BEN EGUZOZIE
Recovering a once derelict Calabar cement company (Calcemco), which became the catalyst to a 2.5million tons Greenfield cement plant at Mfamosing, Cross River State , and creating 3,500 jobs within the support industry, UNICEM pushes a positive spin-off to bridging the cement industry’s supply gap.
Cement is a key input in the construction industry anywhere in the world. Nigeria , with a growing population of over 140 million people has a growing domestic demand for cement, put at over 18 million tons annually. The seven cement companies in the country are only able to supply about 6.5 million tons or 36.1% per annum, leaving a supply shortfall of 63.9% or 11.5 million per annum. The seven companies are: Lafarge Cement WAPCO Nigeria, Ashaka Cement, Benue Cement Company, Obajana Cement, UNICEM Calabar, Cross River State, Cement Company of Northern Nigeria, Sokoto, and DURECHEM, Ogun State . To fill this cement supply gap, about half-a-dozen firms were licensed to import cement into the country. This leads to a net foreign exchange outflow of over $600 million (N87 billion) as payment for imported cement. Some of the licensed companies to import cement include Minaj Holdings Limited, Enugu ; Madewell Products, Sapele; BUA International Limited, Kano ; NICA Limited, Maiduguri ; Reagan Renaissance Limited, Calabar and MAAN Labadi, Lagos . Despite the flurry of companies into importation of bagged cement, demand for the product has continued to outstrip its supply, thereby forcing its market prices upwards in the country.
UniCem’s intervention
The cement scenario is about to change for good. At least, 50 per cent of the net outflow “would be saved for the country “by the middle of May 2009. This would be the direct outcome of the formal commissioning of the United Cement Company of Nigeria Limited (UniCem) 2.5-million tons state-of-the-art Greenfield cement plant, at Mfamosing, near Calabar, Cross River State . The UniCem began a journey into the Nigerian cement industry in 2002, as a joint venture between the Nigerian Cement Holding B.V (NCH) and Flour Mills of Nigeria Plc. Their core business is making of portland cement, commonly known as OPC in Nigeria .
UniCem’s presence and investment in the state is the direct outcome of the privatization program of the Cross River State Government. UniCem had acquired the defunct Calabar Cement Company (Calcemco) in 2002 through the privatization exercise. At the time of acquisition, the cement plant located at Spring Road, Diamond Hill, Calabar, was derelict having been shut down for about 10 years, and overgrown with weeds. Recovering the over three decade old Calcemco plant first from weeds, reptiles and rodents, was our first task before reactivation began. Today not only has the former Calcemco plant been brought into a functional state, contributing 250,000 tons of cement per annum into the Nigerian market; but the once derelict plant became the catalyst to our state-of-the-art 2.5 million tons per annum greenfield cement plant at Mfamosing in Cross River State, said Joey Ghose, managing director of Unicem, to BusinessDay. Ghose said with UniCem’s Mfamosing plant on board, Nigeria’s over 6 million tons cement import would be cut by at least 50%.
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Economic impact
The impact of UniCem’s brand new cement plant on the nation’s economy is enormous. As active production begins after May 12, it would be the saving Nigeria some US$300 million (N43.5 billion) in foreign exchange net outflow per year. The plant is sited in a dense forest in Akamkpa local government, a limestone belt, which is home to Nigeria’s largest limestone deposits. The cost of building the Greenfield cement plant is in excess of $800 million (N116 billion), coming at a time Nigeria can be said to be de-industrializing. Given a soothing government policy, especially power supply, roads and communication facilities; coupled with the expansion of existing cement plants, the UniCem experience would propel the country steadily to move to close its cement supply gap. A further positive spin-off from UniCem’s combined production capacity is the direct creation of skilled technical jobs for more than 700 people, mainly from the state. This would go a long way in dousing any host community tension, a development that has been commonplace in the south-south. This is important bearing in mind that Cross River is a cousin of the volatile oil producing region. The quest for a share of the oil profit has earned the region an unimpressive sobriquet of unfriendly zone. But the state largely enjoys congenial investment climate, as remarked Ghose the UniCem boss, while speaking at the just concluded first South-South Economic Summit at Tinapa, Calabar.
By far, any cement industry requires the services of a diverse support industry, which leads to indirect employment opportunities. Using the global benchmarking formula, UniCem has created employment opportunities for 3,500 people within the support industry. This support industry is not limited in its services to UniCem. And the company says it is determined to support its partners, including the Cross River government, in building a state support industrial base; such that would enable and facilitate the growth and development of all types of industries in the state: manufacturing, tourism, import and export sectors. Today, the state enjoys the enviable spot as Nigeria’s tourism hub.
