Legit.ng journalist Victor Enengedi has over a decade’s experience covering Energy, MSMEs, Technology and the stock market.
Cement manufacturers have attributed the abrupt rise in commodity prices across the nation to a significant surge in their operational expenses.
Nonetheless, they have reached an agreement to reduce the price range of the product from between N9,000 to N15,000 per 50kg to a new range of between N7,000 and N8,000, varying by location, on a nationwide scale.
Source: UGC
This resolution followed a meeting in Abuja on Monday, February 19, chaired by the Minister of Works, David Umahi.
In attendance were representatives from Dangote Cement Plc, BUA Cement Plc, Lafarge Africa Plc, and Doris Uzoka-Anite, the Minister of Industry, Trade, and Investment.
Manufacturers highlight reasons for hike in cement prices
Following an extensive three-hour discussion, Umahi conveyed the outcomes of the meeting, wherein cement manufacturers elucidated the rationale behind maintaining the price at no lower than N7,000 for the time being and elucidated the factors contributing to the recent substantial price hike.
The manufacturers underscored challenges such as exorbitant gas costs, import duties, poor road infrastructure, and the persistent high foreign exchange rate against the naira, which hinder an immediate reduction in the commodity’s price.
He said:
“First, our cost component of energy went from 39 per cent to 60 per cent because of gas
“The price of gas last year was 415, then to N715, today we are paying more than N1,500. All these issues were discussed and we gave our commitment.
“When our 6 million tonnes of cement is supplied to the market in the few weeks, definitely we will see a sharp drop in prices when that volume hits the market”.
Rabiu mentioned that the significant gap between demand and supply has significantly contributed to the price surge, particularly considering the current season.
He elaborated that certain manufacturing plants are encountering issues that hinder their production capacity, either deliberately or inadvertently, resulting in decreased overall production.
He added:
“And being the highest period of cement demand in the country, the tendency that demand will outstrip supply will push the price up.”
Arvind Pathak, the Group Managing Director/Chief Executive Officer of Dangote Cement Plc, emphasized that despite the local sourcing of the commodity’s core materials, factors such as spare parts, among others, are subject to import duties and foreign exchange fluctuations.
These economic factors pose challenges for the manufacturers, making it challenging to ignore the current economic conditions.
Source: Legit.ng
