Dangote Industries has denied reports that it has increased cement price to over N4,000, insisting that the ex-factory price of cement at their factories in Obajana, Kogi State, and Gboko, Benue State, is N2,450.
According to its Group Executive Director, Strategy, Capital Projects and Portfolio Development, Edwin Devakumar, who also denied reports that Dangote cement is sold at a lower rate in Zambia and Ghana, the retail price of cement in Nigeria is controlled by the hike in transportation cost. Ex-factory price means the selling price of goods from seller’s factory as the responsibility of getting goods from the seller’s factory is with the buyer.
“I have seen the news that we sell cement at a lower rate in countries like Zambia and Ghana but that is not true at all. The cement price in Zambia is 131 Kwacha per bag and 22 Kwacha to a dollar brings it to $5.95 per bag and $119 per ton. So, the information that we sell cheaper in Zambia is false and incorrect. You can’t compare the price of corn between Zambia and Nigeria because prices differ based on different reasons. For example, in some countries where we operate, we get hydroelectric power, so this affects the price of products. We used to export cement from Nigeria to Ghana but we stopped it a few years back. Again, the price of cement in Ghana is 41.9cedis per bag and at the current exchange rate, it comes to $7.25 a bag.
“This is a free market and the price of the same product is different from shop to shop. Any player has the right to sell cement at any price. In December 2015, we dropped the price of cement by 40 per cent and we were accused of trying to wipe out our competition and trying to dominate the market. Because we were accused of trying to monopolise the industry, we had to gradually roll back our prices,” Devakumar said.
He went further to explain that shortage of trucks to convey cement from their factory to different states caused a spike in transportation which inadvertently affected the retail price of cement.
“We are currently selling our cement at N2, 450 ex-factory from Obajana in Kogi State, Gboko in Benue State and from Ibese, Ogun State, we sell N2, 510 which is N60 more and that is because the cost of production in Ibese is higher…”