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Published On: Fri, Jul 4th, 2014

Kwaranga’s Midas touch at AshakaCem

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By Peter Oguche

hen a holder of MSc. Corporate Governance and Finance from one of the prestigious, UK Universities, with over 21 years cognate experience in banking, pension, manufacturing and trading found himself in the coveted position of Chairman of the Board of Ashaka Cement (Ashakacem) he knew he is now a global player in an industry with a forecasted market size of $394,553 million dollars by 2016.

That’s 45 year old Umaru Kwairanga, from Gombe State, returning home to chair and give leadership to the board of Ashakacem that was incorporated when he was virtually five years old. Nigeria’s Ashakacem is now a subsidiary of one of the world leaders in cement production, LAFARGE.

Last April the merger of the Swiss company Holcim and Lafarge, a French company was announced. With capacity of producing some 400 million metric tons, the new company become the largest producer of cement in the world beating the combined 345 million metric tons output of Anhui Conch and CNBM, the two major Chinese producers.

In the same month Kwairanga’s Ashakacem was holding a ground-breaking ceremony in Gombe for its planned capacity expansion from 850 tons to 4 million tons per annum contributing its quota to the 400 million tons capacity of its parent company.

Cement. which is made from clay and limestone, is a key building material which is used basically as a binder. One of the major drivers for cement market is steady and constituent growth in construction industry not only in Nigeria but globally. No doubt Nigeria is witnessing a boom in the construction industry. There is clearly a huge demand in the country if one looks at the race among many state governments and private developers to close the housing deficit in the country. Projects such as the centenary city in Abuja, which the President recently commissioned is an indicator of the kind of positive development in the construction industry.

What does the AshakaCem expansion means for the economy of Gombe State, the people of the State, the community round the sprawling industrial complex and to the nation in general?

AshakaCem is injecting about N120 billion in this expansion exercise to build a new cement factory with installed capacity of 2.5 million tons per annum and a 64 mw power generating plant. The funds will be sourced from the parent company LAFARGE, Nigerian Commercial Banks and Central Bank of Nigeria’s industrial intervention funds. This project will throw open employment opportunities. It will substantially increase the employee base from its current 640 staff level and boost staff morale and increase motivation because of the huge opportunity for trainings and development.

In today’s age of heightened environmental protection advocacy, Ashaka is treading carefully and systematically to address the associated environmental concerns such as relocation of local communities away from the hazards’ of its quarries.

Cement occupies a very important position in world economy that today its consumption per head of population is an index for measuring economic development. This is true when we look at the statistics. As a result of the global financial crisis affecting Europe most of its cement producing countries such as Italy, Germany have lost their rankings. While most of the progressing countries in terms of ranking are the emerging markets. For example in 2013 Brazil moved to the 5TH position from 15th, Turkey from 10th to 6thand Vietnam from 17th to 8th position. And China until the merger of Lafarge and Holcim this year it was leading producer with 2300 million tons in 2013 follow by another emerging market India with 280 million tons.

Asia pacific is the largest consumer of cement market in the world followed by North America and Europe. Based on types of cement, white cement is largely used to increase the visual appearance of construction. Portland cement is used in commercial, residential, industrial and public infrastructure. Mortar is used in brick works, and road surfaces. Blended cements are heavily used in ready-mix concretes.

Some of the major players operating in the global cement market include Lafarge-Holcim (France/Swiss), Anhui Conch (China), Cemex (Mexico), Heidelberecement (Germany), Italcement (Italy), Ultratech (India), Eurocement (Russia).

Although Africa contributes only 5 percent of the global output of the cement the expansions of cement industry such as AshakaCem is harbinger as Africa rises. And it is consistent with the world cement consumption which is expected to record sustained growth during 2013 – 2016. According to PCA, growth is expected to be characterized by weaker economic conditions in China and many of the industrialized economies’ cement markets. World cement consumption is expected to grow 3.6% in 2013, 4.0% in 2014, and remain near 4.0% growth during 2015 – 2016.

With three degrees in Business administration and Finance, Umaru Kwairanga the Sarkin Fulani of Gombe understands global finance and its dynamics. He has to manage his tight schedule between his various businesses. Currently the CEO and Group Managing Director of Finmal Finance Services Limited, He is also a Director in many other companies such as JAIZ Bank Plc, Incar Power, Penman Gombe & Waila Microfinance Banks and Central Securities Clearing System Plc (CSCS). Also the President of CPIN (Certified Pension Institute of Nigeria) and Member Presidential Committee, Nigerian Industrial Revolution Plan (NIPR).

His involvement in policy and strategy formation in the public sector through participation in intellectually challenging projects such as Vision 2020 business support group and technical working group and active membership of the Board of Gombe State Investment and Property Development have by no means equipped Kwairanga for his position at AshakaCem.

No doubts the favorable conditions in the construction industry of the emerging markets in sub-Saharan Africa represented by Nigeria’s rising economic boom is fuelling the growth AshakaCem is recording in recent years. Equally contributing to the growth is quality of leadership of its Board under Kwairanga in particular and the management of the company in general.

Peter Oguche can be reached on unclepets@gmail.com

 

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