TECHNICAL, ECONOMIC AND ENVIRONMENTAL RISK

ASSESSMENT OF CEMENT PRODUCTION IN NIGERIA.

EXECUTIVE SUMMARY

1.0 INTRODUCTION

1.1 Background to the Study

Cement can be defined as a hydraulic binder, which hardens when water is added. Technically, it

can be defined as a material with adhesive and cohesive properties which makes it capable of

bonding mineral fragment into a compact whole. It is essentially a necessity with no close

substitutes. Globally, cement is used in the construction of residential and public buildings,

roads, bridges and drainages as well as rehabilitation of infrastructure. It is therefore an

essentially commodity and forms part of the day-to – day living of every society.

Globally, the cement manufacturing industry is a major mineral industry that is powered by state

– of – the art production plants, which requires highly sophisticated continuous processes,

advanced control technology and energy management systems. It is also a highly capital and

energy intensive industry; the cost of a new cement plant averages out at about $130million per

million tonnes of cement produced, this translates into a long payback period which equates to

about three years’ worth of production revenue at a typical plant. Also, with rotary kiln operating

continuously at temperatures over 1,5000C, massive fuel requirements are inevitable (Klee, 2002).

The cement industry is also a labour intensive industry, providing direct employment for an

estimated over 850,000 workers worldwide (ERM, 2002). In 2005, the world production of

cement was 2284million metric tonnes (USGS, 2006) and the industry accounted for two – thirds

of total energy use in the production of non – metallic minerals with an average energy

consumption of 8 to 10 EJ of energy annually ( Taylor et al, 2006). The demand for cement is

considered to be price inelastic due to lack of apparent substitutes. This can be seen with

varying degrees across the world today. As the economies of different countries are in recession

and the construction business has been negatively impacted, cement prices persistently

increased in real terms.

In the UAE, for example, the price of cement has increased even though the real estate market is

in turmoil. In Egypt, even though there has been a reduction in steel prices in 2008 – 2009,

cement prices soared. In North America and Europe the prices are fluctuating but they are

clearly on the rise (Portland Cement Association, 2009). This can be attributed to the fact that

even when private enterprise is not using cement, the governmental demand on it is high as it

needs it for infrastructure build -up

The main environmental issues associated with cement production are emissions to air and

energy use. The process of producing cement causes negative environmental externalities at all

levels of production. To make clinker and mix it to prepare concrete the material must be

grounded and heated to more than 1500oC. Such energy intensive production releases NOX

(nitrogen oxides), CO2 (carbon dioxide), and SO2 (sulfur dioxide). All of these gaseous materials

cause harmful effects on the environment and contribute to the global climate change on earth.

Waste water discharges from cement plants are usually limited to surface run – offs and

discharges to nearby streams and rivers, which could contribute to water pollution. Quarry

activities associated with the cement industry impact land use and biodiversity resulting in land

and landscaping issues.

The energy consumed by the cement industry is estimated at about 2% of the global primary

energy consumption and cement alone contributes about 5% of the world’s total greenhouse

gases (Adam, 2007 and Loreti Group, 2008). Not only do these gases contribute to global

warming, they also contribute to poor air quality that can cause weakening in human health and

respiratory systems. When cement factories become even more concentrated in the developing

world, this means that children and people living in these areas will be paying the price for

construction firms to use the cement in Europe or North America (Miller, 2009).

.Hence, the global cement industry can be characterized as having global distributional

inefficiency across space and time. The environmental impact is further complicated through the

harmful effects of resource depletion. In order to make cement and burn the components at the

aforementioned temperature, the amount of fuel used –oil or coal —is very high. While clinker is

not under the threat of being depleted anytime soon, the economic costs of fuel resource

depletion needed to make the cement is under attack. Furthermore once the final product is

produced, some solid wastes remain as a result of the production process. Such solid waste, in

countries with loose environmental regulations or weak enforcement mechanisms, is thrown

into the water or burned in an uncontrolled location. This lack of oversight continues to cause

levels of inequality that the world cannot sustain in the long run.

These environmental challenges have gone uncontrolled because of the importance of cement

for developing countries due to industrialization, export proceeds, and infrastructure

requirements. The industry traditionally has gone under the radar–unlike the aviation industry

that has been under attack for environmental impact. It is worth to mention here that industry

leaders have taken the lead, in real or artificial terms, to meet and discuss the impact of their

industry on the environment (Adam, 2007).

Specifically, the World Business Council for Sustainable Development (WBCSD) has started a

Cement Sustainability Initiative (CSI) led by global industry firms. However, action has yet to take

place in an organized and succinct manner that can prevent the long term environmental and

health damage that is caused by the production of cement on a global scale. The environmental

challenges posed to the world are exacerbated because of the lack of substitutes for cement.

Building hospitals, hotels, homes, schools, etc. is a necessary component for development and

infrastructure build up.

1.2 Problem Statement

The history of cement production in Nigeria dates back to 1957. Initially, three cement plants

were commissioned by the Northern, Eastern and Mid-Western regional governments.

Subsequently, other companies such as Ashaka Cement, Benue Cement Company (BCC), West

African Portland Cement Company (WAPCO) and Cement Company of Northern Nigeria (CCNN)

were established. Other cement factories established between 1957 and 1980 were the Calabar

cement coOmpany in 1965 and Bendel Cement Company in 1964. All the cement companies are

members of the Cement Manufacturers Association of Nigeria (CMAN), which was established in

1979 with the aim of addressing the problems confronting the industry.

By 1980, the country had seven cement plants with total installed capacity of 5 million metric

tonnes. However, the plants were performed below expectation. Between the period 1981 –

1997, the production capacity of the cement plants fell from a peak of 3.4 million metric tonnes

(representing 65% capacity utilization) in 1988 to an all-time low of 2.5 million metric tonnes

(representing 49% capacity utilization) by 1997. Apart from the Ashaka cement plant, which

operated at about 70% capacity utilization, other cement plant during the period operated at

below 50% capacity utilization and some even operated at 10% capacity utilization (see

Appendix 1&2).

Within the same period, the demand for cement grew in the country leading to the country

resorting to mass importation to meet its local needs. Various factors were adduced for the

deplorable performance of the Nigerian cement Industry including poor funding to procure new

equipments and modernize operations; the rising cost and supply of fuel oil to meet production.

Poor power supply and lack of government policy. As a consequence of the rather deplorable

situation, CMAN had to alert the nation that its members were bugged down with a production

cost of US$ 62/ tonne as against the international average cement production cost which falls

within the range US$ 18 – 25 /tonne (Eyo – Ita, 2002).

By the end of 2002, the situation in the Nigerian cement industry was pathetic; of the eight

integrated cement plants, with a total capacity of 5.4 million tonnes; three of them –

NigercemNkalagu; Calabar cement and Bendel cement plants had been shut down for 3yrs

running; while two plants (Benue cement company, Gboko and Cement Company of Northern

Nigerian , Sokoto) could only sustain limping operations below 20% capacity utilization level;

while only three plants (Ashaka, Ewekoro and Sagamu) were operational and contributing as

much as 70% of the national cement production figures (Eyo – Ita, 2002).

