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FG to introduce new backward integration policy in the cement industry

By on January 8, 2013
Cement Warehouse

Cement Warehouse


The Federal Government is making moves to review the Backward Integration guiding principle on cement to examine the wonderful growth recorded in the sector.

The Minister of Trade and Investment, Olusegun Aganga, disclosed this in Abuja Yesterday at a meeting with stakeholders in the cement industry, saying they are working on introducing a new policy as soon as possible.

Among other people, those in attendance were, Chairman Ibeto Group, Chief Cletus Ibeto, BUA Group, Alhaji Abdulsamad Rabiu, Group Managing Director, Flour Mills Plc, Chief Emmanuel Ukpabi, Managing Director/CEO, Lafarge Cement WAPCO Nigeria Plc, Joseph Hudson, and Group Representative, Dangote Industries Limited, Isa Tata Yusuf.

In his words, Aganga said, “Following the tremendous success recorded through the introduction and rigorous implementation of the Backward Integration Policy in the cement industry, we are planning to review the entire policy to consolidate on the gains so far recorded. We have achieved everything we set for ourselves 10 years ago when the Backward Integration Policy was introduced. We want to thank all stakeholders and investors in the sector for the success story recorded so far.

“However, we want to take the next step as part of our strategy on the way forward. We are forming a group of people that will look at the cement policy in detail and come up with the policy response that we need to have in place to take that next step that will make us a major exporter and user of cement.

“In 2002, the major priority of the country’s Backward Integration Policy was about cement production from limestone. I am delighted to say that after 10 years of implementation of BIP, the good news is that we started with 2 million tons capacity, but today, we have about 28 million tons capacity of cement, investment of about $6billion; which provides direct and indirect employment for about 2 million people. In addition, because of what we have done together, we have been able to save about N210billion in foreign exchange per year.

“For the first time ever, this ministry did not issue any import licence in 2012. This is a remarkable achievement and a major economic success for our country. However, we want to carry out a deeper review of the cement sector to ensure that it is more competitive not just locally but internationally because we are at a point where we should be thinking about exporting some of our products.

“This means that we need to look at the overall structure including the current pricing, availability, affordability, in addition to developing an export strategy for the sector.”

He disclosed that the Ministry was ever ready to collaborate with stakeholders to ensure growth.

He said, “At the end of the day, this is one of the sectors that Nigeria should, and will be rightly known for as one of the greatest contributors to the Gross Domestic Product of the country. This is the key message that I want to pass across in terms of where we are today and what our plans are in terms of where we want to be going forward. I want to carry everyone along in terms of what we are looking at and incorporate your inputs into what we are planning to do so that at the end of the day, it will be a win-win situation for all the manufacturers, consumers and the Nigerian economy at large.

“Hopefully, before the end of this week, the committee will be set up. There is no industrial policy that has been as successful as the BIP in the cement industry. So, we have a duty to make sure that we protect the sector and continue to see it grow.”