How Nigeria can tackle housing deficit – Larfarge CEO

What is your  view  on Nigeria’s cement industry? Nigeria cement industry is dynamic and has great potential for continued growth, despite the current economic challenges. The huge population, level of infrastructural development and massive desire for housing are positive indicators. However, focus on infrastructure development by current government is quite encouraging. The people are warm […]

What is your  view  on Nigeria’s cement industry?

Nigeria cement industry is dynamic and has great potential for continued growth, despite the current economic challenges. The huge population, level of infrastructural development and massive desire for housing are positive indicators. However, focus on infrastructure development by current government is quite encouraging. The people are warm and committed hence, there is great focus and high expectations from the LafargeHolcim Group. 

How would you assess the Nigeria business environment in 2016?

No doubt, 2016 has been a challenging year not just for Lafarge Africa, but for all businesses in Nigeria . For us, the reasons are mostly external; gas supply, logistics challenges due to the nature of our roads, lack of spare parts, increase in fuel costs, foreign exchange, inflation and devaluation. Despite the external challenges this year, we have had a very positive, very promising and better cost performance improvement compared to last year. We look forward to improvements in these areas in 2017.

What inspires your company  to continue to do business in Nigeria despite the present economic challenges in the land?

It is a known fact that we have been in business in Nigeria for over five decades now. Following the integration policy of the government, our operations grew from 3mt in 2008 to 8.5mt in 2012, with investment of over 1bn Euros.

Further investment of over $565 million is currently being made in the additional 2.5 million tonnes capacity cement plant in Mfamosing, Calabar, Cross River State. The plant will be officially commissioned soon. With this, we have a combined capacity of 10.5 million metric tons of cement from our operations in Ashaka Cement (Gombe State), UniCem in Cross River State, WAPCO operations in Ogun State and Atlas Cement in Rivers State.

We have announced plans and performed a ground breaking ceremony for a 2.5 million ton expansion in plant capacity at Ashaka.In addition, we are constructing an N11bn Captive Power plant also at Ashaka, Gombe State.

We have Lafarge Readymix Nigeria operations in Lagos, Ewekoro, Abuja, and Port-Harcourt, with plan to spread to other states of Nigeria in the near future to contribute innovative solutions to the building and construction industries . Outside the oil and gas and telecommunications industries, LafargeHolcim is the largest foreign investor in Nigeria.

What are your projections for 2017?

We are quite optimistic that all the indices will get better in 2017, and there will be overall improved performance.

A big input cost for cement manufacturers is energy and power. How has your company been coping with the issue of energy and power supply in Nigeria?

Supply availability and cost of energy (fuel and electric power) have been major issues for cement manufacturers in Nigeria over time. Over the years, we have invested on projects that guarantee fuel flexibility in all our operations. Apart from the consideration of economics, the use of natural gas as our main energy source has turned out to be effective in the goal to reduce the carbon footprint of our industrial process compared to other fossil fuel.

Also, we have a 310MW Power Project (of which 90MW is already completed) in Ewekoro, as our contribution to the current power generation in Nigeria.

In the last four years, there have been cases of collapsed buildings in Nigeria. What do you think the country can do to tackle this?

We share the concern about collapsed buildings in Nigeria as a key player in the construction industry. Our experience throughout the world and in Nigeria is that cement is very rarely a source of collapsed buildings, the issue is largely lack of and/or inadequate education about construction practices, design, and usage of materials. We have consistently engaged in campaign of education and sensitization with all stakeholders. We pride ourselves with high quality and innovative products, bringing adequate solutions for all types of applications and usage, with very high quality standards. We are committed to working with all stakeholders to educate them about the high quality of all our products as well as all the necessary practices which need to be developed to ensure good quality of construction and prevent building collapse.

The housing deficit in Nigeria at the moment is put at about 17 million units. What do you think is the way out of the problem, as a building and construction materials company?

It is gladdening to see and hear about commitment of successive governments in Nigeria to affordable housing. Federal Government launched the National Mortgage Refinance Company (NMRC) that is aiming at reducing the rates of mortgages proposed by mortgage institutions to single or low double digit. Included in this initiative is a possibility for developers to lower their costs of financing. Better structured Public Private Partnership is required to bridge the gap in housing deficit in Nigeria. Government and private sector play a key role in provision of mass housing all over the world.