With the advent of democratic governance in Nigeria in May 2009, the government inaugurated

the backward integration policy in 2001 to revert the rot that had set into the cement industry in

the country. The policy involved the sale of government controlling shares in then existing

plants and all the cement plant were listed for full privatization by the National Council on

Privation (NCP) and the Bureau of Public Enterprises (BPE). Also, bulk importers of cement were

given up to the end of the year 2002 to show positive and concrete evidence of investment in

local manufacturing of cement using the rich deposits of limestone which is available in the

country. There was also a proposal by government to ban altogether the importation of bulk

cement into the country by January, 2006 (Mohammed, 2004). Also, as part of the government

effort to encourage direct investments in the cement sub – sector, duties payable by cement

companies on their spares and machineries were reduced and the national gas pipeline grid is to

be extended to connect the cement industries (Jamodu, 2002).

The cumulative effect of this industrial policy in the cement industrial sector is that the

cumulative capacity of the industry grew from 2 million metric tonnes in 2002 to 28 million

metric tonnes in 2013; a space of 11yrs. Infact during the period 2005 – 2012, the installed

capacity of the industry grew by over 95.5%. Current local demand of cement is now between

18.3 – 20 million metric tonnes per year, making supply to outstrip demand and turning Nigeria

into cement exporting rather than cement importing country.

Nothingness, considering the infrastructure deficit in housing and roads; and low per capita

consumption of cement, the demand for cement in the country will continue to rise. Currently,

rapid urbanization in Nigeria with close to 50% of the population living in the urban areas versus

a meager 38% in 1993 and even lesser at 10% in 1952; it reflects the potentials of the real estate

market and with more than 80% of the population living in the informal residential housing, this

reflects the hugely untapped housing sector.

With regards to the roads, the development of road transportation network for a country like

Nigeria where more than 90% of the freight and passengers commute through roads; is of

indispensable importance. Out of the 200,000 kilometers (kms) of roads, 35,000 kms are owned

the FGN and account for 70% of the national vehicular and freight traffic. The rest is owned by

the 36 states and 777 local government areas. Only 30% of the federal roads are in good

conditions while the remaining 70% are in dire need of reconstruction and expansion. The FGN

has a budget of N 1.4 trillion covering 6,628 kms of roads construction. It has N850 million as an

outstanding commitment for maintenance of existing roads while N600 billion is needed to

bring the road transportation network at per with the developed nations, constructing 14,000

kilometers of roads per year to achieve the goals of Vision 20: 2020.

Also, despite the increase in local capacity in the manufacturing of cement, Nigeria still lags

behind in its cement consumption per capita. Globally, the average consumption of cement is

273kg per capital, while in North Africa the average consumption of cement is 300 kgs per

capita, it is 1000kgs in Libya, 640 kgs in Tunisia; 500kgs in Algeria; 280kgs in South Africa; 170

kgs in Senegal; 140kgs in Ghana and average in BRIC countries is 420 kgs. The current per capita

consumption of cement in Nigeria is 110 kgs. This consumption level is expected to rise given

the development at various level of governance in physical infrastructure and rapid urbanization

(Nwolisa, 2012).

Another paradox in the last ten years of the expansion of the cement industry in Nigeria is that

the increase in the production capacity of cement has not reflected in the current price of the

average 50kg of cement in Nigeria. The price of cement in Nigeria for the average 50kg bag in

2002 was N625:00; the price moved to N2, 000:00 in 2008 and currently stands at N 1,650:00 to

N1, 800:00 ($10 - $11) in various parts of the country. This is quite high when compared with the

price of the commodity across the globe; giving the impression that cement price in Nigeria

defies the laws of demand and supply. The price of cement in Ghana and Republic of Benin is $9

and $6 respectively, while in the prices in other countries across the globe are United States of

America (USA) ($5 - $6.00); India ($3.40 - $5.00); South Africa ($6.50) and Kenya ($5.00).

1.3 Objective of the Study

Based on the above, the objectives of the environment risk assessment of cement production in

Nigeria are:

1. Conduct a policy evaluation of the Industrial Policy of 2002 and the Backward

Integrations Programme that was used to drive the cement industry from 2002 – 2012.

2. Examine the fiscal policies of government from 2002 to 2012 that led to increase in local

production capacity of the Nigerian cement industry.

3. Examine the factors that have been responsible for high cement prices despite the high

increase in cement production in the country.

4. Examine the energy utilization pattern of the Nigerian cement industry and how it has

contributed to the production cost/ selling price of cement in Nigeria.

5. Examine the environmental health issues being encountered by communities within and

around cement plants at various locations in the country.

6. Examine and evaluate the extent to which newly established cement have fulfilled their

mandates to their host communities as expressed in their Environmental Impact

Assessment (EIA), which was approved before the establishment of the plants.

7. Examine the economic factors that have resulted in the consistent low consumption per

capita of cement in Nigeria when compared with other countries across the globe.

8. Examine and evaluate the socio – economic impact on the host communities of cement

plants in the areas of employment, physical development and commerce.

9. Examine to what extent the cement industry has contributed to employment and labour

– related issues in the country.

10. Examine the noise – level compliance and other safety regulations of the cement industry

in Nigeria.

11. Examine other factors that may arise in the technical, economic and social evaluation of

the cement manufacturing plants in Nigeria.

.1.4 Justification for the Study

The study of the socio – economic, health and other related impact of the cement industry in

Nigeria in the past ten years is in line with the institute objectives and the increase in production

volume of the industry has been taunted as a major policy success in Nigeria. This makes the

success in the industry a subject for policy review and re – examination.

1.5 Scope of the Study

The study is expected to cover the six geo political zone of the country. This is because currently

the cement industry is spread across the country and new cement plants are also spread across

the country.

2.0 The Cement Manufacturing Process in Nigeria

2.1 Cement Production Process

Portland cement is a fine powder, gray or white in colour that consists of a mixture of hydraulic

cement materials comprising primarily calcium silicates, aluminates and alumino – ferrites. The

composition of the materials used to manufacture Portland cement can be divided into four

distinct categories – calcareous (limestone or chalk), siliceous (silica), argillaceous (shale or clays),

and ferriferous (iron compounds). These materials are chemically combined through

pyroprocessing and subjected to subsequent mechanical processing operations to form gray

and white Portland cement.

Gray Portland cement is used for structural applications and is the more common type of

cement produced. Figure 1 shows the production process for Portland cement. The production

process can be divided broadly into the following primary components: raw materials

acquisition and handling, kiln feed preparation, pyroprocessing, and finished cement grinding.

Each of the process is discussed as follows:

2.1.1 Raw Materials Acquisition and Handling

The initial production step in Portland cement manufacture is the raw materials acquisition.

Calcium, the element of highest concentration in Portland cement, is obtained from a variety of

calcareous raw materials, including limestone, chalk, sea shells, and an impure limestone known

as “natural cement rock”. Typically, these raw materials are obtained from open – face quarries

which vary in properties from facility to facility. Other elements included in the raw mix are

silicon, aluminum, and iron. These materials are obtained from ores and minerals such as sand,

shale, clay and iron ore.

2.1.2 Kiln Feed or Raw Mix Preparation

The second step in Portland cement manufacture is preparing the raw – mix, or kiln feed, for the

pyroprocessing operation. Raw material preparation includes a variety of blending and sizing

operations that are designed to provide a feed with appropriate chemical and physical

composition. The raw material processing operations differs for wet and dry processes.

