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Cementing Nigeria’s Future
Demand outstrips supply as construction takes off
Cement production in Nigeria has seen stock market activity travel a roller-coaster over the past year – or even two. As supplies have been squeezed, so prices have risen, prompting profits for investors but a headache for the construction companies and smaller consumers alike. Horror of horrors, there has even been a relaxation of the protectionist measures that prevented the bagged imports.
But short-lived though the shortages may be – new plants are set to come on stream in 2009 and 2010 which between them could turn Nigeria into a net exporter of cement – they are nonetheless painful in the context of a developing economy, constrained by infrastructural shortcomings and simple incapacity.
The situation is compounded by the cement industry’s heavy reliance on raw energy required in the manufacturing process. Some 40-50% of production costs are down to energy consumption and energy, in the form of electric power, at least, is something that Nigeria does not enjoy in abundance. Cement is crucial to the country’s construction industry and the wild fluctuations in its price that have prevailed in the last 12 months have proved to be a significant barrier to free growth in the sector.
