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Kano-Jibia Maradi railway line likely to crash cement price

By our staff Reporter

On Thursday, 26 May 2022, the Minister of Information and Culture, Alhaji Lai Mohammed, said the Kano-Jibia Maradi railway line, when completed, would help to crash the price of cement in the country.

According to him, the railway line will help reduce the cost of transportation and energy incurred by cement manufacturers since the bulk of Liquefied Natural Gas (LNG) would be transported by railway. During a facility tour of BUA’s Kalambaina cement plant in Sokoto state, the minister noted that the price of a bag of cement currently sold in the open market at N4000 and that it is about 30% higher than the factory price. 

The Managing Director and Chief Executive Officer, BUA Cement Plc, Yusuf Binji, revealed that cement producers were still under-producing with a demand of 30 million tonnes far below Ghana, Egypt, Senegal and Ivory Coast in terms of per capita consumption.

“We should be doing like 70 million tonnes instead of 30 million tonnes. Nigeria still has a low per capita consumption of cement when compared with Ghana. Our per capita consumption is about 123kg representing less than two and a half pounds, while Ghana is about five pounds per person,” he said.

However, Alhaji Mohammed assured Nigerians that by the time that section of the rail is completed, it would be cheaper to transport cement from Sokoto to all parts of Nigeria by rail. It would also help bring down the cost of energy deployed in producing cement because it would bring bulk LNG to the plant.

“We are very confident that in a few years time, with the challenges in logistics addressed, we would be looking forward to a crash in the cost of cement”, he said.

Yusuf Binji

 

Alhaji Mohammed commented on the conditions that made BUA cement to flourish, especially since 2015 when the Buhari administration assumed office. They include the fact that BUA was granted pioneer status, the ban on importation of cement, government’s divestment from the cement industry and backward integration policy.

“Thanks to these conditions, BUA Cement has recorded a 300% increase in production between 2015 and now. That is from 3.5 million tonnes yearly in 2015 to 11 million tonnes yearly now. For its part, the Sokoto plant is operating at over 90% of installed capacity. Because of its location which is just 100 kilometers to Niger Republic, the plant exports to Niger and Burkina Faso, earning Nigeria much needed forex. Please note that only excess is exported, especially during the rainy season. Other facts include that the company produces all year round, loading between 250 and 270 trailers per day. The plant has 700 trucks for cement distribution,” the minister explained.

He noted that the three million tonnes per annum line (IV) of the BUA Cement facility takes the combined installed capacity of the factory’s lines 2,3 and 4 to 5 million tonnes per annum, stressing that this was one of the most modern cement plants anywhere in the world.

“It has gas analyzers used in regulating carbon emissions released into the atmosphere; air purifying mechanisms set up to enhance the quality of air released from the cement manufacturing process. In fact, the plant has filters capable of capturing 99.9 per cent of dust in order to make the environment healthy and conducive for the workers and the customers alike,” he added.

The minister said that the plant was the first cement plant in Nigeria to use LNG to generate 50MW of power, thereby replacing coal in its kiln. This, he said, made the plant environmentally friendly in line with the climate change agenda.

“I am sure when the AKK gas pipeline project is completed, it will drastically reduce the time and cost of transporting gas, which is currently being trucked from Port Harcourt to the plant. At least 20 trucks of LNG are brought here daily from Port Harcourt. Imagine the costs and the logistic challenges involved in this. Of course this plant is also a job creator. As the Managing Director said, there are 443 permanent staffs and, together with all other ancillary jobs, the total is about 10,000 jobs,” he said.

Alhaji Abdul Samad Rabiu

 

He commended the Chairman of BUA Cement, Alhaji Abdul Samad Rabiu and his entire team for his undying belief in Nigeria, saying that there is no better indication of BUA’s support for the government’s economic diversification and job creation agenda than the company’s massive investments in Nigeria.

“In the last five years, BUA has completed four new cement plants of similar capacity in different parts of the country and is set to complete two more plants soon. It is expected that total production for BUA Cement will amount to 17 million tonnes per annum by 2023,” he noted.

The Managing Director and Chief Executive Officer, Yusuf Binji,  assured the minister that that investing in the future, BUA’s strategic priorities would be to drive revenue and cost synergies across revenue and margin lines, to harmonize sale and marketing strategies across its two plants, to increase customer portfolio and to capture new market areas which would include export, to construct lines 3 & 5 at the Obu and Sokoto plants respectively and to deploy solutions that enhance customer experience.

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