Material transport associated with dry raw milling systems can be accomplished through a

variety of mechanisms, including screw conveyors, belt conveyors and pneumatic conveying

systems. The dry raw – mix is pneumatically blended and stored in specially constructed silos

until it is fed to the pyroprocessing system.

In the wet process, water is added to the raw mill during the grinding of the raw materials in ball

or tube mills, thereby producing pump able slurry, of approximately 65% solids. The slurry is

agitated, blended and stored in various kinds and sizes of cylindrical tanks or slurry basins until

it is fed to the pyroprocessing system.

2.1.3 Pyroprocessing

The heart of the Portland cement manufacturing process is the pyroprocessing system which

transforms the raw mix into clinkers, which are gray, glass – hard, spherically shaped nodules

that range from 0.32 to 5.1cm. The complex chemical reactions and physical processes that

constitute the transformation can be viewed conceptually as the following sequential events:

Evapouration of free water;

Evolution of combined water in the argillaceous components;

Calcination of the calcium carbonate (CaCo3) to calcium oxide (CaO);

Reaction of CaO with silica to form di – calcium silicate;

Reaction of CaO with the aluminium and iron – bearing constituents to form liquid

phase;

Formation of the clinker nodules;

Evapouration of volatile constituents and

Reaction of excess CaO with di – calcium silicate to form tri – calcium silicate.

This sequence of events may be conveniently divided into four stages namely: evapouration,

dehydration; Calcination and reaction and takes place over a temperature range of 1000C and

15000C in rotary kilns which are long, cylindrical slightly inclined furnaces. The kilns rotate at

about 1 to 4 revolutions per minute (rpm) and are lined with refractory to protect the steel shell

and retain heat within the kiln.

Five different pyroprocessing processes are used in the Portland cement industry, these are: the

wet process, the dry process, the semi – dry and/or semi – wet process, and the dry process with

a pre – heater/pre – calciner. Cement plants in Nigeria employ the wet, semi – wet and dry

processes in their operations.

2.1.4 Finish Cement Grinding

The final step in Portland cement manufacturing involves a sequence of blending and grinding

operations that transforms the clinker to finished Portland cement. Up to 5% gypsum or natural

anhydrite is added to the clinker during the grinding to control the cement setting time and

other speciality chemicals are added as needed to impart specific product properties.

Figure 1: Process Flow diagram of Portland cement manufacture.

2.2 Hazard Identification in Cement Manufacture

The cement manufacturing process takes environmentally benign starting materials – limestone,

clay and sand – and creates an environmentally benign product, primarily composed of calcium

silicates. Thus, the industry’s environmental impacts are associated more with the process

conditions required by cement manufacturing than with the materials.

The socio – economic and environmental impacts associated with cement production include:

1. Impacts from limestone exploitation which include: Loud noise and vibrations generated

during blasting at the mine, High concentration of dust generated at the mine and at the

production plant, Rain run – off carrying solids into crop fields, and possibly polluting

surface waters and disrupting soil compositions.

2. Loss of ecological habitats with adverse effects on flora and fauna populations.

3. Dust, gaseous pollutants, noise and industrial effluents discharge due to the plant’s

production processes.

4. Displacement of rural settlements and disruption of farming activities.

5. Strain and/or provision of public facilities, for example, water, electricity, waste disposals,

health facilities, schools and others.

6. Presence of health threats and diseases arising from continued exposure to or contact

with by – products or wastes by receptors.

7. Air quality concerns associated with high temperature combustion, with Nitrogen and

Sulfur Oxides (NOx and SO2) being of particular concern.

8. Emission of Carbon – dioxide (CO2), from two different sources – the calcinations of

limestone or other carbonate – containing starting materials and high rate of carbon fuel

consumption.

9. Emissions to water in the environment via effluent or industrial waste discharge.

10. Occupational hazards in relation to constant exposure to noise, cement kiln dust (CKD)

and other particulate matter, and other gaseous and chemical pollutants.

2.3 Environmental Risk Assessment (ERA)

Environmental risks refer to hazards or dangers which arise in or are transported through the air,

water, soil or biological food chain. Mathematically, it can be expressed as (Main, 2005):

Risk = Hazard * Exposure. ….. (1)

Risk assessment incorporates not only the probable adverse consequences but also the

evaluation of these risks by the society; and involves three major activities namely: Risk

Identification, Risk Estimation and Risk Evaluation.

Risk identification entails the recognition that a hazard with definable characteristics exist. It

would also involve the identification of consequences if the hazard was to occur. Risk estimation

is the scientific determination of the nature and level of the risks. It is the estimation of the

magnitude of the consequences of a hazard which can include consideration of the spatial and

temporal scale of the consequences and the time to onset of same. Risk evaluation is the

product of the likelihood of the hazard being realized and the severity of the consequences. It

entails the judgements about the acceptability or otherwise of risk probabilities and

consequences.

Risk identification and estimation warrant information on the nature and extent of the sources;

the chain of events, pathways and processes that link the cause to the effects; and the

relationship between the characteristics of the problem and the type of response. Thus

environmental risk assessment covers the risk to all ecosystems, including humans, exposed via,

or impacted via air, water and land; and it involves a search for the best route between social

benefits and environmental risks.

Environmental Risk Assessment (ERA) differs fundamentally from other environmental

management techniques such as Environmental impact Assessment (EIA) and Environmental

Auditing (EA). While EIA is a study of the effects of a proposed action on the environment, EA is

a management tool used by industries and organizations to evaluate their environmental

performance. ERA involves the identification, estimation and evaluation of hazards which

ultimately are transported through air, water, soil and biological food chain.

ERA frequently uses the concept of source – pathway – receptor. The source is the contaminant,

and the receptor is the particulate ecosystem, while the pathway is the linkage by which the

receptor comes into contact with the source. If no pathway exists, then no risk exists. Table 1

shows an example of the Source – Pathway – Receptors.

Table 1: Examples of Sources – Pathways – Receptors

Sources Pathways Receptors

Contaminated Soil Air People

Contaminated Water Water Infrastructure

Leaking Drums Soil Ecosystem

Industrial Process Waste Food Chain Animals & Plants

Source: (O’Callaghan, 1996)

At the end of an ERA, existing controls are identified and further measures are proposed to

reduce or eliminate the risk identified. Risk management can then be achieved by reducing or

modifying the source, by managing or breaking the pathway and /or modifying the receptor.

The final stage in the ERA is the evaluation of the significance of the risk which involves placing

it in a context, this might involve measuring it with respect to existing environmental standards

or other criterion defined in legislation, statutory or good practice guidance.

There are a wide range of uses for ERA and although the specific methodology and the

responsibility for carrying out the assessment may vary, the core principles and the key stages of

the process are fundamentally the same in each case. Some examples of the use of ERA include:

1. Assessing the impacts of products generated by individual companies/sites due to

their use or transport.

2. Consideration of risks to the environment in a company’s Environmental Management

System (EMS) or Eco – management and Audit Scheme (EMAS). Such schemes are based

on continual environmental improvement in which risk assessment plays an important

part.

3. Prioritization of risks – when an organization is faced with a number of potential

environmental risks, ERA can be used to establish their relative importance, and thus

provide a basis for prioritizing which risks should be dealt with first.

