The Konkere Wars Part II: Starring Alhaji as V. V. Putin

Fellow Nigerians, It is with much sadness that I have to write this piece.

You will recall that in late 2012, there was an outbreak of hostilities in Nigeria’s ‘nascent’ cement industry. This compelled me to write The Konkere Wars in January 2013. Shortly after, there was an outbreak of peace and the belligerents sheathed their swords. Alas, this peace was not solidified and only a few months ago we began to witness sabre rattling in the industry. War is afoot yet again.

Whereas the last dispute was the ‘War of The Glut’, this new conflict can be subtitled the ‘War of The Standards’ (WoTS). Let us examine the points as best as we can.

1. It is impossible to understand Nigeria without an appreciation of the role that faceless organisations play in the polity. Whereas it can take up to 3 weeks to register a legal company, a faceless organisation can be established, for any purpose whatsoever, in a maximum of 8 minutes. They are like special purpose vehicles except that they appear and disappear a lot quicker.

In the same way that it is impossible to chronicle the origins of World War I without including Gavrilo Princip, we cannot talk about WoTS without talking about ‘Mr. Tunde Ojo’. Who is he? Well, I don’t know, so you tell me. All I know is that he is the spokesman for a ‘coalition of civil society groups and professional bodies in the construction industry‘.

In the first week of February, this group burst on to the scene claiming they were going to start a campaign for the standardisation of cement production and importation in Nigeria. Specifically they said they wanted the government to enforce ‘42.5 grade’ as the standard in Nigeria i.e. anything below this should be banned.

This ‘press release’ (I don’t know what else to call it) was carried by virtually all the newspapers at the time. Here is the ThisDay version. It was pretty much the same in all the newspapers as a quick google search will show you:

A coalition of civil society groups and professional bodies in the construction industry is set to launch a major campaign for the standardisation of cement production and importation.

Specifically, the coalition said it would call on the relevant authorities to initiate actions to make 42.5 grade of cement the standard product in Nigeria.

It noted that nearly all the cement manufacturers and importers in the country are in the habit of taking advantage of the lax regulation and lack of enforcement to vary their pigmentation in favour of the lower grade cement (32.5), which in most cases, is used in building works, and seen to be partly responsible for building collapse.

Speaking on the development, the coalition’s spokesperson, Mr. Tunde Ojo, blamed the Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, for alleged complicity with manufacturers and vowed to mobilise block makers nation-wide against manufacturers and importers of poor quality cement

You can read the rest of the story at the link which goes into a bit of ‘technical’ detail about cement grades.

2. Another important thing to understand about Nigeria is the long standing and inextricable link between Nigerian journalism and the brown envelope – our journalism never met a brown envelope it could refuse. Once a faceless organisation has been launched, it can then be ‘brown enveloped’ into all the newspapers for prominence. This will explain why such a report was carried by all the newspapers for more than a week. It even became the subject of editorials in The Sun and Daily Independent and articles in The Vanguard (the exact same article appeared in ThisDay).

As I am told, it is not very hard or expensive to get a matter to ‘trend’ in our newspapers like this. And it is clear the newspapers were simply regurgitating what they had been fed without doing any checks or investigations of their own.

3. One week after the coalition announced its arrival on the scene, Ekanem Etim, the sales and marketing director at Dangote Cement called for regulation of the Nigerian cement industry to ward off the ‘threat’ from the coalition:

Dangote Cement is a key player in the industry and believes that Nigeria deserves the best. The SON approved 42.5mpa grade upon domestication of cement production and we believe the standard should not drop and upheld it.

“We believe we have to give back to the society so that the incidence of building collapse can be tackled and the use of poor building materials stemmed.”

According to Etim, the 42.5mpa cement grade possesses higher strength capability and can be used for concrete structures and columns, while the 32.5mpa grade can only be used for certain aspects of building construction like plastering and rendering, among others.

He added that over the last few years, the company had been engaged in educating block moulders and other cement users on the appropriate use of the product.

Etim called on SON to step in so that substandard cement would be taken off the market and the manufacturers would held responsible for the quality of their products.

