In a move that will raise the
stakes in the rapidly evolving Nigerian cement market, leading cement
manufacturer, Dangote Cement Plc has announced huge cuts in the price of the
essential product.
A step that will make cement
cheaper than it has ever been since 2005, the new price regime announced by the
Group Managing Director of Dangote Cement, Mr. Devakumar Edwin, said the
Company has pegged the Dangote 32.5 cement grade at N1,000 per 50 kg bag, while
the higher 42.5 grade is to sell for N1,150 per bag.
The new prices exclusive of the
Value Added Tax (VAT), represents about 40 per cent discount on the prevailing
market price of the product which is currently sold for N1,700 irrespective of
the grade, across the country.
Edwin said the move is in line
with the company's commitment to the nation's dire need for the development of
infrastructure and to boost the federal and state government's ongoing effort
to reduce the near 20 million housing deficit in Africa's largest economy.
"We recognize the need for
an increase rapid response to the huge infrastructure and housing deficit in
the country, and one of the ways of addressing the issue is bringing the price
of building materials down to much more affordable levels especially cement
which within our own control as part of our own contribution to the
transformation agenda of the Goodluck Jonathan administration and the
attainment of key milestones in the Millennium Development Goals (MDGs),"
he said.
Since the commencement of the
implementation of the backward integration policy for cement in the country
over 12 years ago, the local production capacity of the product rose from less
than 3 million metric tonnes per annum to about 38 million metric tonnes per
annum.
During the over
12-year period of the backward integration policy, nearly $20
billion has been directly and indirectly injected into the Nigerian cement
industry with Dangote Cement Plc accounting for 60 per cent of that spend
The GMD/CEO also noted that
Dangote Cement Plc will continue to ensure alignment of its corporate social
responsibility with its strategic business initiatives and will continue to
evaluate its pricing regime in Nigeria’s best interest.
Meanwhile, the timing of the
initiative has confounded industry watchers, who say that from experience, the
cement market is on the verge of entering the accelerated demand phase as the
raining season is tapering and the dry season which provides the opportunity
for increased construction and building activities is setting in.
Recently, in further compliance
with the ongoing Standards Organisation of Nigeria (SON) directive and
regulation on the various grades of cement and their prescribed uses, Dangote
cement launched its brand of the premium 32.5 cement grade, which has been
restricted to plastering use only.
The largest cement producer in
Nigeria noted that the move was to develop a full bouquet of cement types to
meet the varied needs of consumers for the different grades of cement.
Dangote with this move now
produces 42.5 for column casting, block making, decking and other general
purpose construction work that require high strength, while also producing the
premium 32.5 grade for rendering or plastering, flooring and other activities
that may not require intense cement strength.
The company produces on demand
the 52.5 grade for specialized construction of high strength structures such as
bridges, flyovers, sky scrappers among others.
The 32.5 grade of cement which
has the lowest strength among the cement grades was priced lower than the
others, selling for N150 lower than the price of the higher strength 42.5, a
price cut that has now been improved with the current initiative.
Dangote said in compliance with
the SON standard for cement quality and packaging, the lower 32.5 type on the
Dangote shelf will be clearly labelled as such, in order to prevent the problem
of misapplication and misuse of the product which has become rampant in the
nation's building and construction industry.
Alhaji Rasidi Adebowale, the National
President of the Block Moulders Association of Nigeria said he received the
news with much happiness especially what the price reduction holds for his
members in Nigeria. He expressed the hope that the new price review will
translate to reduction in the price of blocks
In his own comment, Alhaji Okunola
Abegunde the Lagos State Chairman of the Block Moulders, said had all along
been looking forward to a time like this when the price of cement would jump
down from the roof top it has always been.
President of the Nigerian Institute
of Architect Arc. Bruno Niyi hailed the decision by Dangote Cement Plc on the
price reduction and urged the management of the company to sustain the new
price regime and ensure it is not hijacked by the profiteers.