No MORE N7000 Per 50kg? See The New Prices Of Cement After Reps Take Action Against Dangote, BUA, Lafarge, Others
The House of Representatives Joint Committee investigating the surge in cement prices has directed major manufacturers, including Dangote Cement, BUA Cement, and Lafarge Africa, to provide a comprehensive breakdown of their production costs. Jonathan Gaza, Chairman of the Committee, emphasized the necessity of this information to understand the rationale behind recent price hikes. While cement prices in the North and several other states have recently decreased to approximately N8, 000 per bag, from earlier highs of N13, 000.to N15, 000, residents in some areas are still paying up to N10, 000 per bag..
The committee seeks detailed data to grasp the challenges manufacturers face and assess the justification for these price increases.
Gaza has requested detailed records. of production costs from 2020 to the present, including the daily consumption of materials such as coal, gas, gypsum, limestone, clay, and laterite, as well as average daily production figures. Additionally, the committee demands information on imported components used in cement production and their associated costs over the same period, Gaza stated, “We require a thorough documentation from these companies to gain a clear understanding of their daily production costs and to accurately assess the cost of producing a bag of cement..
In response, Arvind Pathak, Group Managing Director of Dangote Cement, explained that 95% of the company’s production costs are related to imports and foreign exchange. Pathak noted significant price increases in key materials, such as gas, diesel, gypsum, imported coal, spare parts, new trucks, tyres, and petrol, with price hikes ranging from 100% to 333%. Pathak revealed that Dangote Cement frequently uses dollars for contracts to secure gas and explosives. Due to limited foreign exchange provisions from the Central Bank of Nigeria, the company also relies on the parallel market for forex. Logistics challenges, including poor road conditions, have exacerbated delivery times and maintenance costs.
Pathak highlighted that the lack of adequate forex for trade obligations has led to annual losses of N150 billion and high-interest rates on loans. He noted, “Between May 2023 and June 2024, the naira devalued by over 220%, compounding issues such as insecurity and unreliable power supply. The cost of building materials, including reinforcement, granite, and aluminum windows, has surged by177% to 283%, while cement prices have increased by 166% during the same period.
Despite federal government interventions aimed at reducing cement prices, recent checks indicate that retailers in Lagos and Ogun States are still selling bags at prices ranging from N10, 500 to N14, 000.
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