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Cement Standardisation - How New Policy Will Foist Monopoly On the Industry
[July 21, 2014]

Cement Standardisation - How New Policy Will Foist Monopoly On the Industry


(AllAfrica Via Acquire Media NewsEdge) WITH the festering crisis occasioned by the recommendations of the House Ad-Hoc Committee on the composition and pigmentation of cement yet to abate, it is becoming increasingly clearer that the House sacrificed national interest in furtherance of powerful vested interests. The haste with which this well choreographed farce received official stamp bespeaks of a vast conspiracy to impose monopoly on the cement market at the behest of visible and invisible forces, uneasy at the healthy competition that has defined this flourishing market since 2010.



The fulcrum of this disingenuous plot is an unknown coalition of civil society groups and professional bodies in the construction industry who without a shred of scientific evidence alleged that the use of 32.5 cement grade in construction works was responsible for incessant building collapse across the country. The group petitioned the Standards Organisation of Nigeria (SON). Thereafter, an Ad-Hoc Committee of the House of Representatives recommended that cement manufacturers be given a reasonable time to commence production of the standard 42.5 grade only, a position adopted by the SON.

Whereas public safety should be uppermost in the minds of stakeholders and not profit motive, there is the overriding need to enlighten the public on the issues in matter with a view to charting the right way forward. For instance, it is the public interest to find out if there is any scientific and or empirical basis for the allegation that 32.5 grade cement is responsible for the increasing incidents of collapsed buildings across the country. Or is this assertion a mere smokescreen to foist a narrow selfish agenda of powerful vested interests intent on maintaining and expanding the scope of their monopoly within the industry? The answer to these posers is of critical importance so as not to imperil the flourishing cement industry, with investment portfolio put at between $7 billion and $8 billion with employment capacity of about 1.6 million people.


As regulatory watchdog, the SON set up a high-powered technical committee to look at the existing grade of cement and recommend the best grades that should be in place for the good of the country. The technical committee headed by Professor Innocent Onyeyili had members drawn from the manufacturers Association of Nigeria (MAN); the Council for the Regulation of Engineering in Nigeria (COREN); the Raw Materials Research and Development Council (RMRDC); and Cement Manufacturers Association of Nigeria (CMAN), amongst others. There were also representatives of the Dangote Cement Company; Ibeto Cement and Lefarge WAPCO.

Although the committee's work is conclusive after only one meeting and failure to revert to members to agree on the report, the SON Governing Council has already approved a new standard of NIS444-2-2003 for cement production in Nigeria. On the face value, many unsuspecting Nigerians may applaud the SON's directive as a conscionable step towards ensuring the inauguration of a new regime in the overriding interest of the nation. But in truth, the SON position is part of a vast conspiracy to maintain and expand the monopoly stranglehold of cement Czars threatened by an era of multi-billion-dollar investments since 2010. The ongoing onslaught against some cement companies, therefore, has nothing to do with standard but everything to do with vile propaganda in furtherance of a fast disappearing status quo that has hitherto held Nigerian cement consumers to ransom. Till date, there is no scientific basis for the wild allegation that 32.5 cement grade is the cause of building collapse in Nigeria. The ongoing propaganda is therefore an attempt to give a dog a bad name in order to hang it.

The activities of greedy contractors, unqualified workers and non-adherence to building code and concrete standard are responsible for the parlous state of affairs in the construction industry. Many global landmarks, which have stood the test of time, were built with 32.5 grade cement which over night have become an object of ridicule in our clime. In France, Kenya, South Africa and indeed other parts of the world, this cement grade has been in use without any controversy. If the SON and indeed other relevant stakeholders are committed to finding a lasting solution to perennial problems of building collapse, it is their vicarious responsibility to act from an informed position rather than embark of a witch hunting expedition as it is clearly doing regarding its strange rating of cement standards without scientific evidence. The SON should encourage rather than stifle competition. All stakeholders should insist on strict adherence to building code and concrete standard as a way of stemming incessant collapse of buildings. The production of sub-standard blocks arising from the quality of the mixture of cement and other materials and how builders are regulated is responsible for much of these problems. Even the 42.5 grade cement is not immune to the nefarious activities of these shylocks and can cause building collapse if not properly mixed.

The nation only recently attained self-sufficiency in cement production. But this feat and indeed other achievements recorded by this critical sector stand threatened by this avoidable debacle and retrogressive policy of the SON and its parent ministry. More importantly, it goes against the grain of the backward integration policy in the cement sector, which was instituted by the Obasanjo administration, and the national industrial revolution plan of the present administration. More telling, it will imperil the modest achievements of the drive for Foreign Direct Investment if the monopoly as being foisted on the nation is allowed to stand.

In real terms, whereas the likes of Dangote cement with 60 per cent of the cement market share will enjoy greater monopoly if the SON categorisation stands, investors who have invested billions in our cement industry will be left to rue their misfortune for choosing to invest in Nigeria. The recent merger between the Nigeria unit of French cement maker Lafarge, Lafarge WAPCO, and its wholly owned South African Subsidiary is threatened by this new policy. The deal, which is worth $1.35 billion with the group renamed Lafarge Africa Plc and a market capitalisation of around $3 billion, represents a bold move for the share of our cement market. The licence it obtained is for the manufacturing of 32.5 all-purpose cement remains valid up till August 2016. Also, an investor, recently invested $500 million in Unicem and then without warning the rule of the game is changing.

The repudiation of agreements validly entered into by investors and the relevant government agencies, which is what this policy change represent, is a wrong signal to send out especially at this period when there is paucity of financiers and investors. Given the action of the SON so far, there is increasing evidence that in this instance, neither the SON nor its parent ministry acted in good faith as they did not comply with due process. The hurry with which the new policy was announced, even while the public hearing on the issue was ongoing, and the de-marketing of competition brands that has continued unabated since then are not only suspicious but expose the existence of an incestuous relationship and conspiracy to arrive at a predictable subterfuge: the imposition of a new monopoly regime in favour of Dangote cement and its co-travellers.

If it is true that Dangote produces 32.5 cement grade under the brand name 'Sephaku' in South Africa as was published by a group recently, and offers the same for several construction activities including block making and mortar, then one wonders what the SON's issue really is. Can it be lack of knowledge about what is in operation in its backyard or outright disregard of such for ulterior motives? Are Nigerians less educated than South African counterparts or why is something good for the goose being considered unacceptable for the gander? Nigerians need to be told.

In the spirit of openness and transparency, the SON should urgently clarify the basis upon which it arrived at its grading. To impose these grades without any clear parameters is not only a grave error of judgment but exposes its preference for favoured manufacturers. Rather than stoke the embers of needles controversy by favouring cement companies as is the case, the SON should work round the clock to provide a level playing field for all players. This is the irreducible minimal requirement for this all-important sector of our economy to grow and flourish.

.Onyeachonam, a social affairs commentator, contributed this piece from Abuja.

Copyright The Guardian. Distributed by AllAfrica Global Media (allAfrica.com).

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