4. Comparative risk Assessment – ERA is used to compare the relative risks of more than

one course of action (for example, what are the risks posed by untreated water versus

the risks posed by chemicals used to treat water).

5. Quantification of risks – ERA may be used where the risks are quantified in order to

establish controls on the risks (for example, maximum acceptable concentrations for

chemicals in drinking waters)

In this study, ERA is used to study the impact of producing a product, Portland cement by

cement manufacturing company in Nigeria.

2.4 The History and Structure of the Nigerian Cement Industry

Makoju (2010) reported that demand for cement increased rapidly and initially all the

requirement was met with imports. For instance, imports which was estimated to be 80.000tons

in 1946 grew by more than double in 1950 and quadruple to 626,500 tons by 1960. All this

supply was met entirely with imports until the establishment of Nigercem in Nkalagu in the then

Eastern Region in 1957. This was followed by the construction of another 600,000tpa plant

sponsored by the then Western Region government in Ewekoro which was commissioned in

1960. Next was Bendel Cement Plant in Ukpilla in the then Bendel State (150,000mt) in 1964 and

Calabar Cement which was commissioned in 1965. In the North, at the Cement Company of

Northern Nigeria (CCNN) in Sokoto a 100,000mt plant was also commissioned in 1967. These

five Plants represented the first generation cement plants in Nigeria (Table 2).

Table 2: The First Generation Cement Plants

S/N Companies Date of Establishment Capacity at Inception

(metric Tonnes)

1. NIGERCEM 1957 120,000

2. EWEKORO 1960 700,000

3. BENDEL 1964 150,000

4. CALABAR CEMENT 1965 100,000

5. CCNN 1967 100,000

Source: Cement Manufacturers Association of Nigeria.

Makoju (2010) also noted that after the construction of the Sokoto cement plant in 1967, the

nation made little or no further efforts to increase cement production capacity in the ten years

that followed. The three regions seemed to have been satisfied with having their own cement

plants and there was no private sector interest in this sector. Besides, the break out of the civil

war of 1967 to 1971 slowed down economic activities nationwide and made Nigeria unattractive

to foreign investors who could have been interested in investing in cement business in Nigeria.

Thus, for ten years, installed capacity remained stagnant.

The post-civil war reconstruction activities seemed to have led to an explosion in demand for

cement. Government’s response to this was to embark on massive uncoordinated importation of

cement. The result was the cement armada of the early/ mid 70s. In order to correct the error

committed in embarking on massive importation of cement, government, by way of loans and

equity stake, partly funded the construction of the second generation of cement plants in

Nigeria leading to the birth of Sagamu Plant in 1978 (with a 0.9m tons capacity), Ashaka in 1979

(0.7m tons capacity) and Benue Cement Company (BCC) in 1980 (with a 0.9m tons capacity)

(Table 3).

Table 3: Second Generation Cement Plants

S/N Companies Date of Establishment Capacity at Inception

(Metric Tonnes)

1. Sagamu Plant 1978 900,000

2. Ashaka plant 1979 700,000

3. Benue Cement Company(BCC) 1980 900,000

Source: CMAN

Thus from the history of the Nigerian Cement Industry between 1960 – 1980 two major issues

were of particular interest in the first and second generation cement plants in Nigeria: The first

was that virtually all of the companies had strong government ownership and control, and

secondly a good number of the cement plants built before the eighties were wet rather than dry

process plants (dry process plants are more economical and fuel efficient).

Throughout the twenty years spanning 1980 to 2000, no single cement plant was constructed in

Nigeria. Instead, it was import terminals that witnessed growth from two in 1980 to about twelve

in 2000 (Makoju, 2010). As the local production was nose diving, imports were expanding.

Appendix 3 shows that local production crashed from a peak of 3.5m in 1986 down to 2.28m by

2000. In the same period imports grew from 0.8 tons in 1986 to 3.34 m tons in 2000. All

stakeholders admit that indiscriminate importation of cement into the country from late 1980’s

led to the unfortunate and unwarranted collapse of the local cement manufacturing sector from

its capacity to supply over 80% of total supply in 1986 (importation accounting for the balance

18.6%); to the abysmal level of 2003 estimated at about 23% while import had climbed to over

76% of the total supply.

2.4.1 Industrial Policy and Backward integration in the Cement Industry (2002 – date)

With the near collapse of the industrial sector in general and the cement manufacturing sector

in particular at the advent of democratic governance in 1999. The FGN introduced a new

industrial policy for the country to stimulate industrial growth in 2002 and in addition adopted

the backward integration strategy to revitalize the cement industry in Nigeria.

The key elements of the new industrial policy include:

To place Nigeria among the ranks of most industrialized countries;

To encourage the private sector to play pivotal role in the industrial development of the

country;

To increase industrial output and linkages for both domestic and export markets;

To increase value addition by creating niches of competitive advantage;

To increase capacities of entrepreneurship and technical skills in order to create more

direct and indirect employment opportunities; and

To increase competitiveness of made in Nigeria products in the local and international

market.

The backward integration strategy of the government involved increase in local capacity

utilization for cement production and as a boost to the policy, government only issued import

licenses only to cement manufacturers or potential manufacturers who showed concrete

evidence to contribute to local output. This strategy was designed to revitalize the cement

industry and reduce over reliance on importation.

The result of this policy thrust has been very positive. This can be seen from the facts that within

seven years of its introduction, the number of the cement plants in Nigeria had increased from

four in 2002 to eight in 2008. The new investments between 2003 and 2008, as well as their

contributions are listed in Table 4. Also local production jumped from its thirty year low of 1.9

mmt in 2003 to 8.1 mmt in 2009, an increase of over 300% in 6 years. As of 2010, there were

three other new cement plants under construction and some expansion projects were ongoing

in some existing plants, and these are listed in Table 5. The current capacity of the Nigerian

cement industry and expected capacity by the year 2015 are listed in Table 6.

From Table 6, it can be seen that the Dangote group is the major cement group that control the

Nigerian cement market with a total of 70% of the total share of the market. They are followed

by the Lafarge group with just 19% of the market, while the other smaller firms shares the

remaining 11%.

