‘Reduction in LPFO price to boost local production’

BUA Group has said that reduction in the price of Low-Pour Fuel Oil (LPFO) will cut costs for most manufacturing companies and consequently boost local production.

The Federal Government recently reduced the price of LFPO from abound N77.94 per litre to N51.38 per litre. This will impact positively on the manufacturing sector as the majority of local companies use LPFO, partially or fully.

Abdulsamad Rabiu, chairman, BUA Group, said this move, in addition to the ongoing resuscitation of local refineries, will kickstart industrialisation in the country.

According to Rabiu, the ongoing resuscitation of refineries has already led to increased supply of LPFO to its Sokoto Cement Plant. He said the Cement Company of Northern Nigeria (CCNN), the makers of Sokoto Cement, is the only operating cement plant in the whole of North-West Nigeria and the single largest employer of labour in Sokoto State, adding that the company’s efforts have been slowed down over the years due to infrastructure challenges, including erratic supply of fuel oil to the plant.

“With the recent appointment of the new group managing director for NNPC by the Buhari-led government, we are beginning to see the impact of improved production at the refineries. Last year, CCNN spent about N7billion on fuel oil alone,” Rabiu said, in an interview.

“However, this welcome development will bring about improved, cost-effective production and efficient capacity utilisation at Sokoto Cement which should further engender a sustainable pricing regime that will make cement more affordable in the North Western region in the medium term,” he added.

He further said that the moves of the current administration to ensure optimal operations at the nation’s refineries will rejuvenate moribund industries. “For instance, access to cheaper fuels associated with increased production at the refineries is already stimulating the rejuvenation of key industries including textiles and manufacturing in the North. I believe this effect will be replicated across the nation where certain industries are dependent on the refineries as their primary sources of fuel,” the BUA chairman said.

On the new line currently being added by BUA Group in Sokoto, Rabiu said that at $300million, the project is currently the single largest private investment in the North-West region, stressing that BUA Cement is committed to ensuring the timely completion of the project in 2016, which is expected to add an additional 1.5million tonnes per annum to CCNN’s current 500,000tpa capacity as part of the group’s Cement Strategy for Nigeria.

Although the additional line will come with coal as the primary source of fuel, LPFO will still be used as a backup fuel at the plant.

“To further consolidate our position as a major player, we will continue to pursue our mid-term cement expansion strategy vigorously and are currently exploring opportunities for further expansion especially in Nigeria” he added.

ODINAKA ANUDU