Alhaji Umaru Kwairanga is the Chairman of Ashaka Cement Plc. In this interview with NSE ANTHONY-UKO, he speaks on the incessant problem of collapsed building in the country and what role cement plays, among other issues
There were promises that upon the privatization of the sector that cement would be sold for N1,000 but up till now 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 cannot 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 the price.
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 Cement, more than 50 per cent is related to power. So how can you bring down the price when the cost of energy is high?
So the promise that the government has made is good. The 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 locations 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 to something that is fixed. We have our own committees that are looking into that.
It is just a matter of time and by the time this issue of power is resolved, we will try to set up a coal power plant in Ashaka and this is the type of thing people should take into consideration.
Ashaka is the only quoted company that we have in the whole of North East and we know the crisis that we are facing in the North East and at the end of the day our own group had is even making more investments in that place. Who is even going to a place where there are only bullets that are just flying. But we took the bull by the horn and we know we have been there now for years, we are acceptable.
There has been a lot of noise about collapsed building in Nigeria and cement quality in recent time. 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 had already been done and we have seen practically that the issue of building collapse is more related to the other issues than the cement itself.
It’s either from the professionals or that 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 that consequent collapse to the cement?
Do you consider the ban of 32.5 cement class as a solution to the problems of building collapse in Nigeria?
Definitely the issue of banning 32.5 grade is not the solution in Nigeria. Like I’ve said there is no way you can relate the issue of building collapse in Nigeria to 32.5 cement class. If that is not the problem then banning it is not the solution.
Nobody is saying that the 32.5 cement class is inferior or that it has produced some cracks, or made his building to collapse, so why ban it?
Even Julius Berger has confirmed that they have been using the 32.5 cement grade and that is enough for us not to bring politics into it. We want to concentrate on how to improve in terms of the standard, and in the issue of enforcement. We on our own side will ensure that with the new investment we are making, we will continue to bring different brands, already we are bringing other products, there is Superset and the rest.
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 Cement 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 dependants.
You spoke about this expansion plan, how many jobs is this investment going to create?
We are taking investment to North East, Gombe; that is worth over N100 billion. The value of setting up that plant of 2.5 million metric tonnes of cement and a whole power plant is 513m Euros. And as am talking to you, we are ready for the ground breaking ceremony, all the issues of logistics have already been concluded, we have gotten the approvals from our board and we have already appointed and engaged the contractor, we are going to do what we all the turnkey projects where we will bring everything together from the supply of the equipment up to installation and training. In the next two weeks, we will go and do this groundbreaking ceremony. And this is the first time that his type of investment is going to the North East.
How will this investment impact of job creation and disturbances in that area?
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. Last two weeks, we all saw what happened with the Nigeria Immigration. They are 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 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… 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 close to four times the current number.
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