There is a drag in the supply of alternative energy to cement makers, which mostly raises the cost of cement.
Most cement makers in the country do not rely on public power supply but use mainly cheap gas and Low-Pour Fuel Oil, which is expensive.
However, for many months in 2014 and up till 2015, the drags in supply of these energy sources result from import gridlocks. The supply is often belated and most times more expensive than they should be. This has largely been responsible for fluctuating prices of cement.
“The major challenge facing the sub-sector is the supply of LPFO and gas resulting in high price of cement,” said the Manufacturers Association of Nigeria (MAN), in a new sectoral report.
Cement makers such as Ashaka Cement and Cement Company of Northern Nigeria (CCNN) are either developing or have fully developed coal-fired power plant.
The CCNN in Sokoto State told BusinessDay recently that gas supply challenge and high cost of low pour fuel oil (LPFO) have forced it to initiate a coal-fired captive plant in Sokoto State.
Sada Suleiman, head of corporate affairs, said Nigeria’s fifth largest cement maker currently depends on the imported and expensive LPFO to sustain its production.
Ashaka Cement is also investing hugely in coal-fired plant.
According to the report, MAN requested to allow members to import coal as alternative source of energy with duty-free pending when the mining of coal in commercial quantity will be available in the country.
ODINAKA ANUDU
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