Table 4: New Investments in Cement Plants (2003 – 2008)

S/N Cement Plant Year Amount Capacity (Metric Tonnes)

1. WAPCO (Ewekoro) 2003 GBP 130million 1,000,000

2. BCC Expansion (Benue Cement) 2004 $400 million 3,000,000

3. Obajana Cement (OCP) 2006 $1.2 billion 5,000,000

4. Ashaka Cement 2008 $ 150 million 300,000

5. UNICEM (Calabar) 2009 $ 840 million 2,500,000

Total 11,800,000

Source: CMAN

Table 5: Additional Capacity in the Cement Industry (2008 – 2012)

S/N Company Plant Location Amount ($) Capacity (Metric Tonnes)

1. Dangote Group BCC 200 million 1,000,000

2. Dangote Group Ibese 1.02 billion 6,000,000

3. Dangote Group Obajana expansion 1.0 billion 5,000,000

4. Lafarge WAPCO Lakatabu – Ewekoro 600 million 2,000,000

5. AVA Cement Edo State N/A 300,000

Source: CMAN

Table 6: Existing Cement Plants and on – going Cement Plants (2012)

S/N Plant Current

Capacity

(2012)

(Metric Tonnes)

Planned

Expansion

(Metric Tonnes)

Expected

Capacity

(2015)

(Metric Tonnes)

1. Dangote Cement PLC –

Obajana

10,250,000 5,000,000 15,250,000

2. Dangote Cement PLC –

Gboko

3,000,000 1,000,000 4,000,000

3. Dangote Cement PLC – Ibese 6,000,000 6,000,000 12,000,000

4. Dangote Cement PLC –

Calabar

- 1,500,000 1,500,000

5. CCNN 500,000 - 500,000

6. Lafarge Cement PLC –

Ashaka

1,000,000 - 1,000,000

7. Lafarge WAPCO – Ewekoro I 1,100,000 - 1,100,000

8. Lafarge WAPCO – Ewekoro II 2,200,000 - 2,200,000

9. Lafarge WAPCO – Shagamu 1,000,000 - 1,000,000

10. UNICEM 2,200,000 - 2,200,000

11. Edo Cement Ukpilla 250,000 - 250,000

12. Purchem Industries Ltd,

Lagos

150,000 - 150,000

13. AVA, Edo State - 300,000 300,000

14. NIGERCEM, Ebonyi State - - -

Total 27,650,000 13,800,000 41,450,000

Source: Dangote Cement PLC – in house data and CMAN

Purchem Industries ltd is located at 122/132 OshodiApapa expressway and is a mini – cement

plant which started operations in 2001 based on the VSK technology and has a manufacturing

capacity of 300 tonnes per day. NIGERCEM was recently acquired by the Eastern Bulkcem

Company (EBC). It is the first Nigerian cement plant located in Ebonyi State, Nigeria; it is

currently under the process of refurbishing, renovation and restarting. AVA Cement Company

was incorporated in 2006. The company is in partnership with a Chinese Company, 17

Metallurgical Construction Company and it is located along km 16, Igarra – Auchi Road,

Egbigere Village, Akoko – Edo , Edo State. At completion it is expected to produce 2.5 million

metric tonnes of cement.

2.5 Cement Bagging Plants in Nigeria

Apart from new investment in cement manufacturing in Nigeria, cement production was also

boosted during the period by cement bagging plants. These are cement plants which import

bulk cement into the country and only engage in the last operation of bagging the cement for

sale. With increase in production capacity, these plants also buy cement in bulk from the local

cement plants and bag them for the market.

The Major cement bagging plants in the country include:

1. Ibeto Cement Company

2. Dangote Terminals, Port-Harcourt – Terminals.

3. Dangote Terminal, Lagos

4. Atlas Cement Company – Floating Terminal

5. Eastern Bulkcem Company Limited

6. Quacem Limited/Topcem Cement Company

7. Essettee Nigeria Limited

8. Gateway Portland Cement

9. WestCom Technologies & Energy Services

10. International Cement Company

11. Bua International Limited – Floating Terminal

12. Management Enterprises Limited

13. Flour Mills Nigeria PLC

14. BUA International Cement

15. Gateway Mining Company

Minor Cement Bagging plants and operations include:

1. AVA Cement

2. Otedola Cement

3. Madewell Cement

4. Zane Cement Company

5. NICA Limited

6. Reagan Renaissance

7. Minaj Holdings

Below is a brief overview of some of the bagging plants

1. IBETO CEMENT COMPANY

The company has a bagging plant in Port-Harcourt with a capacity of 1.5m metric tonnes per

annum. It is currently in the process of building a cement manufacturing plant in Ebonyi State

under a technical partnership agreement with a Taiwanese company – Taiwan Cement

Engineering Corporation (TCEC).

2. DANGOTE TERMINALS

Dangote Group has two bagging plants – one in Lagos and the other in Port-Harcourt. The

Lagos terminal has two plants.

3. ATLAS CEMENT COMPANY

Atlas Cement Company is a floating terminal anchored at Onne Port. The plant has installed

capacity of 500,000 metric tonnes per annum and bagged 485,000 metric tonnes in 2008. The

company is principally owned by the Lafarge Group and thus handles all the cement import

allotted to the Group.

4. EASTERN BULKCEM COMPANY LIMITED

Eastern Bulkcem Company (EBC) Limited was incorporated in 1977 and commenced cement

bagging in 1981. The company has its facility on a water front at Rumuolumeni, Port-Harcourt,

Rivers State. EBC has bagging plant with an installed capacity of 1.5million tones per annum in

Port-Harcourt. The company bagged 900,000 metric tonnes of cement in 2008 at its plant in

Port-Harcourt. EBC also produces cement paper sack for bagging of cement.

5. QUACEM NIGERIA LIMITED/TOPCEM INDUSTRIES LIMITED

These companies which were hitherto separate entities in cement industry had signed MOU with

a view to pooling resources for establishing of a cement plant. The joint venture commissioned

its bagging plant located in Ikot-Abasi, Akwa-Ibom State in 2008. The bagging plant has an

installed capacity of 500,000 metric tonnes per annum. The company packaged 50,000 tonnes of

cement in 2008. It has also acquired a quarry site in Akamkpa, Cross Rivers State, where it

planned to install a crushing plant to produce clinker.

6. ESSETTEE NIGERIA LIMITED

Essettee Nigeria Limited owns a bagging plant located in Oron, Akwa-Ibom State. The plant has

not been commissioned and not operational. Under its medium term plan, the company was in

the process of securing a limestone deposit, where a mini cement plant was to be sited. It was

reported that the company is into partnership with Westcom Technologies in order to utilize its

cement import allocation.

7. GATEWAY PORTLAND CEMENT LIMITED

Gateway Portland Cement Ltd located in Abeokuta, Ogun State was incorporated in 2002. The

Company is currently engaged in bagging of bulk cement with fully operational packaging

facilities. The company has an installed capacity of 998,640 tonnes per annum and operated

10% capacity in 2008. The company had acquired a limestone deposit site at Oke-Oko in Ogun

State and also secured a partnership with Transorga Ag International of Zurich for the

development of acquired Greenfield site.

8. WESTCOM TECHNOLOGIES AND ENERGY SERVICES LIMITED

Westcom Technologies and Energy Services Limited was incorporated in 2003 and entered into

cement business in 2007. The company is presently into terminal operation of bagging of

cement. The bagging plant has an installed capacity of 900,000 tones and produce

150,000metric tones in 2008. In its investment programme towards backward integration, the

company has completed feasibility study of its cement manufacturing project and has also

signed technical, production and supply agreement for the project.

9. INTERNATIONAL CEMENT COMPANY, LAGOS

International Cement Company was incorporated in 1992. Its mode of operation is terminal

operation of bagging cement. It has an installed capacity of 1,500 metric tonnes per day.

Machinery/equipment for its terminal bagging operation has been delivered and awaiting

installation. The installed capacity of the bagging plant is 550,000 metric tonnes per year. The

company has acquired a green field site for its investment programme towards backward

integration. In that regard, it has concluded feasibility study on its green field, signed production

agreement with its technical partner from China while negotiation for funding of the project is

on-going. Land site preparations were in progress while the mining lease for limestone

exploration has been secured.

