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Exports begin from Dangote’s Ibese plant, but logistics will be a challenge

World Cement,

Dangote Cement’s Ibese plant has officially begun exporting cement to Ghana, with the departure of 50 trucks (5000 t) of bulk cement from the plant last week. The plan is to send 50 trucks per week to begin with, but ultimately this will build to 50 trucks per day. The route to Ghana will take the trucks through Benin and Togo.

Thanks to the huge expansion of Dangote Cement across Nigeria, the country is now able to produce excess capacity for export. The group’s president reportedly told Reuters that the company plans to capture the ECOWAS market (Economic Community of West African States), including Ghana, Liberia, Cote D’Ivoire and Sierra Leone, which suffer a supply shortage due to lack of natural resources. Dangote has already set up a 1.5 million tpa bagging plant in Ghana.

Export logistics are likely to be a challenge, however. As we reported last year (see March 2012 issue of World Cement), bureaucracy and corruption are major stumbling blocks to intra-African trade. Mr Simeon Ebbah of Trans-Royal Company Ltd, one of the companies working on the Dangote exports, told press: “…the demand of security agents and touts in the border are just too much; their demand nearly frustrated us….They are asking for the sum of N5000 per truck, mutiply that yourselve [sic] and see what happens – they are increasing the export cost of Nigerian products in the export market. How can the exporter remain competitive in international market? Government should be talking to its agencies at the border. They are too many in the border — about 26 to 30 agencies at our border making frivolous demands.”

While in some cases, import tariffs can protect local producers, Ghana’s lack of limestone deposits hampers the development of a local industry.

Written by Katherine Guenioui.

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