Northern Cement Company Plans to Double Production Capacity
- By Simeon Ogoegbulem
- Published July 11th, 2011
- News
- Unrated
Cement Company of Northern Nigeria Plc (CCNN) plans to double its production capacity within the next few years, BusinessWorld Intelligence can now disclose. CCNN, one of the cement companies that was privatized by the federal government a few years ago, aims at increasing its production from 329,000 tonnes in 2010 to 600,000 tonnes per annum.
Mr. Alf Karlsen, managing director of the company, said that plans are underway to seek authorization of its shareholders to raise N45 billion through a combination of convertible debenture (by way of rights), a rights issue and a public offer to finance a new one million clinker production line. Karlsen noted that if approved, the production line would be commissioned in 2014.
He noted that the expansion is being undertaken in order to ensure that CCNN, which was fully privatized over a decade ago, remains a competitive cement manufacturer in the country. He stated that the cement company have consistently increased its production capacity as it improved from 57, 000 tonnes in 2001 to the current level of 329,000 tonnes per annum.
Karlsen explained that the company’s catchment supply area remains the six Northern States of Kebbi, Sokoto, Kaduna, Kano, Zamfara and Jigawa. He added that the company’s supply chain could not be extended to other parts of the country due to high cost of transportation.
He stated that the company has spent N7.5 billion to upgrade existing production facilities and for investment in fixed assets. He added that further upgrading is in the works.
Towards this end, a new girth gear for one of the cement mills has been ordered at the cost of N110 million while another roto packer has been ordered at a cost of N225 million. The installation will take place in third quarter of 2011.
Mr. Alf Karlsen, managing director of the company, said that plans are underway to seek authorization of its shareholders to raise N45 billion through a combination of convertible debenture (by way of rights), a rights issue and a public offer to finance a new one million clinker production line. Karlsen noted that if approved, the production line would be commissioned in 2014.
He noted that the expansion is being undertaken in order to ensure that CCNN, which was fully privatized over a decade ago, remains a competitive cement manufacturer in the country. He stated that the cement company have consistently increased its production capacity as it improved from 57, 000 tonnes in 2001 to the current level of 329,000 tonnes per annum.
Karlsen explained that the company’s catchment supply area remains the six Northern States of Kebbi, Sokoto, Kaduna, Kano, Zamfara and Jigawa. He added that the company’s supply chain could not be extended to other parts of the country due to high cost of transportation.
He stated that the company has spent N7.5 billion to upgrade existing production facilities and for investment in fixed assets. He added that further upgrading is in the works.
Towards this end, a new girth gear for one of the cement mills has been ordered at the cost of N110 million while another roto packer has been ordered at a cost of N225 million. The installation will take place in third quarter of 2011.
