Dangote Denies Exploiting Nigerians, Says Cement Cheaper In Nigeria Than Ghana, Zambia

Few months after Dangote Cement accepted BUA Groups challenge on crashing the price of cement in Nigeria, the company has come to deny allegations that it sells cement at an outrageous price compared to its Ghanaian and Zambian markets.

The Company’s Chief Executive Officer, Edwin Devakumar, described the allegations on Arise TV Morning Show as ‘False and Incorrect’.

Dangote said it has been fair and just in pricing cement in the country given its cost implications.

Devankumar said the ex-factory prices of cement including Value Added Tax across Nigeria as at Monday was N2, 450 in Obajana and Gboko, and N2, 510 in Ibeshe.

He clarified that while a bag of cement was sold for about $5.1, plus VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, he said in a separate interview in Lagos.

Devakumar said in 2015, the company was accused of trying to stifle other players in the industry after it slashed cement prices by 40 per cent.

The company said when compared with the N485 per dollar based on naira rates at the parallel market, the price comes to $110 a tonne.

Despite this, the CEO said the price of cement in Nigeria today is relatively low compared to other markets.

The company which controls 60 per cent share of the cement market said 50 per cent of its cost was linked to dollars.

Devankumar said, “For any commodity, prices may be different for different players. For any player, they have the liberty to fix any price. In December 2015, we dropped the price of cement by 40 per cent.

“We didn’t go around talking about dropping the price of cement. We went ahead and dropped it and at the end of the day, we were accused of dropping the price so drastically and trying to eliminate competition.

“So, ultimately, I had to defend it in the media and we began to roll back our price gradually.

“This was the reaction in the market then. Coming to our prices today, we are selling our cement at N2, 450 at the factory from Obajana, and Gboko is the same.

“The price at Ibeshe is about N2, 510, which is N60 more because the cost of production at Ibeshe is high; the limestone is high in moisture and the drying up process takes additional power and energy.”

He explained that the ex-factory prices were held amidst rise in the prices of key ingredients needed for cement production.

He explained that the price of sand used for construction has moved to N4,500 from N3,00, while gravel has also surged.

He said, “The construction sector does not use only cement; the price of sand has moved from N3, 000 to N4, 500 which is a key ingredient in construction.

“The price of gravel has also gone up by 120 per cent from N1, 900 to 4,200 in the last 15 months and we have kept our prices firm. The price of tiles has gone up by 100 per cent; and 50 per cent.

“So, the prices of all these ingredients have gone up substantially whereas the price of cement, we are selling at the same price that we are selling in 2019; and we have not increased the price by one kobo.

“In naira terms, we have not changed the price in 15 months and in dollar terms, the prices have gone down very substantially.”

The company lamented that it only has direct control over its factory prices but has little control over the retail prices.