An excess supply of cement in the market has forced the management of Dangote Cement Plc to temporarily close down its Gboko Plant, which has the capacity to produce four million metric tonnes of cement annually.
Confirming the decision in Lagos, Group Head, Corporate Communication of Dangote Group, Anthony Chiejina explained that it was caused by the glut in the market, due to the increase in local production of cement and the continued importation of subsidised cement.
“The production figure for the first 11 months of the year showed increased local production level with supply now surpassing demand,” he said. “Total supply of cement to the market at the end of November, when compared to the same period last year, has shown a record increase of 11.4 per cent, the highest ever.”
However, he expressed unhappiness with continued importation of cement despite the glut in the local cement market, saying it questions the rigorous implementation of the backward integration policy introduced to encourage local production.
Speaking further on the choice of BCC for temporary shutdown, Chiejina said “…with the dumping of subsidised imported cement in the South eastern market, there is no way our Gboko Cement plant can survive. In fact, members of staff have been put on forced leave pending when the situation improves.
“Inventory of finished products is beginning to build up at our plants. Don’t forget that projects from our investments of about N280bn in additional capacity are already on stream, with lines 3 and 4 at Ibese and line 4 at Obajana, coming on stream early this year.”
He added other manufacturers are also experiencing the same problem of low sale and high inventory, and warned of the urgent need urgent to proffer solutions to the situation.
He particularly implored government to dutifully implement the provisions of the cement backward integration policy needed to protect local manufacturers from dumping.