He said, “How come during the import era, we were all compelled by the regulatory authorities to bring in 42.5mpa grade, but since 2012 when importation was banned, the same regulatory authorities are condoning the production of 32.5 grades?

“If SON says the standard is 42.5mpa, then every manufacturer should abide by that decision. To that extent, we believe that compliance is better so that Nigerians can get the best from what we produce

Who can argue with that? No sensible Nigerian can resist any moves that will put an end to buildings collapsing in Nigeria.

The ‘pressure’ was building. And something needed to be done.

4. A bit of digression to explain the Putin reference in the title of this piece. Vladimir Vladimirovich Putin – Liberator of Crimea – has been in charge of Russia for the better part of the last 14 years. One way he has held on to power is by ensuring that Russians never have a viable alternative to him. To this end, he has the habit of creating fake political parties and candidates to run against him periodically. Even dictators like to show some respect to democracy by giving off the appearance of a ‘fair’ competition.

Here’s an example from The Economist:

And the Kremlin debars any plausible opponents. Three of the men running against Mr Putin—Gennady Zyuganov of the Communist Party, Vladimir Zhirinovsky, the clown nationalist, and Sergei Mironov, the leader of Just Russia, a party initially created by the Kremlin as fake competition for Mr Putin’s United Russia—have for years been in the business of losing elections. The only fresh face is that of Mikhail Prokhorov, a liberal business tycoon. He actually has his own agenda, but was allowed to run despite this handicap because his support is seen as very narrow

Or as the writer Teju Cole recently put it:

Screen Shot 2014-03-18 at 19.18.50

5. Still staying with Putin. We have seen how the bureaucracy in Russia has broken all known speed records in its efforts to grant the people of Crimea their desperate wish to be part of Russia. Things that would normally take months if not years, all of a sudden only take a matter of minutes. 

Take this example from the New York Times from just a week after Russia entered Ukraine:

Russia’s takeover of Crimea is already so complete that commercial flights to Kiev from the region’s main airport, located outside Simferopol, the regional capital 50 miles from Sevastopol, now leave from the international terminal instead of the domestic one as they did until last week. The shift suggests that Kiev and the rest of Ukraine are now classified as foreign territory

As long as the end result is known ahead of time, everything else is a mere formality. This is an important point as we will soon see.

6. Last week, Dangote Cement Group announced that it had launched the higher grade 52.5N cement into the Nigerian market. Even if you don’t understand what this means, you can at least see that 52.5 is a bigger number than 32.5. In cement, big is better than small.

This world record-breaking achievement was widely covered in the newspapers:

To contribute to the arrest of the problem, allegedly caused by the preponderance of lower grade (32.5) of cement in the market, Dangote Cement announced the completion of the calibration of its factories across the country to produce 52.5 grade of the product. With this, the company becomes the first cement company in Africa to achieve the feat.

For about two months, major concerns had been raised by various interest groups, over the standardisation of the essential product. Stakeholders had warned that the prevalence of 32.5 cement grade in the market was a major cause of building collapse in the country, threatening to stage protests against cement manufacturers who produce the lower grade of the product.

I don’t know how easy it is to calibrate factory production, but what Dangote Group managed to achieve in just 2 months sounds spectacular indeed.

That was not all. The Group Managing Director of the company, Devakumar Edwin, explained further:

However, the Group Managing Director of Dangote Cement plc,  Devakumar Edwin, told journalists in Lagos that they had further demonstrated their commitment to delivering high quality and safe product to Nigerians by raising the quality bar beyond the high grade of 42.5 cement to a much higher grade of 52.5.

He said the company had commenced the production of the cement grade from all of its three plants in Ibese, Ogun State, Gboko, Benue State and Obajana in Kogi State.

Edwin said the cement giant had scored another first as the 52.5 grade of cement was being produced in Africa for the first time, thus attesting to the resolve of the company to be a leading international producer of the essential product.

Basking in the euphoria of the new achievement, Edwin disclosed that the new cement grade, which had been certified by the Standard Organisation of Nigeria (SON), conforms to the requirements of NIS 444-2003 and other relevant standards, would sell for the same amount as the lower grade 42.5 type.