Nudging on despite daunting challenges
The decision to invest in a brand new cement plant, said Ghose, was driven by a strong will to contribute to the national economy. Getting investors to put in excess of $800 million (N116 billion) for the construction of this new plant, at a time that Nigeria is basically de-industrializing, was a tough task. The challenges of developing a project of this magnitude in Nigeria were varied. We even had to build our own support infrastructure including a 21km asphalt road to facilitate movement of construction equipment to site. But these challenges, as varied as they are, are not peculiar to this region or this country, he concludes faithfully. They were surmountable and were surmounted. Today I can proudly announce that one of the few start up industrial investments in Nigeria in the last few years, and certainly one of the largest investment outside oil and gas in the South-South region, has begun production and formal commissioning is slated for May 12, 2009. It is sure invigorating for Ghose to see through the new UniCem cement plant, and celebrate hope and faith in the Nigerian economy and local cement production.
Policy continuity
The UniCem Mfamosing project started about 2005, during the tenure of former governor, Donald Duke. Completion and commissioning of the N116 billion brand new cement plant comes at the time of Liyel Imoke, incumbent state chief executive. For Ghose, the calibre of support the management had received from Cross River government was most unparallel. He spoke of personal interest and troubleshooting trips undertaken by Governor Imoke since 2007. The governor took personal interest in our affairs, and has remained very attentive to our issues; this support and the seamless transition of political power in the state ensured policy continuity for the benefit of our company, the Cross River state economy, and soon the entire economy of the South-South region, stated Ghose. He implied that it is this attention from the state government that they relied on in their lowest moments, for the determination to continue.
Environmental rehabilitation plan
Operating in an impenetrable virgin forest at site, which is home to some rare species, UniCem is already committing itself to rehabilitating the area once its operations assume a crescendo; to mitigate the impact of its existence. This would be carried out through a comprehensive environmental rehabilitation plan (CERP). The company would also be providing infrastructure and procedures to safeguard human and animal population within the vicinity of its plants, an element that has been taken very seriously. Some of the initiatives coming on stream are: a fish farm which would be breeding endangered marine species. It is believed this would later become a major tourist attraction.
People force
UniCem believes in people as key to success. Currently in excess of 70% of its 700-strong force is Nigerian. Achieving this figure at such an early stage of operation, against the initial void of a technical skilled labour force is a major achievement. A recent survey said Nigeria has need for about 10,000 skilled engineers. But so far, it has only about 2,500 of them, leaving a big gap of 7,500. The cement industry requires highly specialized skills to operate, and within the cement industry one is either a specialist or he/she is not. There are no in-betweens, said Ghose.
Cement Training Institute
A novel thing UniCem is developing aside its multi-million dollar cement plant, is the Cement Professional Development Program (CPDP), aimed at developing engineers specifically for the cement industry in the country. It is one of the company’s core training focus areas for the immediate future, tied with its mid-term plan of establishing a Technical Training School at the Mfamosing plant. The school is expected to translate into a Cement Training Institute (CTI) that will serve not only UniCem, but the entire Nigerian cement industry.
CSR
Beyond environment priorities and staff development, UniCem pursues one of the most aggressive Corporate Social Responsibility program in the Nigerian business world. We strive to find shared value between the operations of the company and the communities affected by it. Such as: Education, Economic empowerment and Health areas. Some community members have had access to entrepreneurship development program on how to set up and operate small businesses. A micro credit scheme initiated by UniCem with three banks would fund these fledgling small businesses. As of date, 85% of the micro-credit loans have been repaid.
Early this year, the UniCem Community Education Initiative (UCEI) within its five partner communities set off wit 100 scholarships for five communities for primary and secondary school children; 10 scholarships for needy children to attend boarding school; 12 staffs posted to three secondary schools, to teach English, Mathematics and the Sciences; a bursary scheme to 10 students in the University of Calabar and Cross River University of Technology (CRUTECH). Others are: 281 adults provided with literacy classes in 2008; 243 members of the communities underwent skills development training in 2008 and graduated in February 2009, in partnership with Development in Nigeria [DIN]. The program focused on both core areas where UniCem would require support from support industries, such as: air-conditioner maintenance, electrical engineering, welding and carpentry, automotive repair, and dressmaking and general business skills for women.
Calabar by-pass
The need for a Calabar by-pass road becomes essential. When fully operational, UniCem would require at least 500 trailers a day to evacuate its cement from the Mfamosing factory, and other support industries like the Crush Rock industry and Quarry plant at Akamkpa. This is tedious in terms of safety and logistics, and could put the serenity of Calabar city to the test. At the first South-South economic summit last month, the six governors of the region espoused a regional rail and link road, from Calabar through Uyo to Benin .
Meanwhile, the cement firm hopes to see the states carry out co-ordinated socio-economic development leading to better infrastructure and a larger market; good operational environment in a region where economic policies, legal and regulatory frameworks, tax regimes are synergized and reconcilable. For this, Ghose asks the other cousins to Cross River to take up concession in the construction of the by-pass to show seriousness of the spirit collaboration. We are ready; is the region ready for us? challenged Ghose.