10. BUA INTERNATIONAL LIMITED

The Bua Group is one of the new entrants that was issued import license in June 2008. In that

regard, the company acquired a cement floating terminal for bagging imported bulk cement.

The Group’s cement products are being distributed from Lagos and Port-Harcourt ports due to

that versatility of the floating terminal. The Bua Group has also identified areas in Kogi and

Ebonyi States for citing of a cement manufacturing plant.

11. MANAGEMENT ENTERPRISES LIMITED

Management Enterprises Limited was incorporated in February, 1993 and entered into cement

business in the same year. The company has not yet commenced operation of bagging of

cement but has a complete platform of jetty for its terminal operation. It has acquired and

installed a bulk bagging plant and facilities which have not been put to use since installation in

2005. The bagging plant facilities have an installed capacity of 1.2 million metric tonnes per

annum.

3.0 Research Methodology

This study is expected to utilize a descriptive and analytical survey research design. This method

is deemed appropriate as it involves the collection of extensive and cross- sectional data for the

purpose of describing and understanding the development in the last 10 – 12 years in the

Nigerian cement industry.

The study is also expected to utilize primary data collected from field studies and secondary

data from various publications on the Nigerian cement industry by various agencies in the

public and private sectors.

3.1 Study Area

The study is expected to be conducted in the six geo political zones of the country and the

communities and cement plants and bagging plants in each zone. The structure of the cement

plants according to zones for the purpose of this study is shown in Table 7.

Table 7: The Zones and Cement Plants for the Study

S/

N

Zone Cement Plant Cement Bagging Plants

1.

South

West

Lafarge – Wapco – Ewekoro I Dangote Terminals - Lagos

Lafarge – Wapco – Ewekoro II International Cement Co, Lagos

Lafarge – Wapco - Sagamu Flour Mills

Dangote Cement PLC - Ibese Westcom Technologies and Energy Services

Ltd.

Purchem Industries Ltd.

2.

South

South

UniCem, Calabar Atlas Cement Company

Dangote Cement Plc - Calabar Ibeto Cement Company

Edo Cement Co, Ukpilla Eastern Bulkcem Company Ltd.

AVA Cement, Akoko - Edo Quacem Nigeria Ltd/ Topcem Nig. Ltd

Essettee Nigeria Ltd

3. South East NIGERCEM Eastern Bulkcem Company Ltd.

4.

North

Central

Dangote Cement Plc -

Obajana

Dangote Cement PLc - Gboko

5. North East Lafarge Plc – Ashaka

6. North

West

CCNN, Sokoto

3.2 Analysis of Industrial Policy Documents

The first step in the technical, economic and environmental risk assessment of the Nigerian

cement industry is the collection of all the relevant documents that was used in regulating the

period under consideration, especially the government industrial policy document of 2002 and

the details of the backward integration strategy adopted for the cement manufacturing industry

during the same period as well as all the fiscal document policies used to regulate the industry

from 2002 to date.

3.3 Survey and Sample Collection

Questionnaires will be administered to persons living within 20 kms of the cement plants in

selected locations in each zone of the study. Staff of the selected cement plants will also be

administered with another set of questionnaires to ascertain the health and safety challenges in

their work. In-depth interviews and Focus Group Discussions (FGDs) are also to be conducted

amongst community leaders, cement industry operatives, marketers and other interested

individuals involved in cement production in Nigeria.

In the selected communities in each zone, water and soil samples will be collected for testing

and the air quality of the communities and places around the cement factory will also be tested

and documented. The urban landscape and the socio – economic lives of the communities

around the cement plants will also be assessed and documented.

4.0 Scope of Research Work

The study shall be conducted under the following six sub – theme. These are:

1. Production and Energy Assessment

2. Environmental Performance.

3. Health and Safety Performance

4. Policy, Institutions and Regulatory Performance

5. Market, Competition and Pricing Performance

6. Sustainable Community Development

It is expected that there will be six sub – groups who will handle each of the selected sub –

themes across the six geo political zones of the country

4.1 Production and Energy Assessment

This group will examine the production and energy utilization performance of the cement

industry and will amongst other issues assess;

i. Raw material sourcing and supply to the cement industry

ii. Production Process

iii. Capacity Utilization issues

iv. Ability to meet market demands

v. Adopted technology vis – a – vis global best practices.

vi. Energy Utilization pattern.

vii. Energy supply

viii. Alternative energy plans and programmes

ix. Energy efficiency measures in place

4.2 Environmental Performance

The process of producing cement causes negative environmental externalities at all levels of

production. To make clinker and mix it to prepare concrete the material must be grounded and

heated to more than 1500 0C. Such energy intensive production releases NOx (nitrogen oxides),

CO2 (carbon dioxide), and SO2 (sulfur dioxide). All of these gaseous materials cause harmful

effects on the environment and contribute to the global climate change on earth. Cement alone

contributes about 5% of the world’s total greenhouse gases (Adam, 2007 and Loreti Group,

2008).

Not only do these gases contribute to global warming, they also contribute to poor air quality

that can cause weakening in human health and respiratory systems. When cement factories

become even more concentrated in the developing world, this means that children and people

living in these areas will be paying the price for construction firms to use the cement in Europe

or North America (Miller, 2009). Hence, the global cement industry can be characterized as

having global distributional inefficiency across space and time.

The environmental impact is further complicated through the harmful effects of resource

depletion. In order to make cement and burn the components at the aforementioned

temperature, the amount of fuel used –oil or coal—is very high. While clinker is not under the

threat of being depleted anytime soon, the economic costs of fuel resource depletion needed to

make the cement is under attack. Furthermore once the final product is produced, some solid

wastes remain as a result of the production process. Such solid waste, in countries with loose

environmental regulations or weak enforcement mechanisms, is thrown into the water or burned

in an uncontrolled location. This lack of oversight continues to cause levels of inequality that the

world cannot sustain in the long run. These environmental challenges have gone uncontrolled

because of the importance of cement for developing countries due to industrialization, export

proceeds, and infrastructure requirements.

The main environmental issues associated with cement production are emissions to air and

energy use. Other environmental issues include waste water discharges, and water pollution.

Quarrying activities associated with the cement industry impact land use, landscape

management and biodiversity.

This group will amongst other things examine the environmental performance of the cement

industry in Nigeria, through;

i. Estimation of air emissions

ii. Assessment of air quality

iii. Assessment of the impact of local nuisances such as noise/vibration, dust and visual

impact.

iv. Assessment of the impact of cement production on land use and biodiversity primarily

associated with quarrying operations.

v. Assessment of water quality of nearby rivers and streams around the cement plants.

vi. Current environmental management practices

4.3 Health and Safety Performance

The most important priority for cement plants globally with regards to their employee well –

being is the assurance of occupational health and safety both for its workers and other

contractor personnel. The cement industry is not nearly as advanced as some other heavy

manufacturing industries in the implementation of occupational health and safety management

systems.

There are a number of hazards inherent to the cement production process. Some of the health

challenges include exposure to dust and higher temperatures; contact with allergic substances

and noise exposure; while some safety issues include falling/impacts with objects, hot surface

burns and transportation.

