Demand-Supply Gap: Dangote Cement Says Okpella Plant Nearing completion
The management of Dangote Cement Plc, on Monday said it remains committed to ensuring availability of cement products across the country Nigeria and beyond, hence its sustained investment in the sector.
Addressing newsmen in Lagos, the company’s newly appointed Group Chief Sales and Marketing Director, Rabiu Umar said a new plant in Okpella, Edo State, is billed to commence operation very soon, as part of this resolve.
This, he said, is in addition to its Gboko, Benue State plant, which has not worked over the last couple of years, but has been re-started “all in a bid to make sure that there is enough production.
“We have also increased the capacity of our Obajana Plant and very soon, I am sure the market will be flooded with enough products. You also need to note that other operators are also increasing their capacity,” he assured further.
He noted that Dangote Cement is aggressively building up more capacity as it recently invested in a new line that has been completed in Obajana Plant and the line is waiting for the power plant for it to commence operation.
Umar explained that the demand for cement has risen globally as fallout of the COVID-19 crisis, with Nigeria not an exception, given the combination of monetary policy changes and low returns from the capital market that has resulted in a significant increase in construction activity.
Continuing, he said: “We got into COVID last year and immediately after COVID there is a surge in demand and this is not particular to Nigeria alone, a couple of countries across the world are also experiencing the same; Mexico, South East Asia, among others.”
He explained that “in every business, what drives the price is the demand and supply. Now as a business we have not increased our price up until this point. So therefore, what has happened in price increment in the cement products are forces of demand and supply.”
Continuing, Umar said although the company has direct control over its ex-factory prices, it cannot control the ultimate price of cement when it gets to the market. He advised that it is important to distinguish Dangote’s ex-factory prices from prices at which retailers sell cement in the market.
The marketing chief further assured that the company is working at ensuring that it increases the supply of the product in the market, noting that to make the product available to the end users, the Company is bringing in 2,000 brand new trucks to ease distribution bottlenecks.
“We are buying these trucks and putting them out there to make sure that the distribution is also taken care of. This new development will lead to additional thousands of direct jobs in the country; apart from both direct and indirect jobs the plants will also create.
“Globally, by the time we are done, we believe that the additional capacity we will put on the market compared to what we have in the market today is probably the size of each of our competitors in terms of the additional volume that we will put in the market. And we believe that should help to manage the tension in the country as far as the situation with the skyrocketing prices of cement is concerned.”
Photo caption: Rabiu Umar, Group Sales and Marketing Director, Dangote Cement Plc, making a point during his introduction to the media on Monday, May 17, 2021, in Lagos. He is flanked by Funmi Sanni, the company’s Marketing Director; and Anthony Chiejina, Group Chief Branding & Communications Officer, Dangote Industries Limited.