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| Aliko Dangote, President Dangote Group |
Dangote Cement has crashed the ex-factory price of a 50-kg bag of the product from N1,500 to N1,350.
This is a further step taken by the company after the directive issued by President Goodluck Jonathan in May which forced cement stakeholders to work together to bring down the price of the commodity from about N2,500 to around N1,800 per 50kg bag,
According to the company, “Dangote Cement Plc. has announced a significant reduction in the ex-factory price of its product to N1,350 per bag.”
The company’s Executive Director, in charge of Sales and Marketing, Mr Ekanem Etim, briefing cement distributors at the weekend, said the reduction in its ex-factory price was in line with the company’s declared policy to make the product affordable to Nigerians as it expands its local capacity in the country.
Etim also informed the distributors at the meeting that the country would be self-sufficient in cement production, especially with the inauguration of Ibeshe plant of the company before the end of the year, with an installed capacity of six million metric tonnes of cement per annum. He used the opportunity to mention the price reduction at various depots in different parts of the country.
The Executive Secretary of Cement Manufacturers Association of Nigeria (CMAN), Mr James Salako, commended Dangote Cement, stating that it was in line with the objectives of the association. Salako said the commitment, which the association had repeatedly made that Nigeria would be self-sufficient in cement production before the 2013, was indeed a reality and efforts such as what Dangote was currently doing were “tell-tale-signs that this is going to happen”.
The CMAN executive said Nigeria would “definitely” become a self-sufficient cement producing nation, banking on the fact that Dangote’s Ibeshe plant in Ogun State, with six million metric tonnes of cement production capacity, would commence production soon.
He said the company hoped to pump 20.5 million tonnes of the product into the market with Obajana Cement Factory producing 10 million metric tonnes; Ibeshe, six million metric tonnes and Gboko Plant in Benue State with 4.5 million metric tonnes.
He also hinted on the 2.5 million metric tonnes per annum capacity Lakatabu cement plant already completed by Lafarge Cement WAPCO in Ewekoro, Ogun State, which would turn out its first cement by the middle of next month as evidence that Nigeria was now set to be self-reliant in cement production.
Also commenting on the cement price reduction, the Abuja Chamber of Commerce and Industry Mines and Agriculture (ABUCCIMA) said that it was a very well timed development, stressing that for a developing country like Nigeria, which required lots of cement to bridge the huge infrastructure gap, a reduction in cement price was most desirable.
President of ABUCCIMA, Mr Dele Oye, said the 10 per cent reduction in the price of a 50kg bag of cement would translate into huge gains for both ordinary Nigerians managing to build their own houses with direct labour and contractors carrying out huge construction projects.
According to Oye, “Despite the high inflation rate; increase in the price of diesel from N60 to N160 per litre; devaluation of the naira from N119 to N154 among several other factors, Dangote has crashed the ex-factory price of a 50-kg bag of cement below the N1,380 pre June 2008 price.”
To also effectively cushion the effect of transporting the products to the end users, the company had taken delivery of 5,000 trucks and 100 brand new bulk cement tankers to improve its distribution network across the nation for easy distribution.
The new trucks and bulk cement tankers, which are being deployed for the haulage of the product from its factories and various bagging plants to all nooks and crannies of the country, will significantly reduce the time lag between production and delivery to distributors.
Dangote Cement currently has presence in 14 different African countries.
The countries include: Zambia, Tanzania, South Africa, Congo (Brazzaville), Ethiopia, Cameroon (grinding), Sierra Leone, Cote d’Ivoire, Liberia, Ghana and Senegal, among others.
The expansion move, according to the company, was to ensure that Africa remains self-sufficient in cement production and making the products easily available and at highly affordable costs to the end users.
A United States-based rating agency, Boston Consulting Group (BCG), had listed the Dangote Group among the top 40 African Challengers, which are companies of African origin that have the potential to rival Fortune 500 Companies.
Some of the criteria used in making the selection included size, growth and international expansion. Dangote Group has 13 subsidiaries spread all over Nigeria. All these enhanced its positive rating.
While a whopping $400 million was invested in Zambia for the construction of the plant, Dangote increased its stake in Sephaku Cement (Pty) Limited, which is based in South Africa, from 19.76 per cent to 64 per cent, with an investment of R779 million. The huge investment into Sephaku Cement by Dangote is the largest ever foreign direct investment (FDI) by an African company into South Africa.
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