Hence this group in the assessment of the Nigerian cement industry will examine the following

issues:

i. Current health and safety management system in the cement plants.

ii. Best practices vis – a – vis observed health practices.

iii. Health monitoring and reporting practices

iv. Specific occupational health challenges in the industry

v. Fatality analysis

vi. Fatality causes and prevention

vii. Product related health risks and related issues.

viii. Key risks and control measures.

ix. Current cement industry initiatives on health and safety.

4.4 Policy, Institutional and Regulatory Performances

Every industry is driven by policies of state, while the government institutions are empowered by

law to drive such policies and enforce the regulations stipulated in the policies and laws of the

nation. In the Nigerian experience, the cement industry has been driven by a new industrial

policy of government inaugurated in 2002. The major thrust of the policy is the backward

integration strategy. Also several government agencies have been involved in implementing the

policy including the Federal Ministries of Trade, Industry and Finance, as well as the umbrella

association of all cement manufacturers in the country, the Cement Manufacturers Association

of Nigeria (CMAN).

This group is expected to assess the policy, instruments and regulatory framework of the cement

industry in the past ten years. The group amongst other things will assess;

i. Identify, classify and assess the policy effectiveness of all the necessary policies and

legislation governing the operations of the cement industry in the country.

ii. Identify and assess the effectiveness of all the key institutions that have been involved in

the implementation of the policies and legislation governing the Nigerian cement

industry.

iii. Identify, assess and assess the key regulations governing the operations of the Nigerian

cement industry.

iv. Identify policy, institutional and regulatory gaps and inefficiencies.

v. Compare and contrast institutions, policy and regulatory practices of the Nigerian

cement industry and best global practices.

4.5 Market, Competition, Customers and Pricing Performance

The international cement market is one least regulated market on an international scale whereas

cement trade has been growing intensively in recent decades. While the amount of cement

traded has increased, the percentage of internationally traded cement to total cement

production remains in single percent digits (5% to 7%). This means that most of the cement

production exists to satisfy local production.

In recent times, cement production has been concentrated in the developing world (Miller,

2009). Such increased production of a capital – intensive industry means that the impact the

cement market is having on the local labour market is low compared to the impact it is having

on the capital market.

The price of traded cement varies by country and region due to interplay of multiple factors. The

pricing of cement globally is determined by factors such as relative production costs, taxes,

transportation and other institutional costs. The demand for cement is also considered to be

price inelastic due to lack of appropriate substitute. This can be seen with varying degrees

across the world today. In the UAE, for example, the price of cement has increased even though

the real estate market is in turmoil. In Egypt, even though there was reduction in steel prices in

2008-2009, cement prices soared. In North America and Europe the prices are fluctuating but

they are clearly on the rise (Portland Cement Association, 2009).

This can be attributed to the fact that even when private enterprise is not using cement, the

governmental demand on it is high as it needs it for infrastructure build-up. What is more

intriguing is that while the cost of transportation has decreased due to the drop in oil and

subsequent fuel prices, the price of cement has actually increased in real terms. Such evidence

only serves to reaffirm the necessity of cement and the high demand relative to the supply that

can cause the industry to withstand severe economic slowdowns around the world. It also shows

the ―resilience of cement pricing to external shocks.

With respect to the issue of market and competition, a better understanding of the different

dimensions that govern market competition is provided by the Porters five forces of

competition. These forces are: Rivalry; Threat of substitutes; buyer bargaining power; supplier

bargaining power and barriers to entry and exit (Porter, 2008).

Rivalry within the cement industry is moderate. This is due basically to two reasons. The first

reason is that because the structure of the market tends to be oligopolistic in different regions

around the world as a result of high fixed cost (approximately 10 million dollars a plant), this

creates a highly concentrated firm environment with limited rivalry. The second reason is that

because cement products are not differentiated, customers do not bare any cost by switching

from one product to another, creating the environment for competition and intense rivalry. The

second force is the threat of substitutes. Lack of substitutes –other products that are not within

the same industry but can be used instead—means that the industry does not face a credible

threat of competition. This represents the reality of the cement industry. No product exists to

date that can substitute effectively for cement. While construction firms can use less cement in

exchange for using other materials that have some cementitious quality, that substitution effect

is negligible on the market price of cement (United States Geological Survey, 2008).

The third force of competition is buyer bargaining power. This refers to the effect customers can

exert on a particular industry. Pure buyer power exists when only one buyer exists in the market

(monopsony). In this case power is entirely in the hands of the buyer. In the cement industry,

facts suggest that this effect is minimal. The power of consumers is limited due to the lack of

substitutes, the small number of cement firms (oligopoly), and the inelastic demand that

consumers have for the product. Buyers are said to be powerful if they are highly concentrated,

purchase a large amount of the product, or if there is product standardization. The last effect

exists but its impact is weak because of persistent shortages in the cement market. Given the

fact that the buyers in the cement market lack the characteristics that give them power over

producing firms, the competitive level of the industry judged through this force is very low.

Firms have an easier time setting price while buyers act generally as price takers.

Supplier bargaining power is the fourth force that Porter argues influences industries. Suppliers

if powerful can extract some of the profits that producing firms are making off consumers by

raising the prices of raw materials. In the inputs market for the cement industry, suppliers are

concentrated –but buyers are also concentrated. This means that initial bargaining is practically

on equal footing. Suppliers of cement industry are divided into two categories: suppliers of

transportation and suppliers of raw materials (clinkers). Cement manufacturers have argued that

price hikes in the cement industry are due to increases in the price of both transportation and

raw materials. This means that suppliers are powerful enough to force new prices on the cement

industry. However, the weakness of the final consumers relative to both implies that the burden

is mostly shifted to the price of the final product.

In general suppliers are powerful if there is a credible forward integration threat (suppliers can

buy producing firms), suppliers are concentrated (no switching opportunity), the cost is

prohibitive to switch suppliers, and/or if a supplier can rally up the final consumer (such as fair

trade farmers). In the case of cement the power of suppliers comes from their concentration

regionally and from the high cost in switching between suppliers. It is not easy for a cement firm

to buy clinker from China and ship it to Egypt or vice versa. This means that local raw material

production must be utilized and that local or regional suppliers have high bargaining power.

The final force that Porter uses to measure forces of competition within an industry is barriers to

entry and exit. High barriers to entry mean that firms already in the industry do not fear outside

competition. This means that rivalry amongst firms is not ―intense‖. In fact, incentives for intra-

industry cooperation in this case, or backhanded collusions such as cartels, are highly plausible.

Barriers to exit on the other hand means that firms already in the market are ―locked in. This

can result from the firm’s inability to sell the assets if it decides to leave the industry. Barriers to

entry and exit can be seen in four different ways. First, government creates barriers by limiting

the number of licenses it sells for production. Cement is energy intensive as well as highly

polluting; therefore entry to such a market has to be highly regulated in the eyes of many

governments. Second, patents create entry barriers. Patents on new production methods or

machines create difficulties for firms to enter. However, the cement industry is not a patent

dependent industry, unlike other industries such as pharmaceuticals. Third, assets needed to

produce cement cannot be easily utilized for another industry (i.e. the cement industry is highly

asset specific). This means that if a firm decides to enter into the market it must realize that a

cease in its production will be very costly. Finally, economies of scale can prevent entry. For

cement firms, neutralizing the high fixed costs requires a minimum efficient scale of production

that creates a strong barrier to entry. Overall, the cement industry has high barriers to entry and

high barriers to exit.

