Cement consumption in the South East and South South zones of the country is experiencing an astronomic growth and would exceed analysts’ expectations this year, BusinessDay findings in the region can prove.
Just as national cement consumption has been on the upward swing, the two zones made up of 11 states, nine of which are coastal states, consumed 5.3 million metric tons (MT) last year and has gone past 6 million MT before March this year. Although, Olivier
Lenoir, managing director of UniCem, by far the major supplier in the region, told BusinessDay that supply gap has yet to be filled by all cement manufacturers in the region.
There are at least four cement manufacturers in the two geographically contiguous zones: UniCem in Calabar, Ibeto Cement (Port Harcourt – though largely an importer of bulk cement, which is re-bagged in 50kg), Eagle Cement (Port Harcourt), and NigerCem (Ebonyi – Enugu).
However, of this number, only UniCem supplies 1.8 million MT, which would hit 2.3 million MT this year; while Ibeto supplies 1.5 million MT (a court ordered until 2017). Eagle Cement, Port Harcourt, owned by the old Rivers Sate (now Rivers and Bayelsa states) struggles to put out few cement bags in the market; while Nkalagu based (Ebonyi State) NigerCem has remained moribund for a long time, with reactivation plans yet to materialise.
Findings indicate that the shortfall in supply is made up from major suppliers like Dangote and Lafarge-WAPCO.
Lenoir, the MD of UniCem, which recently introduced the 42.5 high strength cement, said demand growth in the two zones has been quite astronomic , leaving supply coming far, struggling to catch up.
“There is a huge supply gap in these markets that needs to be filled,” said Lenoir, who took over from erstwhile managing director, Didier Tresarrieu.
Meanwhile, the Mfamosing (Akamkpa LGA) based cement manufacturer, which is Nigeria’s third largest producer by produced shipped, has approved $500 million (N78.5 billion) second production line at its 2.5 million metric tons Greenfield cement plant.
This would take its productive capacity to 5.0 million MT by 2016, when the plant becomes operational.