…suggests that Nigeria’s price is comparable to or lower than prices along the West African coast.
The price of a bag of cement from Dangote Cement Plc’s factories and plants across Nigeria (as of 12 April 2021) is N2,450 in Obajana and Gboko, and N2,510 in Ibese, inclusive of VAT, according to the company’s management.
In light of recent allegations that the company sells cement in Nigeria at significantly higher prices than in other countries, especially Ghana and Zambia, the clarification was made.
Devakumar Edwin, Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, disclosed that while a bag of cement costs $5.1 in Nigeria, including VAT, it costs $7.2 in Ghana and $5.95 in Zambia ex-factory, including all taxes. He explained that while the company has direct control over its ex-factory costs, it does not have control over the final price of cement once it reaches the market. He stressed the importance of distinguishing between Dangote’s ex-factory prices and retail prices for cement in the market.
As a result, he frowned on deliberate misinformation or demarketing, allegedly funded by some individuals, claiming that Dangote sells its cement in Nigeria at higher prices than in other African countries, putting Nigerians at a disadvantage. He characterised the accusation as baseless, misleading, and unfounded, while handing out copies of invoices from Nigeria and other African countries (Cameroun, Ghana, Sierra Leone, and Zambia) to the press present at the press conference and urging them to conduct independent investigations into the price of cement along the West African coast.
Edwin went on to say that while Dangote cement has a 60% market share, the remaining 40% is held by other firms. DCP has no influence over the prices paid by other cement producers or by industry retailers.
He further explained that
â€œDemand 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 4.5m 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.â€
â€œOver the past 15 months, our production costs have gone up significantly. About 50% of our costs are linked to USD so the cost of critical components like: gas, gypsum, bags, and spare parts; has increased significantly due to 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 â€“ 350 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 farâ€ he said.