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Cement shortage in Ghana and competition in Nigeria

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World Cement,

Cement shortages in Ghana

World Cement reported last week that there are fears in Ghana of a cement shortage. Now, the former President of the Ghana Real Estate Developers Association, Dr Alex Tweneboah, has come forward and accused cement dealers of hoarding in anticipation of price increases.

According to reports, the cement shortage has been going on for around three weeks and has stalled building projects in the country. Dr Tweneboah has suggested builders look at alternatives to cement, which he said puts pressure on the cedi (Ghanaian currency) due to the country’s reliance on imports of clinker.

However, a representative of a local cement manufacturer has said that the cement shortage is temporary and is partly caused by power cuts impacting cement production.

Competition in Nigeria?

Also in the news recently has been Lafarge’s proposal to join its Nigerian and South African operations under Lafarge Africa Plc. When we posted this news on our LinkedIn group, one gentleman commented that such a move would give Lafarge ‘an edge’ over the others, which was no doubt their intention given the success of the Dangote Group. Following shareholder agreement to that merger came reports that Lafarge’s Ashaka Cement plant expansion was to be fast-tracked, furthering the impression that Lafarge is out to compete with its Nigerian peers. The new plant will have a capacity of 2.5 million tpa and includes a 64 MW power generating plant for a total investment of around N120 billion. The workforce of 640 will reportedly almost double. It is a huge investment in the region and in the local population.

Meanwhile, perhaps to further its competitive edge, Dangote Cement has promised its distributors in southwest Nigeria that they will receive an increased bonus in recognition of their ‘patronage’. Dangote Cement has decided to hold a regular forum with its distributors and other customers to further the collaboration the company has with its customers.

Dangote Cement has reportedly been commended by its customers for taking a stand on cement standards and increasing its production of 42.5 and 52.5 grade cement. The company is already producing almost 20 million tpa of cement in Nigeria alone and is set to increase this by a further 9 million t by the end of the year when new lines come on stream.

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