The Nigerian government has given Dangote Cement the approval to export Cement to West Africa through Nigeria’s land borders, which have been closed for over a year. The cement manufacturer is the only company given such approval to export across the borders.
This was disclosed in a report by Bloomberg on Monday evening after an investor call by Michel Puchercos, Dangote Cement CEO.
What you should know
Nairametrics reported in October 2019 that the Federal Government of Nigeria ordered the complete closure of the Nigerian border, placing a ban on both legitimate and illegitimate movement of goods in and out of the country.
The Comptroller-General, Nigerian Customs Service, retired Col. Hameed Ali said all import and export of goods from the nation’s land borders are banned until there is an agreement with neighboring countries on the kind of goods that should enter and exit Nigeria.
In December 2019, RenCap, an investment and securities firm declared that the closure of Nigeria’s land borders could lead to a slow-down in Nigeria’s economic growth in 2020.
Nigeria’s trade sector is about the second largest contributor to Nigeria’s GDP but has suffered from poor economic growth since Nigeria’s economic crisis began in late 2014. “We believe the border closures contributed to the decline in wholesale and retail trade in 3Q19,” RenCap said.
Dangote Chief, Pucheros, said the cement exports were made through “authorization given by this administration,” allowing Africa’s largest cement company to export to Niger and Togo during the 3rd quarter of the year.
He added that the volumes allowed for export were restricted and the Company group plans to export through seaports.
The exemption to Dangote Cement is seen as a softening of the government’s position on a border closure that started in August last year, and could open the way for other businesses to fully resume exports across the country’s land barriers.
Why this matters
CBN tasks multinationals on domestic production as P&G signs $35m deal to produce Oral-B locally
The CBN Governor has called on multinationals operating in the country to work towards the production of their goods in Nigeria.
The Central Bank of Nigeria (CBN), as part of its agenda to strengthen the manufacturing sector, has tasked multinational manufacturing companies in the country to consider setting up their manufacturing lines in Nigeria.
Godwin Emefiele, the CBN Governor made this statement during the contract signing ceremony between Procter & Gamble (P&G) and Colori Cosmetics Nigeria in Lagos.
The contract which is a move towards stimulating localization of production was birth from CBN’s policy-driven efforts to encourage improved production of goods that can be produced locally.
The Governor of Nigeria’s apex bank who was the host at the contract signing ceremony encouraged other multinational firms to consider the opportunities that Nigeria offers and begin to set up their manufacturing lines in Nigeria, noting that this move will help in creating jobs and wealth for the growing population.
Emefiele who also spoke on the economic stabilization policies implemented by the CBN to set Nigeria on the path of recovery explained that the manufacturing sector will continue to be a key focus of the efforts by the monetary and fiscal authorities towards driving the recovery of the Nigerian economy.
Why this matters
- The investment deal which is worth $35 million is set to present the well-diversified consumer goods giant with the opportunity to commence the domestic production of Oral-B toothpaste in Nigeria.
- The contract between P&G and Colori Cosmetics Nigeria will facilitate the local production of Oral-B products by P&G in Nigeria, as part of the commitment by the CBN to strengthen the manufacturing sector.
- This move is expected to make Nigeria a competitive producer of the product, and also cut the importation of toothpaste from the US, where P&G is based.
BUA Cement to commission second Kalambaina Cement Line in July 2021
BUA’s 3 million metric tpa cement line is set to be launched in July this year to help increase supply and stabilize prices of cement.
The second Kalambaina Cement Line of 3 million MTPA in Sokoto State, owned by one of the leading Cement manufacturing company, BUA Cement Plc, looks set to be commissioned in July this year.
In line with BUA Cement’s strategic midterm expansion programme, the cement plant will help to effectively scale up cement production, with the look to meet current and projected demand, as the Nigerian market is still greatly underserved.
Images of the plant surfaced on social media platform -Twitter- suggesting that the official launching of the plant could be imminent.
Why this matters
- The cement line when commissioned will add to the robust infrastructure of the cement tiger, and expand its installed capacity from 8 million MTPA to 11 million MTPA.
- This should help in cementing BUA’s position as the second-largest cement producer in terms of installed capacity, ahead of Lafarge Africa with 10.5 million MTPA capacity.
- This move will also help to unlock Pan-African opportunities for the company across the African Continent.
What you should know
- Recall that the billionaire, Abdul Samad Rabiu, the founder of the BUA Group revealed in his statement at 2020 Institute of Directors Dinner, that BUA’s cement line of 3mmt per annum in Sokoto is expected to be commissioned in the middle of 2021.
- BUA has also signed a contract with the Chinese construction company, Sinoma CBMI, for the construction of additional three production lines, with an installed capacity of 3 million metric tonnes per annum each.
- According to Abdul Samad Rabiu, the 3 cement plants in Sokoto, Edo and Adamawa which will be constructed at the cost of $1.050billion, will be completed by the end of 2022.
- When completed, the total installed capacity of BUA Cement is expected to expand to 20 million MTPA.
BUA Cement at the moment is the third most capitalized company on the Nigerian Stock Exchange with a market capitalization in excess of N2.5 trillion behind MTN and Dangote cement.
Nairametrics | Company Earnings
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