Cement Price: Dangote announced N1,000 Per Bag for a Cement

In a 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 construction product.

In a step that will make cement cheaper than it has ever been since 2005, the group managing director of Dangote Cement, Mr. Devakumar Edwin, said the company had pegged the Dangote 32.5 cement grade at N1,000 per 50 kg 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), represent about 40 per cent discount on the prevailing market price of the product, which currently sells for N1, 700 across the country irrespective of the grade.

Edwin said the move was 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 government’s ongoing effort to reduce the near 20 million housing deficit in Nigeria.

“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, as 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 had risen from less than 2 million metric tonnes per annum to about 38 million metric tonnes per annum today.

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 align 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 rainy season is tapering off 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 is restricted to plastering use.

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.

With this move, Dangote now produces 42.5 for column casting, block making, decking and other general purpose construction work that require high strength, and the 32.5 grade for rendering or plastering.

The company produces on demand the 52.5 grade for specialised construction of high strength structures such as bridges, flyovers and sky scrapers 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 42.5, a price cut that is part of the earlier announced price regime.

Dangote said in compliance with the SON standard for cement quality and packaging, the 32.5 type shelf life would be clearly labelled in order to minimise the incidence of building collapse in the nation’s building and construction industry arising from the misapplication of the different grades of cement.

The national president of the Block Moulders Association of Nigeria, Alhaji Rasidi Adebowale, said he received the news with much happiness especially considering what the price reduction held 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 come down so that the low income group could become house owners.

The chairman, Coalition Against Building Collapse, Kola Ojewuyi, noted that the downward review of prices had confounded the critics of Dangote Cement who had earlier condemned the campaign embarked upon by company for the adoption of the 42.5 cement grade as a ploy to increase price of the commodity.

The president, Nigerian Institute of Architects, Arc. Bruno Niyi, hailed the current move by Dangote and urged the management of the company to sustain the new price regime and ensure it is not hijacked by profiteers.