most advanced duct emission systems. Our technology has the latest filtration with capacity of less than 10 milligram per normal cubic meter. We use natural gas, which is a very clean energy for both our kiln as well as the power plant in addition to having a very green environment,” he said.
He said investments such as BUA’s were critical these to reverse Nigeria’s import dependency and diversify the economy.
“The Nigerian cement industry went from a few hundred million dollars to almost $20 billion in enterprise value in just over a decade and there is still room to do much more. We still need more plants to produce more cement, increase our per capita consumption, and bring down our housing and infrastructure deficit,” he stated.
He stated that the responsibility to diversify the economy cannot be left only with the government, stating that the private sector must be in the driver’s seat with the support of the government.
“In this space, we have acquired machineries to establish the first limestone granulation plant in Nigeria for fertilizer production. It is hard to believe that Nigeria currently struggles with producing quality limestone granules used as filler for fertilizer blending. The granulation plant will be integrated to a 1 million tons fertilizer blending plant, which we have also acquired to be sited in Edo State. On completion, it will be the largest fertilizer blending plant in Nigeria,” he disclosed.
He said the firm was ambitiously developing its sugar estate in Lafiagi, Kwara State stating that the $300 million investment would enable Nigeria produce over 1.8 million tons of sugarcane.
Apart from up-scaling its rice milling facilities to reach 1 million tonnes capacity in the next few years, Rabiu stressed that BUA was partnering with the Federal Government and the Katsina State Government to develop a 500ha Textile and Garment cluster that with the potential to bring in over $5 billion worth of investments, create 25,000 direct jobs, earn dollars of over $2 billion and save $4 billion
Godwin Obaseki, Edo State governor, said Edo State was ready to partner with private investors like Rabiu to create the wealth and a minimum of 200,000 jobs for its teeming unemployed youths.
“To achieve this goal, our administration has created the enabling business environment for potential investors to invest in an industrial park, located in Ologbo, in Ikpoba Okha Local Governemnt Area of Edo State, where the gas transmission line and proximity to power is expected to boost economic activities and create investments in the state,” Obaseki said.
Yemi Osinbajo, vice president of Nigeria, said he was happy that in the construction of the power production facility for this plant, the BUA Group had used the most modern and efficient gas turbines which combined low and economical running cost with a very high degree of reliability.
“As a government, we are committed to creating an enabling environment and eliminating the bottlenecks that impede innovation and market-based solutions,” Osinbajo said.
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