Ban on 32.5 cement grade’ll harm economy — Umaru Kwairanga

Ban on 32.5 cement grade’ll harm economy — Umaru Kwairanga

August 3, 2014 : IFEANYI ONUBA

Dr. Umaru Kwairanga

The Chairman, Ashaka Cement Plc, Alhaji Umaru Kwairanga, spoke with IFEANYI ONUBA on the correlation between the planned ban on 32.5 cement grade and building collapse, among burning issues in the construction industry.

In recent times, there have been a lot of arguments about the real causes of building collapse in Nigeria and the role of cement quality. What is your view on this?

I want to state that cement is not responsible for building collapse in Nigeria and I can say that especially in the Northern Nigeria where Ashaka is located.

I can tell you that so many researches around this have already been done and we have seen practically that the issue of building collapse is more related to issues other than cement.

It’s either that the professionals or the consultants that are handling the building jobs have not followed the specifications.

When you look at all our products, you see that we have already stated exactly the general use of our 32.5 cement class.

Unfortunately people are using a lot of words to describe what we have on the ground. If you are talking about building collapse, you can’t make reference to only cement because you cannot just take cement and start building with it directly.

You have to mix cement with something else. So it depends on how this mixture has been done that will determine the quality of the building.

If we say a bag of cement should produce only 18 blocks or maximum 20, and a retailer goes ahead to produce 40 blocks, how can you relate the consequent collapse to the cement?

I want to state specifically that the issue of building collapse cannot just be related only to cement. Cement may take five to 10 per cent but more than 90 per cent is due to factors other than cement.

Do you consider the planned ban of 32.5 cement class as a solution to the problems of building collapse in Nigeria?

Definitely the issue of banning 32.5 should not be the solution in Nigeria. As I have said, there is no way you can relate the issue of building collapse in Nigeria to 32.5 cement class.

If there is no way you can relate that with the 32.5, then banning it will not solve the problem.

And the issue of ban of cement, especially the 32.5 class which is the one that we are producing in Ashaka will only create more problems for us.

Nobody is telling you that this 32.5 from our own side is inferior or that it has produced some cracks, or made his building to collapse. So why are you banning it?

In the last 30 years that we have been operating, nobody has complained, or come with this issue. But simply because there are other products in the market is not enough to ban the existing one.

I think that the issue of having other cement brands in the market should be left for the users. Let the users determine which one they want; that is a fair market principle. We have never hidden that we are producing 32.5 and we are proud to say that is what we produce because it is acceptable in the market.

Banning the 32.5 will have a multiplier effect on the economy especially in the North East.

Everybody knows the situation in that part of the country and in Ashaka, we have over 630 staff. And the culture we have especially in the Northern part of the country is that by the time one staff is sacked, you are taking the food and existence from almost 10 dependents.

We in the North have been using this 32.5 and by the time you say you are going to ban this; believe me, it will throw up a lot of implications.

Does your company have any problem producing any other type of cement apart from the 32.5 class?

No, we have even introduced what we call Superset which is also acceptable. What we do is to identify the needs in the market. We have a Research and Development department that does this.

This Superset is specifically for block making. We have taken them through training so that they see how to apply this new product. As I speak, we have taken investment of over €500m to Ashaka for expansion in the North East.

So what we are saying is that the 32.5 that we are producing with the existing line we have, we are bringing another new line of 2.5 metric tonnes. Therefore, we don’t have to discard something that is acceptable, useful and adding value in the economy.

We believe in value addition, so with this investment that we are making, we are definitely coming with a higher grade. Let me also clarify that this 32.5 is not only applicable in Nigeria, but even in the developed countries.

In fact, in Nigeria, researches have shown that 50 per cent of cement users use 32.5 class.

And it is accepted globally because it is the only grade that you can use for general applications. All the others are for specific applications.

Few years ago, Nigerians were promised that cement would be sold for about N1,000 but the price is still high. What is responsible for this?

First of all, cement is the only product that the price has come down in the last five years. Secondly, when you look at our prices, whatever we are going to charge as cement price is based on cost of production and we may not be able to control the retailers’ prices because of several reasons such as logistics, transportation and the rest.

So you have to take so many things into consideration. It’s not only the issue of cost; there is the quality of the cement and all what we are doing especially in Ashaka is to make sure that at the end of the day, we produce cement that is not only acceptable to the people but also affordable.

But there are some other costs that you cannot control. I can tell you that when I look at the cost profile of producing one bag of cement in Ashaka , more than 50 per cent is related to power. So how can you bring down the price? The cost of energy is high.

So believe me, the promise that government has made is good. Government is trying to push us so that we can see how we can bring down the price but in every business, price is a function of demand and supply.

And what we are trying to do is to make sure that we increase our own capacity to all our location because we felt that this will save the cost of producing more cement than a smaller bag of cement.

So the issue of price is something that is fixed. We have our own committees that are looking into that. So it’s just a matter of time and by the time this issue of power is resolved, we are trying to set up a coal power plant in Ashaka and this is the type of thing people should take into consideration.

How will this investment impact on job creation considering the disturbances in that area from insurgents?

What we are doing based on our research is to make sure that at the end of the day, our consumers are satisfied with our products. In Ashaka in particular, we are not looking at only that catchment area. We are even trying to put a grinding plant in Jos from that project in Ashaka so that we are not just relying on one location.

We believe strongly in the issue of employment. We all saw what happened with the Nigeria, Immigration. They were just looking for 4,000 but over one million people applied and people lost their lives as a result.

We believe the one in the north has not even been taken into consideration. I can tell you that the issue of unemployment and poverty are related to what is happening in the North East because people don’t have anything to do and at the end of the day, an idle mind is the devil’s workshop.

So if at the end of the day at less than 1 million tonnes we are engaging 630 staff directly, then we have distributors, transporters, suppliers on only one million you can imagine what it would be when we increase it to four million tonnes. If we multiply the number of staff by that we would be close to four times the current number.

By the time we increase our capacity there is even a possibility that the price will come down. So you can only imagine the impact it will have in terms of employment generation, in terms of social community projects, in terms of the impact on the nation’s economy and even the security in the area, because people will get work to do and this is what we are bringing to the table and that is why we are taking this investment to the area.

Even at a distance, when people hear about it they wonder why we are taking this kind of big investment to that area. But it is because we believe in this project and in the impact it will have.

A technical committee meeting held recently to review cement standards in Nigeria; what was the take home from the meeting?

I listened to all the discussions and the conclusion at the end of the day is that all producers should be transparent in what they are producing. Let everybody put the labelling on the bags so that the consumers will know exactly what they are buying. If it is 32.5 that I want, so be it. If someone else wants 42.5 or 52.5 let them go for it.