The GMD stated that it costs more to produce the 52.5 grade but that Dangote Cement decided to sell at the same price in the interest of its customers and so as to make it affordable

If I am not mistaken, this is what is known as going above and beyond the call of duty. Not only did they exceed the call of the civil society groups, they magnanimously kept it at the same price. Greater love hath no company ever shown for its country.

7. So to recap – Mr. Tunde Ojo (I assume he’s a man) arrives from nowhere and shakes up the Nigerian cement industry. Newspapers are falling over themselves to tell us how important what he’s saying is. The biggest player in the market comes out to defend its reputation and ‘floods’ the market with a higher grade than is required.

All that is left is for the regulator to come out and ‘do something’. They did not disappoint. Just yesterday, the Standards Organisation of Nigeria (SON) announced that it was commencing a review of cement standards in Nigeria. Here’s how The Guardian reported it:

THE Standards Organisation of Nigeria (SON) Monday, commenced a process to review the standards of locally produced cement, as part of measures to address current raging controversy over quality of the essential building material being produced by the nation’s manufacturers as well as the rising profile of building collapse.

With the aid of a technical committee comprising of manufacturers, civil society organisations, academia, regulatory agencies and other stakeholders, the SON hopes to develop reviewed standards regulating the composition and conformity criteria for common cement alternatively known as the NIS 444-1:2003

An impressive technical committee has already been put together to ensure that the review goes according to plan.

There is more:

Although, a review process in developed climes is expected to take at least 36 months, the SON noted that it hopes to complete the process sooner than the timeline considering the prevailing situation of building collapse in the country.

Indeed, various stakeholders in the industry recently, raised concerns over the production of 32.5 grade of cement in the country, against the 42.5 grade, which SON earlier approved for imported brands, while some have begun a local production of higher grades of the product

You can see the alacrity with which the bureaucracy is moving. I don’t want to speculate but I suspect that that 36 month timeframe will be compressed to around 14 minutes for SON’s review.

Note also that Mr. Tunde Ojo has since disappeared from the scene. The work is almost finished.

Today, ThisDay also reported that manufacturers are now ‘fretting’ following SON’s announcement of the review:

It was a tension-soaked atmosphere yesterday in Lagos as the technical committee convened by the Standards Organisation of Nigeria (SON) began the review of cement standardisation in the country, with the primary objective of ensuring that only cement that guarantees safety of buildings and human lives is produced and sold in Nigeria.

The Chief Executive Officer of Lafarge Cement WAPCO, Mr. Joseph Hudson, Group Managing Director of Dangote Cement, Devakumar Edwin, Managing Director of UNICEM, Olivier Lenoir, and a representative of Ibeto Cement, all present at the technical committee review meeting, were visibly apprehensive over the possible outcome of the process.

Bearing in mind that depending on how the committee votes at the end of the session, the lower grade 32.5 cement may be eliminated from or restricted in the Nigerian market, cement manufacturers seemed to make their last ditch efforts to ensure that experts present at the meeting understood their points of view.

Just by reading the article, I can feel the tension, not to talk of those in the industry.

Dr. Joseph Odumodu, Director General of SON, did not mince words when giving the Technical Committee its marching orders:

We have seen a lot of building collapse in the country and we know that most of these have caused avoidable deaths and we cannot allow it continue. So in this meeting, we expect to get expert technical insights on the way forward in standardisation of cement.

The media has been awash with varied information about different classes of cement and so to bring succour to Nigerians, we have brought together a critical mass of knowledgeable experts to provide direction on the issue.

Many questions have been asked by Nigerians that need answers. To be sure, there is no substandard cement produced in Nigeria because we have cement standards well elaborated in the country. But there are  issues that must be addressed. For example, SON has established that people in the country, who go to the market to purchase cement for one construction activity or the other, do not actually know what they buy from the market.

