Encomium
DISTRIBUTORS of Dangote Cement are yet to sell at the recommended price of N1,000 per bag, over one week after Africa’s richest man, Aliko Dangote crashed the price.
According to some of the marketers ENCOMIUM Weekly interacted with across the nation, the new price regime might not even commence this year since many of them bought the product at N1,600 (they sell between N1,700 and N1,800).
Jonah Ike, a cement distributor in Ojodu/Berger, Lagos, said that the price of Dangote Cement in his store remains the same: “I got my stock of Dangote Cement long before the announcement of the price reduction. The slash will only be implemented when I get a new stock from the company. For now, the price of 50kg of cement is N1,700 and it remains until I replenish my stock.”
Another distributor, Mr. Solomon Adebanjo who operates along Ogba Ijaye in Ifako-Ijaye Council Area, Lagos, also hailed the price slash for Dangote Cement. He, however, confirmed that the price of 50kg of cement is about N1,750 in his store, pending when he receive a new stock from the Dangote Cement company. He predicted that cement manufacturing companies would also later sell at N1,000 to remain in business. “Customers will certainly prefer to buy affordable products than go for expensive ones.”
Distributors of Dangote Cement are also selling at the old price in Apapa, Festac Town, Mushin, Ikeja, Ikorodu and indeed all parts of Lagos.
From Onitsha, Anambra state, Owerri, Imo State, Port Harcourt, Rivers State to Aba, Abia, Dangote Cement is still selling at the old price. And this might continue for a while. A cement distributor on Azikiwe Road, Aba, Brown Uzoaga explained: “Don’t expect the new price directive for Dangote Cement to commence shortly. It’s not possible. Our union would encourage Dangote management to allow us finish our old stock. This will certainly take time unless they recall the unsold ones. By and large, it’s a positive and encouraging development.”
Meanwhile, Head Corporate Communications, Dangote Group, Mr. Tony Chiejina said the cement price slash was expedient as the group had increased its production capacity.
Chiejina, in a release, claimed that Dangote Group has increased its production capacity from two million metric tonnes to 13 million metric tonnes in the last four years.
“Our increased capacity has opened up opportunities for us to accommodate the needs of more Nigerians to build more affordable homes.
“Our company is not concerned with profit-making alone. We are also interested in creating value for our customers at a reduced price.”
Tony Chiejina noted that the price slash which takes effect immediately was also the company’s way of supporting the Federal Government in its effort to cater for the housing needs of Nigerians.
Relatedly, Dangote Group has been widely commended by stakeholders and well meaning Nigerians for selling cement at N1,000. First to welcome the move was BUA Group, cement manufacturers who promised to also adjust their price in line with the current price.
Abdulsamad Rabiu, chairman, BUA Group, has thrown his weight and support behind Dangote Cement reduction on the cost of unit bag of cement to N1,000, a 40 per cent price cut which was announced last week.
Rabiu said he has always been concerned about the high cost of cement in the country and has always advocated a reduction of the cost so that more Nigerians can have access to the product and realise their dreams of owning their own houses.
“It is against this background that I commend Alhaji Aliko Dangote for this patriotic initiative which is long overdue.”
He further revealed that he held extensive discussion with Dangote on this issue in a telephone conversation last weekend and encouraged him on the initiative.
“What Aliko has done today is significant. I am very pleased about it because it would make the cost of the product more easily affordable to Nigerians. With the price being low, it will result in more consumers buying the product which will drive up volume and increase market share for all stakeholders. I hereby urge all cement producers to emulate Dangote and bring down the cost of cement. There is absolutely no reason for a bag of cement to cost so much. While it is true that we have infrastructural challenges, it is not so much as to make the cost of cement so expensive.”
“On our part, I have already directed all our plants to follow suit and implement the new price regime. We still believe that more can be done to bring down the price even further for the benefit of Nigerians.”
There is really no reason for cement to cost more than N1,000 per bag, bearing in mind the massive success of the backward integration policy which implementation commenced 12 years ago, in which tens of billions of dollars have been directly and indirectly injected into the Nigerian cement industry with Dangote Cement accounting for more of this.
This has seen cement national productivity rising from a mere 2.2 million tons to over 30 million tons.
A building contractor, Pastor Nathaniel Otorolehi also said the new price regime would reduce the problem of housing, especially if the prices of building materials are equally reduced.
“The price of cement and other building accessories have been far from the reach of the masses. Nigerians can hardly afford decent homes because of the high cost of building materials. Dangote’s kind gesture is good for the nation,” he said.
Mr. Adeoti Oyelakin, Partner, Oyelakin and Sons, a law and estate firm, said that Nigerians often berated exorbitant rents in the urban areas without considering the cost of building materials.
Oyelakin noted that the price slash of cement, the most essential factor in the building of houses, would in turn reduce the cost of renting houses.
He also said the slash would encourage many Nigerians, especially those who had abandoned their housing projects to continue.
The Group Managing Director and Chief Executive Officer, Dangote Cement Plc, Mr Devakumar Edwin, had on November 27, 2014 announced a 40 per cent reduction in the price of the company’s cement.
Though, cement distributors are still selling at the old prices of N1,700 and even above, many are optimistic that the N1,000 price ceiling is in the best interest of the masses.
‘We do not set price for manufacturers’
– MRS. CYNTHIA IPAGUO, Special Assistant to the Director-General, SON
“Our main mandate is maintaining standard. We are happy that Dangote has complied with the required standard NIS 441 of 2014. This is what we require all manufacturers to do. The purpose is to educate the users of cement to recognize the various types of cement in the market place, the best quality that can be attained within six months. We are happy that Dangote has complied with the required standard.
Are you assuring Nigerians that they are getting good quality despite the reduced price?
Standard Organisation of Nigeria does not set price for manufacturers. What we do is to ensure that they meet with quality specification of our standard. There are processes to ensure that products from manufacturers are monitored from time to time. Samples are picked from time to time to ensure that the quality standard is kept and maintained.
‘My colleagues will go back to bricklaying’
– AKINMOLA OLANIYAN
What is your opinion in the reduction in the price of Dangote Cement?
It is what we have been agitating for. Because of the high price, a lot of buildings have been abandoned, a lot of our people have been jobless. Some have turned to okada riders. This will bring life into the industry, our people will get jobs. It is a great news to us. A lot of clients will continue building, we have been agitating for this a long time ago.
– Akinmola Olaniyan, State General Secretary, Lagos State Bricklayers Association
