Dangote: We Lose Multi-Million Dollars to Meet Nigeria’s Cement Demand

178 Viewed Obiajulu Joel Nwolu 0 respond
Dangote: We Lose Multi-Million Dollars to Meet Nigeria’s Cement Demand
Obiajulu Joel Nwolu

The management of Dangote Cement Plc has said that cost of cement is cheaper in Nigeria compared to Ghana and Zambia and that it is encountering losses in dollar revenue to meet the demand in Nigeria.

The group in a statement issued on Tuesday in Lokoja by Devakumar Edwin, the company’s Group Executive Director in charge of Strategy, Portfolio Development, and Capital Projects, said the company could not control the cement’s price in the open market.

“To ensure that we meet local demands, we had to suspend exports from our recently inaugurated export terminals, thereby foregoing dollar earnings,” he said, adding that the company also reactivated its 4.5 million ton capacity Gboko plant.

“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,” it claimed in a statement amid claims the price of Dangote’s cement is higher in Nigeria than elsewhere.

The group stated that the price of a bag of cement from its factories and plants in Obajana and Gboko was N2,450 and N2,510 at Ibese, including the Value Added Tax (VAT) as of April 12.

The Executive Director noted that the clarifications was informed by the recent insinuations that the company sells cement in Nigeria at higher prices relative to its sales in other countries, particularly in Ghana and Zambia.

Though the company had direct control over its ex-factory prices, Edwin said it could not control the cement’s price in the open market.

He added, “This is all in a bid to guarantee that we meet demands and keep the price of cement within control in the country. Over the past 15 months, our production costs have gone up significantly.

“About 50 per cent of our costs are linked to the USD (dollar), so the prices of critical components such as gas, gypsum, bags, and spare parts; have increased significantly due to the devaluation of the Naira and VAT increase.

“Despite this, Dangote Cement has not increased ex-factory prices since December 2019 to date while prices of most other building materials have gone up significantly.”

This post was written by Obiajulu Joel Nwolu.

The views expressed here belong to the author and do not necessarily reflect our views and opinions.

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