We Haven’t Raised Our Ex-Factory Price Since 2019- Dangote Cement

The management of Dangote Cement Plc, on Thursday, debunked recent insinuations that it sells cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia.

A statement by the company quoted Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, Devakumar Edwin, as saying it “has not increased ex-factory prices since December 2019 till date.”

He gave the prices of cement as at April 12, 2021, is N2,450 in Obajana and Gboko, and N2,510 in Ibese, all inclusive of Valued Added Tax, following which a bag of cement sells for an equivalent of $5.1, including VAT in Nigeria; $7.2 in Ghana; and $5.95 in Zambia ex-factory, inclusive of all taxes.

This, he explained, is despite the fact that prices of most other building materials have gone up significantly, noting that the company only factored rising input costs to its transport rates.

Edwin

According to Edwin, the company adjusted its “transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement.”

“Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius. We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far” he said.

Although the company has direct control over its ex-factory prices, he noted, it cannot control the ultimate price of cement when it gets to the market, stressing the importance of distinguishing the ex-factory prices from that of the retailers.

He frowned at what he tagged the intentional misinformation or demarketing, sponsored individuals he did not name, alleging that Dangote sells its cement at higher prices in Nigeria relative to other African countries at the expense of Nigerians.

He described the allegation as false, misleading, and unfounded, urging the media to conduct independent investigations on the price of cement across the West African coast. Electronic copies of sales invoices from the various countries were mailed to our correspondent for sighting.

Edwin further explained that despite holding 60% market share, Dangote Cement neither has control of the prices charged by other cement manufacturers, nor those of retailers.

In his words, “demand for cement has risen globally as a fallout of the COVID 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 demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings.

“We also had to reactivate our 4.5m ton capacity Gboko plant which was closed four years ago and run it at a higher cost, all in a bid to guarantee that we meet demand and keep the price of cement within control in the country,” he stressed.

Continuing, Edwin lamented the significant increase in production costs over the past 15 months, of which 50% of costs is linked to USD.

As a result of this, he explained further that “the cost of critical components like: gas, gypsum, bags, and spare parts has increased significantly due to devaluation of the Naira and VAT increase.

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