Manufacturers Outline Conditions to Reduce Escalating Cement Prices

Cement manufacturers have agreed to charge between N7,000 and N8,000 for a 50 kg bag of cement at retail, depending on the area nationwide.

The manufacturers did, however, clarify that any price reduction from the going rate would be contingent upon the implementation of certain government initiatives aimed at addressing the industry’s pressing problems.

Following a meeting with major cement makers on Monday in Abuja, the Minister of Works, Dave Umahi, declared that Nigerians will notice the effects in 30 days.

The dialogue took place against the backdrop of the commodity’s price skyrocketing to almost N13,000 in a number of retail locations in the Federal Capital Territory and Enugu, due to effects of national inflation.

However, Umahi bemoaned the present rate at the meeting called by President Bola Tinubu, claiming that it was aberrant and harmful to the economic development that the current administration was pursuing.

Reading the communique after a three-hour discussion, the minister said certain issues including smuggling, bad roads, high energy costs, and the forex crisis caused the high prices but stressed that manufacturers have expressed their readiness to be willing to bring down the prices in the future.

He said, “The meeting discussed extensively the current prices of cement vis a vis the challenges from the manufacturers. They talked about their challenges ranging from the high cost of gas, high import duties from their spare parts, bad road network and of course the high FX rate.

“They also talked about the issue of cement across our borders and how it is creating scarcity and high increase. We agreed that the trade ministry will seek some remedies from the president on the high cost of gas and the issue of import duties and fixing of the roads within the distribution corridors.

“The cement manufacturer has noted and the government that the present high cost of cement in the market is very much abnormal in some locations nationwide. Ideally, they noted that cement price, and retail price to a consumer should not cost more than between N7,000 to N8,000 per 50 kg bag of cement.

“Therefore, the government and the cement manufacturers, which are Dangote Plc, BUA Plc and Lafarge Plc have agreed to have their cement price nationwide between N7,000 to N8,000 naira per 50 kg pack of cement, depending on the locations, which means that this price depends on the locations. Going forward, the government advised manufacturers to set up a price monitoring mechanism to ensure compliance with the prices that are set today and manufacturers have willingly accepted to do that and sanction any of their distributors or retailers found wanting.”

On his part, the Group Executive Director of BUA, Kabiru Rabiu, disclosed plans by the company to supply 6m tonnes of cement into the market to mitigate the surging prices.

He also said cement continues to be smuggled by mischievous retailers because the price is the cheapest in the region, which makes it vulnerable to smuggling adding that this activity does not through official channels and does not benefit the government.

“BUA is committed to bringing in an additional six million tonnes of cement in the next few weeks and that would seriously dampen the pressure of supply. we would remain committed to these engagements and we would reassemble in 30 days.”

“The high cost of cement in Neighboring countries has made smuggling lucrative. The cost of cement in Chad and Cameron is about N15,000 per bag and we noticed that distributors through the North Eastern part smuggle products to neighbouring countries. They do that not through official channels and the government is not benefiting from their export. Unless that is sorted, we’ll continue to have pressure from those markets.

“There is a big disparity between demand and supply in Nigeria. I think some plants have issues which have reduced production. We are at the peak of cement demand but supply seems less so there is going to be a crisis and that is why we are working hard to bring more products to the market to reduce the pressure of demand and supply in the market,” he concluded. [CONTINUE READING HERE]