BUSI­NESS AshakaCem ex­pand­ing to cre­ate jobs for N-east-Kwairanga

Daily Trust - - INTERVIEW - By Yunus Ab­dul­hamid Al­haji Umaru Kwairanga

ige­ri­ans were promised that upon dereg­u­la­tion 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 its price came down in the last five years. Sec­ondly, 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 price. There is the qual­ity of the ce­ment and all what we are do­ing, es­pe­cially we, in Ashaka, is to make sure that at the end of the day, we pro­duce ce­ment that is not go­ing to be only ac­cept­able to the people but 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 prom­ise that the govern­ment has made is good. The govern­ment is try­ing to push us so that we can see how we can be able to 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 in all our lo­ca­tions be­cause we felt that this will save the cost of pro­duc­ing more ce­ment. We are try­ing to set up a coal power plant in Ashaka and this is the type of Al­haji Umaru Kwairanga is the Chair­man of Board of Di­rec­tors of Gombe State-based Ashaka Ce­ment Plc. In this in­ter­view, he says the com­pany is em­bark­ing on an ex­pan­sion project that will add 2.5 mil­lion tonnes to its pro­duc­tion line and gen­er­ate fresh jobs in the trou­bled north-east re­gion. is a fair mar­ket prin­ci­ple. 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 worker is sacked, at least 10 de­pen­dents will also be af­fected. But now, you want to ban the 32.5 pro­duced by Ashaka for no rea­son, as far I am con­cerned. If there are any con­crete rea­sons that have to do with qual­ity, of course, we are go­ing to own up. More­over, we are un­der a big group, La­farge that is the num­ber one glob­ally as far as ce­ment pro­duc­tion is con­cerned. Our tech­ni­cal cen­tre is one of the best in the world. And all what they do is to make sure that the re­searches are done ac­cu­rately, look­ing at all the dif­fer­ent prod­ucts and how we can im­prove ours on daily ba­sis. 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. Think of the em­ploy­ees, the com­mu­ni­ties around the area. Ashaka is even the only quoted com­pany in North­ern Nigeria, and that is why it is called the star of the North be­cause of its pro­duc­tion ca­pac­ity over the years and the em­ploy­ment it has gen­er­ated. things people should take into con­sid­er­a­tion.

What are the likely im­pli­ca­tions of a ban on the 32.5 ce­ment grade?

Ban­ning it will not solve any prob­lem. And the is­sue of ban of ce­ment, es­pe­cially the 32.5 grade, which is the one that we are pro­duc­ing in Ashaka will only cre­ate more prob­lems to us. First of all, we’re try­ing to make sure that people have got­ten what they want in do­ing their own busi­ness, or in do­ing their own build­ings. No­body has told you that this 32.5 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, 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

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. As I speak, we are get­ting in­vest­ment of over 500 mil­lion Eu­ros to Ashaka for ex­pan­sion in the North-east. We are just wait­ing to get a date for Mr. Pres­i­dent to come and do the ground break­ing cer­e­mony. Let me also clar­ify that this 32.5 is not only used in Nigeria, but also in the de­vel­oped coun­tries. In fact, in Nigeria, re­searches have shown that 50 per­cent of ce­ment users use 32.5 classes. Even Julius Berger (con­struc­tion firm) has con­firmed that it uses the 32.5 ce­ment grade and that is enough for us not to bring pol­i­tics into it. But in Ashaka, we want to en­sure that our new line will come with a newer model ma­chines that can cater for other brands, but that notwith­stand­ing, we are not go­ing to dis­card this sim­ply be­cause we want to bring an­other one be­cause it is al­ready adding value and ac­cepted in the mar­ket.

You spoke about this ex­pan­sion plan, how many jobs is this in­vest­ment go­ing to cre­ate?

We are even try­ing to put a grind­ing plant in Jos so that we will not just rely on one lo­ca­tion. We be­lieve strongly in gen­er­at­ing em­ploy­ment. 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. So if at the end of the day, pro­duc­ing less than 1 mil­lion tonnes we are able to en­gage 630 staff di­rectly, then we have dis­trib­u­tors, trans­porters, sup­pli­ers, you can imag­ine what it would be when we in­crease it to four mil­lion tonnes. So the im­pact it will make 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, will be tremen­dous. People will get work to do and this is what we are bring­ing to the ta­ble.

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