1st June, 2011
Cement New Entrants Forum, a new group of cement importers, has urged the Federal Government to reduce import duty on cement to five per cent.
Mr. David Iweta, Chairman of the forum, told journalists in Lagos on Tuesday that the current high duty and levies were responsible for the high price of cement in the country.
He said the recent increase of duty on cement from five to 15 per cent and additional 15 per cent â€œtechnology chargesâ€ were some of the factor for the high price.
Iweta advised the Federal Government to implement a recommendation of a committee headed by former Minister of Finance, Dr. Mansur Muhtar, on ways to move the cement industry forward.
He said that the committee recommended that members of the group should be allowed to import one million tonnes annually.
He said that the report was, however, ignored by the government.
Iweta said that the current situation where only few people had licences to import cement was also part of the causes of the high price of cement.
â€œWe are requesting the Federal Government to revise the trend and grant our members licence to import one million tonnes of cement annually,â€ he said
Iweta said that the local manufacturers had no justification to sell a bag of cement for N1,500.
He said that if the duty on cement was reduced a bag of cement could sell for less than N1,000.
â€œThe locally produced cement ought to be cheaper based on the producers acclaimed abundant raw materials coupled with easy access to LPFO.
â€œIt is surprising that the local manufacturers have taken undue advantage of the current landing cost to sell above N1, 500 factory price,â€™ he said.
He said that members of the group had also reached agreement with some foreign partners to build Greenwich cement plants in the country.
The group chairman said that his members had constructed jetties worth N15 billion that could handle 25 million tonnes of cement in the next five years.
According to him, the denial of licence to members of the group has made the jetties unutilised.
â€œYet, we have been denied licence to import cement while those who claim to be manufacturers are given.
â€œWe ask who is more a Nigerian than whom or is it a case of two laws for one country,â€ he asked.
He said that by granting import licence to his members would inject 12 million tonnes of cement into the country and reduce the price to about N700 per bag nationwide.
â€œItâ€™s only when these factors listed by the forum are given priority that cement price will reduce.
Iweta said that it was not feasible to make the country to be self sufficient in cement before the end of 2011.
â€œNigeria cannot be self-sufficient in cement production by 2020,â€ he said, saying that demand for cement would continue to be on the increase.
He said that neighbouring countries like Niger, Chad and Republic of Benin also depended on cement from Nigeria to meet their needs.
â€œThe demand would be higher with the discovery of oil in Ghana and Niger,â€ he said.