Porter’s five forces is a framework that looks at rivalry and consumer-firm-industry relations

from a ―market forces perspective. In the case of cement it is clear that the final consumer has

little say in the price because of the high inelastic demand. Production is very costly and

regulated in most areas which keep rivalry in moderation. The power of suppliers of raw

materials and cement firms forces the burden of price hikes to shift to the consumers. This

conclusion must be taken into account when comparing Porter’s model with the institutional

viewpoint, in order to come up with an effective framework to analyze policies related to the

cement industry in general.

The market niche refers to the segment of the market in which production supply meets with

the highly inelastic portion of demand, the latter being elastic at price extremes. It is widened or

narrowed through ―product innovation, advertising, (and) after sales services‖ (Kasper & Streit,

1998). In other words, it is that segment in a market which does not respond to little variation in

pricing. Whether it is due to the necessity of the product or loyalty for the product, a niche is the

single most important segment for which different firms try to compete.

The consumers of Portland cement can be divided into three categories: governments,

construction firms, and individual home owners. Assuming a downward sloping aggregate

demand curve, individual home owners would be the consumers on the demand curve that are

most elastic. Whether it is utilizing cement for repair or for home expansion, this segment will

always respond to price changes. On the more inelastic portion of the curve lie the construction

firms and the government. Government projects are time sensitive and generally relate to

infrastructure build up. This means that sensitivity to price is almost negligible as the time

constraints of project implementation dictate the government’s consumption of cement.

Construction firms will not respond to small changes in price but may respond if crashes (or

shocks) occur in the housing market. However, the presence of the niche –government and big

firms—means that the price of cement can be affected little by individual decisions. Pricing for

the niche takes place separately than that for individual consumers because the impact of

pricing is quite different.

Understanding how pricing can be tailored to different consumers will help in shaping a

framework to judge the regulation or deregulation of the cement industry. Having a strong hold

on the market niche; means that firms in the cement industry, will respond little to market

mechanisms. Whether it is large subsidies from the government or guarantees of large projects,

such activities lead to unintentional price fixingthrough institutional means. If cement firms were

insecure with the niche –the fear that governments or buyers may switch to other firms— then

cement producers would be more sensitive to pricing as determined by the market mechanism.

With the aforementioned fact, this group is expected to do the following:

i. Assessments of the market segmentation of the Nigerian cement Industry.

ii. The market structure of the cement industry in each zone of the country.

iii. The driving forces of market competition and control in the Nigerian cement industry.

iv. The factors that drive cement demand and supply in Nigeria.

v. Factors driving the retail price of cement in the country.

vi. Critical assessment of the pricing performance of cement in the country

vii. Examine all other factors that affect the market segmentation and prices of cement in

the country.

4.6 Sustainable Community Development.

A sustainable community is one that is economically, environmentally, and socially healthy and

resilient. It meets challenges through integrated solutions rather than through fragmented

approaches that meet one of those goals at the expense of the others. And it takes a long-term

perspective—one that's focused on the present and future, well beyond the next budget or

election cycle.

Sustainable communities are communities planned, built, or modified to promote sustainable

living. This may include sustainability aspects relating to equality, water, transportation, energy,

and waste and materials. They tend to focus on environmental sustainability (including

development and agriculture) and economic sustainability. Sustainable communities should

focus on sustainable urban infrastructure, social equity, and sustainable municipal infrastructure.

The intersection of all three areas of sustainability, economy, environment, and equality, are

necessary to the creations of a sustainable community.

Sustainable communities are places that have a variety of housing and transportation choices,

with destinations close to home. As a result, they tend to have lower transportation costs,

reduce air pollution and storm water runoff, decrease infrastructure costs, preserve historic

properties and sensitive lands, save people time in traffic, be more economically resilient and

meet market demand for different types of housing at different price points. Rural, suburban,

and urban communities can all use sustainable communities’ strategies and techniques to invest

in healthy, safe and workable neighborhoods, but these strategies will look different in each

place depending on the community’s character, context, and needs.

Thus, a sustainable community manages its human, natural, and financial resources to meet

current needs while ensuring that adequate resources are equitably available for future

generations. It seeks:

A better quality of life for the whole community without compromising the wellbeing of

other communities.

Healthy ecosystems.

Effective governance supported by meaningful and broad-based citizen participation.

Economic security.

A sustainable community's success depends upon its members' commitment and involvement

through:

Active, organized, and informed citizenship.

Inspiring, effective, and responsive leadership.

Responsible, caring, and healthy community institutions, services, and businesses.

Cement production takes place in new areas and creates communities due to the large number

of staff they employ who require schools, health facilities, banks and other social infrastructures

of modern living. Thus this group will focus on the activities taking place in the communities

created as a result of cement production activities to examine how sustainable they are by;

i. Assessing the level of infrastructure provisions over the years.

ii. Economic security

iii. Health ecosystem

iv. Community services

v. Effective community participation.

5.0 Reporting and Implementation Strategy

The expected duration of the assignment is twelve (12) months. The institute is expected to

appoint the necessary research staff and constitute the various teams with the requisite

education and experience in the six thematic areas, to conduct the assignment in the six zones

of the country including a national coordinator, who is competent in the subject area to

coordinate all the research activities in the zones.

5.1 Reporting and Deliveries

1. Preparation of Research Instruments

The institute through the national coordinator is expected to engage relevant research

consultants to prepare the research instruments for the commencement of the study. It is

expected that the instrument will include the survey plans, questionnaires and the reporting

format across the six thematic areas and the six zones across the country. It is expected that the

research instrument will be uniform across the country.

2. Mid – Term Project Progress Report

The national coordinator shall prepare a draft mid – term report of the study indicating progress

and findings of the study so far, the report should also indicate constraints and challenges being

encountered in the implementation of the assignment. The national coordinator is expected to

make to make oral presentation of the mid – term progress report to the stakeholders.

3. Draft Final Report

The national coordinator shall present a draft report of the study indicating the major findings

of the study, significant recommendations and other issues arising from the work. The national

coordinator shall make oral presentation of the draft report to stakeholders.

4. Final Report

The national coordinator shall prepare a final report of the study l report and make an oral

presentation.

5. Executive Summary

The national coordinator shall prepare a separate Executive Summary of the Final report suitable

for presentation to the stakeholders as instruments for further work in the future on the cement

production industry in Nigeria.

5.3 Implementation Schedules

The study will be completed in a period of 12 months starting from the date of commencement.

Indicative summary of the implementation schedule will be as follows:

Milestones Months

Commencement date of study 0

Appointment of national coordinator 1

Constitution of project teams at zonal and national level 2

Meeting to review teams and commence study 3

Project implementation 6

Mid – Term Project Progress Report 6

Meeting to review mid – term project progress report 7

Draft reports 11

Meeting to review draft reports 12

Final report 13

Meeting to review final report 14

Project Executive summary 15

5.4 Competencies

For the effective implementation of the study; the following professional competencies will be

required.

i. Engineers – Mechanical, Electrical and Chemical disciplines.

ii. Environmental practitioners

iii. Environmental health specialists

iv. Community Development practitioners

v. Economists/ Sociologists and Political Scientist.

vi. Agricultural/Rural development practitioners

vii. Development practitioners