As many people continue to groan under the burden of high prices of cement, Dangote Cement has revealed how much it sells to retailers.
A bag of cement costs about N3,500 currently, the highest in the history of the company.
Tongues have been wagging about the company’s founder, Aliko Dangote, with many saying he was exploitative, adding that he sold at a cheaper rate in some other countries.
The management of Dangote Cement said the price of a bag of cement from its factories and plants across Nigeria as of Monday was N2,450 in Obajana and Gboko, and N2,510 in Ibese, inclusive of Value Added Tax (VAT).
Saying it had no control over market prices, the company decried the insinuations that it sold cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia.
Group Executive Director, Strategy, Portfolio Development & Capital Projects, Dangote Cement Plc, Devakumar Edwin, who spoke at a media parley with senior reporters, explained 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 taxes.
As ‘The Nation’ reports, 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, noting that it is important to distinguish Dangote’s ex-factory prices from those at which retailers sell cement in the market.
According to him, while Dangote Cement has 60 per cent share of the market, other companies have the balance.
“DCP has no control over neither the prices charged by other cement manufacturers nor the prices charged by retailers in the markets,” Edwin said.
The News Agency of Nigeria also reports:
The management of Dangote Cement Plc. says that the price of a bag of cement from its factories and plants in Obajana and Gboko is N2,450, and N2,510 at Ibese.
Mr Devakumar Edwin, the company’s Group Executive Director in charge of Strategy, Portfolio Development and Capital Projects, stated this in a statement he made available to newsmen in Lokoja on Tuesday.
He said that these were the prices of cement which included the Value Added Tax (VAT) as at April 12.
According to him, the clarifications become necessary in view of the recent insinuations that the company sells cement in Nigeria at higher prices relative to how much it sells it in other countries, particularly in Ghana and in Zambia.
” 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,” Edwin explained.
He said 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 open market.
Edwin frowned at what he called “intentional misinformation ” that Dangote was selling its cement at higher prices in Nigeria relative to other African countries at the expense of Nigerians.
” This allegation is false, misleading, and unfounded,” he said.
He attributed the high cost of cement in Nigeria to the global rise in demand for cement 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 demands, we had to suspend exports from our recently inaugurated export terminals, thereby foregoing dollar earnings,” he said.
He said that the company had also reactivated its 4.5million ton capacity Gboko Plant which was closed down four years ago and the company is running it at a higher cost.
“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 , so the costs 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 till date while prices of most other building materials have gone up significantly,” he said.
He said that the company had only adjusted its transport rates to account for higher costs of diesel, spare parts, tyres, and trucks’ replacement.