A week ago, the Minister of Works, Senator David Umahi, stired the hornet’s nest in the cement industry when he announced that he would dialogue with cement manufacturers to reduce the prices of their products.
Also fanning the issue was a social media post that accused Dangote Cement for selling cement in Nigeria at significantly higher prices relative to other countries, particularly the Republic of Benin, and other neighbouring countries.
The three major producers in the industry are Dangote Cement; BUA Cement and Lafarge Africa Plc.
The Minister told the public that contractors have been complaing over the high cost of cement in the country and that importing the product would be cheaper.
“I’m going to be running figures with them – cement manufacturers, to check the cost of cement if we import it, and the cost they are giving us here,” said Umahi.
“A lot of contractors have complained that it is cheaper to import, but we are not allowed to import cement because we have to help the cement industries, but they also have to be reasonable with us if we are going to be patronising them.”
“There is a need to use concrete technology. It’s going to make our roads last for a minimum of 50 years.”
“We are looking at all these things. How do we cut down costs? Because the primary issue is also the cost of construction.
“We are looking at the figures but it looks like a lot of contractors are not willing, but I will make them to make the change – we are all engineers.
“I am telling them your profit, I will protect whatever thing you want to make but, let’s help Nigeria, let’s build a road that will last and the funny thing is that the government – the President will give out the money.”
In responses to the threat of a possible policy somersault in favour of importation of the products, the Chairman of BUA Group, Abdul-Samad Rabiu, said that BUA Cement has concluded plans to reduce the cost of its cement across the country as part of efforts to support the federal government’s economic plans.
” The idea of increasing production capacity is to see how we can drop prices on our part to support the government’s efforts because importation will not be the best solution,” he said.
Rabiu, had during the 7th Annual General Meeting of Bua Cement held this week in Abuja, said that the company intends to achieve its target by improving the production capacity of its cement-producing plants.
“By the end of the year, we intend to have two more production lines on stream which will boost our production capacity by at least 40 per cent to 70 million tons.
” Our check in Cotonou, the commercial capital of the Republic of Benin indicated that cement sells between CFA 3,495 and CFA 4,500, which at the current exchange rate of CFA 1: NGN 1.43 is between N4,997 to N6,435 per bag.”
He noted that the average price of cement in Nigeria is N4,500 which translates into N90,000 per ton or $100.
” So if the government threatens to start importing cement, it will even cost them more because the forex is now high and when you bring it through the ports, you must pay taxes, trucking and other levies which will add to the price,” he noted.
In another reaction, Dangote Cement’s Group Managing Director, Mr. Arvind Pathak, said that the price of a bag of cement from Dangote factories across Nigeria (as at 28th August 2023) was N4,010 in Okpella and N4,640 in Ibese, Objana, and Gboko.
He advised that it was important to distinguish Dangote Cement’s ex-factory prices from prices at which retailers sell cement in the market.
” Our check in Cotonou, the commercial capital of the Republic of Benin indicated that cement sells between CFA 3,495 and CFA 4,500, which at the current exchange rate of CFA 1: NGN 1.43 is between N4,997 to N6,435 per bag”, he stated.
Pathak added, that Dangote Cement is focused on delivering quality cement at the best price possible, despite the current inflationary environment.
▪︎Author: Franklin Ocheneyi