“When the whole controversy began, we embarked on a basic survey and administered questionnaire to different people who are stakeholders in the building and construction industry, asking basic questions and the response revealed that the people did not actually know what they were buying from the market. When they get to the market they just ask for a cement and at best they ask for a particular brand name of cement. This invariably leads to misapplication of the product and to check this unfortunate situation, we have put this committee together.

I highlighted some lines above to remind you of how effective Mr. Tunde Ojo has been in this matter.

From point 6 above, we know who is NOT fretting. Before the exam, someone has already passed. So we can guess that the end result of this SON review will be to effectively reduce competition either by banning some players or increasing their costs. Both will have the same effect.

What Next?

The obvious question to ask is if 32.5 grade cement is really inferior to 42.5 or 52.5. Does using 32.5 grade really lead to building collapse? I am by no means a cement expert but simply looking around the internet tells me that 32.5 grade cement is sold openly on the market around the world i.e. it is not an illegal product.

What this suggests is that the 3 different grades have different uses not that one is superior to the other. Obviously, the type of cement needed to build a bridge cannot be the same strength required for building a house.

32.5 grade cement is for regular construction i.e. building houses and general use by consumers. 42.5 is mainly for precast work while 52.5 is for heavy-duty usage.

Here’s an education paper by Cemex in the UK which explains the differences between grades. It’s full of jargon so go straight to pages 7 and 8:

The standard strength class is the strength that will be achieved at twenty eight
days by a prism of cement, sand and water of a fixed composition tested in a
prescribed manner. There are three strength classes 32.5, 42.5 and 52.5. The
appropriate standard lists the exact requirements for determining the class and the
permitted range of strengths within each class

Nowhere will you find that 32.5 is ‘low grade’ while 52.5 is the ‘standard’.

It also begs the question as to why SON has mobilised such a ‘high powered technical committee’ to investigate something that can easily be found on the internet. There really is nothing to find here – 32.5 grade cement is not an illegal product, neither is it sub-standard. Indeed, using 52.5 grade cement for regular housebuilding might be problematic as I am made to understand.

The End

I love capitalism. I really do. But nothing is more painful than crony capitalism. Because not only does crony capitalism cheat consumers, it makes people who should normally be fans of capitalism – and all the wonderful things it does – become enemies of it.

When people start to believe the game is rigged, they start to hate the game and ask for a new game entirely. We should be wary of this. With the privatisation of the power sector for instance, we are slowly moving toward a private sector led economy in Nigeria. This should be a very good thing but we are seeing here an example of how easy it is to rig the game ultimately against consumers who will, rightly, feel that they exist simply to make some people rich. Even the regulator meant to protect Nigerians is openly in the pocket of the producers.

Nigerian cement is already one of the most expensive in the world. Anything that reduces competition must be resisted.

What exactly is the point of made in Nigeria cement when we have a 17 million housing deficit? Think about that.

FF 

P.S The Economist recently started a Crony Capitalism Index. There’s a long and interesting article which explains the index and crony capitalism in general. It’s here

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29 thoughts on “The Konkere Wars Part II: Starring Alhaji as V. V. Putin

  1. Very well chessified. I think the competitors in the cement industry (if they have any pulse left) would do well to read this – not that they don’t know already – before they ‘compete back’. Question is: with all the national honours etc, how do you compete against a force like Aliko?

    1. Here’s what a Professional Builder Friend (TA) had to say: “I have read through in a more relaxed fashion. I am NOT aware of any building that has collapsed because of use of ‘substandard cement’, especially when produced/bagged by the manufacturers. Time was when we used to have ‘rebagged’ cement, and I remember having bought such cement, like 10years ago or more that was more ash than cement. I align with the writer’s opinion totally on this. I think it is clear that the 32.5 grade is not sub-standard in anyway. To my mind, it is probably a case of choosing between buying a ‘toyota car’ and a ‘lexus car’. Cars, both they are; and other issues may come in. Cement (in block or in concrete) is not a stand-alone product. Those Building elements or components are designed to some strength, and as long as the design strength of the element is achieved, I doubt that there is any other issue. The cement that had been in the market, meets those strength requirements. I honestly think this is like a rehash of the ‘Indomie-noodles-killing-people’ episode when some brand was to be introduced about 2004 or so. I hope my thoughts on this make some bit of sense.” TA has a B.Sc Building, MSc Construction Management, & served on the Council of Nigerian Institute of Building for 7/8years, FNIOB, Registered Builder, over 25years experience covering Building and Civil works.

