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| Group Managing Director of Dangote Cement, Mr. Devakumar Edwin |
In a giant 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.
In 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 50kg 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 governments' ongoing effort to reduce the near
20 million housing deficit in Africa's largest economy.
"We recognise the need for a dramatic
increase in the 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
is within our own control. This is 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 2 million
metric tonnes per annum to about 38 million metric tonnes per annum currently.
During the over 12-year period of the backward
integration policy, over $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
would continue to ensure alignment of its corporate social responsibility with
its strategic business initiatives and would 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 entering the high 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 varying
needs of consumers for the different grades of cement.
Dangote with this move now produces 42.5 grade
for column casting, block making, decking and other general purpose
construction works that require high strength, while also producing the 32.5
grade for rendering or plastering.
The company produces on demand the 52.5 grade for
specialized construction of high strength structures such as bridges, flyovers
and 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 is part
of the announced price regime.
Dangote said in compliance with the SON standard
for cement quality and packaging, the lower 32.5 type on the Dangote shelf
would be clearly labelled as such, in order to minimise the incidence of
building collapse in the nation's building and construction industry arising
from the misapplication of different grades of cement.
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 would translate to
reduction in the price of blocks.
In his own comment, Alhaji Okunola Abegunde, the
Lagos State Chairman of the Block Moulders, said he had all along been looking
forward to a time like this when the price of cement would crash and allow the
low income group to become house owners.
Chairman of Coalition Against Building Collapse,
Kola Ojewuyi, said the downward review of prices has confounded the critics of
Dangote Cement who had earlier condemned the campaign embarked upon by company
on the adoption of 42.5 grade as a ploy to increase the price of the commodity.
President of the Nigerian Institute of Architects
Mr. 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 profiteers.
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