Sunday, August 1, 2021

Our cement price didn’t exceed N2,510 in Nigerian factories -Dangote

The management of Dangote Cement Plc has said its cement price has not exceeded N2,510 per bag at its Nigerian factories, adding that the rate is lower than those of other west African countries.

It made the clarification following insinuations that the company sells cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia.

During a briefing in Lagos, the company said as at April 12, 2021, a bag of cement sells for N2,450 at the Obajana and Gboko factories, and N2,510 in Ibese factory, inclusive of Value Added Tax (VAT).

Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, Devakumar Edwin, said while a bag of cement sells for an equivalent of $5.1 with VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia inclusive of all taxes.

He said 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 as 40 percent of the transporters of its products are third party.

He described the allegation as false, while giving the media persons present at the press conference copies of invoices from Nigeria, Cameroun, Ghana, Sierra Leone, and Zambia to verify.

“Demand for cement has risen globally as a result of the COVID-19 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 tonne capacity Gboko plant which was closed four 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 also said the company is rounding up on the fifth line at its Obajana plant in Kogi state that will produce three million metric tonnes per annum, as well as the Okpella plant in Edo state with another 3m MT, in two and half months.

In the past 15 months, the company said production costs have risen and about 50% of the costs are linked to dollars over components import.

“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 – 350 per bag for deliveries within a 1,200 kilometre radius. We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far.”

Meanwhile on Dangote Group’s petition on sugar industry development to the federal government against BUA, another conglomerate, Edwin said: “This matter is in court and we will not like to go into details.”

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