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  3. But why is Dangote Cement lying and claiming not to have increased the price of it’s cement, despite producing a 52.5 grade cement?

    The sole reason for the skyrocket

  4. First, I like the new theme/layout of your blog.
    Second, really appreciate that you were able to keep track of this and educate us.
    Third, this is a whole new level of rent-seeking and the cost of rent is pretty low. 😦

  5. Said it a long time ago, when states like Kogi gifted Dangote 400 (or 4000) hectares of land because of his “‘contributions to Nigeria’s economy’ that the day Dangote woke up on the wrong side of his bed, we would all feel it. Our government) has literally gift-wrapped and handed the country to him, happy to threaten heads of agencies who don’t do his bidding.

  6. truth is what Feyi has just described here is the new kind of colonialism going on in Nigeria at the moment…i call it ECONOMIC COLONIALISM and its just not happening in the Power Sector alone and the only way we can fight it is to counter it with an equally strong economic front. ….Uncle Alhaji…God bless his good heart has invested $300m into rice production in Nigeria. That singular investment is being targeted at producing all the rice consumption demand in Nigeria…u can expect importers of rice to have a very hard time after this investments matures….and can you blame him for investing? Certainly not…he has the money….question here now is …what do we the youths of this country do before we are economically colonized in Nigeria?

  7. ‘the privatisation of the power sector for instance, we are slowly moving toward a private sector led economy in Nigeria. This should be a very good thing but we are seeing here an example of how easy it is to rig the game ultimately against consumers who will, rightly, feel that they exist simply to make some people rich. Even the regulator meant to protect Nigerians is openly in the pocket of the producers.’

    Truth is what Feyi has just described here is the new kind of colonialism going on in Nigeria at the moment…i call it ECONOMIC COLONIALISM and its just not happening in the Power Sector alone and the only way we can fight it is to counter it with an equally strong economic front. ….Uncle Alhaji…God bless his good heart has invested $300m into rice production in Nigeria. That singular investment is being targeted at producing all the rice consumption demand in Nigeria…u can expect importers of rice to have a very hard time after this investments matures….and can you blame him for investing? Certainly not…he has the money….question here now is …what do we the youths of this country do before we are economically colonized in Nigeria?

  8. Feyi: You’ve done some interesting research here – when I first heard of this brouhaha, the first thing that came to my mind was “It is prejudicial for SON to claim that the reason for collapsing buildings in the country is because of substandard cement” – what about Building Engineers cutting corners by not applying the right amount of cement? And what about those that are actually doing shoddy jobs?

    1. As a Structural Engineer who has been involved in a significant number of projects within and outside Nigeria, I state categorically and stand to be corrected that the grade of cement is not a basic for structural collapse of a building. There are many reasons for structural collapse, the most prominent in Nigeria being concrete failure. Yes, Cement is a part of the composite material of concrete but to expect that an improvement in the quality of cement will result in a magical transformation of the quality (more accurately “strength” ) of concrete is laughable.

      Without being technical, there are different grades of concrete for different applications. I can use three different grades in one building depending on the Structural requirements. To say that a certain grade of cement is responsible for collapse is not engineering, its fallacy. Period.

      As per the state of building collapse, how many of our buildings are been executed by professionals? But that is a matter outside the purview of this discuss.

  9. Probably the best article of the year for me.
    I have always said “reading is only fun when it gives you a new insight”.
    Who wants to read tired regurgitated sh#t about stuff we already know?
    When people say an article is too long or boring,its probably cos it contains some tired shit they have seen before.

    1. Like!
      I have heard that if you cannot explain it to a six-year old, you don’t understand it well.
      Mr Aguntasoolo (Seyi Taylor) is in a class of his own.
      Great blog, great posts (all the time)!

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