Dangote Cement Cheaper in Nigeria than Other West African Countries—Management
The management of Dangote Cement Plc has clarified that the price of a bag of cement from its factories and plants across Nigeria is cheaper than what is obtainable in other West African countries.
In a statement issued on Tuesday, the leading cement maker with a market share of 60 per cent explained that as at Monday, April 12, 2021, the price of the commodity stood at N2,450 at its plants in Obajana and Gboko, and N2,510 at its factory in Ibese, Ogun State, inclusive of VAT.
In the statement, the Executive Director of Strategy, Portfolio Development and Capital Projects at Dangote Group, Mr Devakumar Edwin, was quoted as saying that while a bag of cement sells for an equivalent of $5.1, including VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.
Mr Edwin noted that though the company has direct control over its ex-factory prices, it cannot control the ultimate price of cement when it gets to the market, advising that it is important to distinguish Dangote’s ex-factory prices from prices at which retailers sell cement in the market.
It was disclosed that these clarifications became necessary in view of recent insinuations that the company sells cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia.
Mr Edwin, therefore, frowned at intentional misinformation or demarketing allegedly sponsored by some individuals that Dangote sells its cement at higher prices in Nigeria relative to other African countries at the expense of Nigerians.
He described the allegation as false, misleading, and unfounded, while giving the media persons present at the press conference copies of invoices from Nigeria and some other African countries (Cameroun, Ghana, Sierra Leone, Zambia), and urging them to conduct independent investigations on the price of cement across the West African coast.
Mr Edwin maintained that Dangote Cement has no control over the prices charged by other cement manufacturers or the prices charged by retailers in the markets.
“The demand for cement has risen globally as a fallout of the COVID crisis. Nigeria is no exception as a combination of monetary policy changes and low returns from the capital market has resulted in a significant increase in construction activity.
“To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings. We also had to reactivate our 4.5 million ton capacity Gboko Plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of Cement within control in the country,” he stated.
“Over the past 15 months, our production costs have gone up significantly. About 50 per cent of our costs are linked to the Dollar so the cost of critical components like gas, gypsum, bags, and spare parts; has increased significantly due to the devaluation of the Naira and VAT increase.
“Despite this, DCP has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly.
“We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement.
“Still, we charge our customers only N300 – N350 per bag for deliveries within a 1,200km radius. We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far,” he further said.
Source: Business Spot Ng