Due to allegations of extortion and price hike levelled against Dangote group operational arm in Nigeria as against other African countries, Devakumar Edwin, the company’s group executive director for strategy, portfolio development and capital projects, stated during a press briefing on Monday that although the company has direct control over its ex-factory prices, it cannot control the ultimate price of cement in various markets.
But Edwin described said the allegations are products of misinformation in the cement industry.
He said while a bag of cement sells for an equivalent of $5.1, including value added tax (VAT) in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of taxes.
Edwin explained that cement from the company’s factories and plants nationwide sells for N2,450 in Obajana and Gboko, and N2,510 in Ibese inclusive of VAT.
“DCP has no control over neither the prices charged by other cement manufacturers nor the prices charged by retailers in the markets,” he said. He also stated that monetary policy changes and returns from the capital market has allowed a surge in the construction.
“To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings. We also had to reactivate our 4.5m ton capacity Gboko plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of cement within control in the country.”
He said cost of production has increased by 15 percent over the past 15 months due to dollar-naira valuation, but added that the company only adjusted prices to reflect changes in transport rates. The top Dangote Group executive also stated that prices have remained the same since December 2019.
“We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement. Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius. We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far,” he said.