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‘Why price of Dangote Cement was reduced’ – MD, D.V.G EDWIN

THE two sizes of Dangote Cement have been rebranded to meet up with SON standard.  The 32.5 bag comes in green and yellow.  It is used basically for plastering while the 42.5 grade comes in navy blue and sky blue bag.

ENCOMIUM Weekly spoke with the Group Managing Director of Dangote Cement, DVG Edwin, representative of Standard Organisation of Nigeria (SON) and a representative of Bricklayers Association.  We also sampled opinion of cement sellers about the slash in price and the misconception about it.

 

Why are you reducing the price of cement this time?

If we could reduce the price earlier, we would have done that but the consumers would still be buying at expensive price because the retailers will still sell at the best price they can get at the market.  The retailer knows that there is shortage, he knows if there is high demand, he cannot meet it. He will rather sell at a high price. But we have launched an additional nine million capacity within the last two months.  So, we have commissioned the plant.  We started in June.  For any factory to take full effect, it will take three months.  All our factories have settled down.  We have more products on offer now.  We can meet any demand and reduce the price, that is the primary reason we are reducing price.

How will you make profit?

There are many factors that goes into the cost of production –  the cost of energy, fuel, the cost of limestone.  We are trying to reduce the cost on some of these factors.  For example, we have gas in Obajana Plant, so we have a low cost of production in that aspect.  We are trying to reduce the cost of production so that we can have maximum profit.

How true is it that the slash in price will end in February, 2015 after the elections?  It was alleged that Dangote Cement will not pay tax till after the elections, that was why the price was slashed?

We are in business to make money and to meet the aspirations of our shareholders.  If anybody is going to compensate so that I can drop my price, no, it is not possible.  We cannot drop our price just because of the elections, it will not happen, nobody will do it.

Tax policy has been on ground for decades, anybody putting up a new company enjoys the same policy. It is a uniform policy for all companies. We are paying taxes in all our plants, so that is not true.  As long as approval is gotten from the government, you have to commence the payment of tax.

Monopolists normally bring down the prices of their goods, chase out competitors and then jack up the price again.  Are you assuring Nigerians that there will be sustainability in the new price?

All along, we were being criticized that our prices are high, that our prices should come down.  Now, someone has dropped the price to N1,000 and you call the person a monopolist.  Are you suggesting we should go back to our former price?  That is wrong.  Monopoly comes when you have a large manufacturing capacity.  For example, sometime back, there was no sugar manufacturing plant.  Those that existed had closed down.  We, in 2000 started our sugar refinery.  Later, some other people came in, should we be called monopolist for having invested in Nigeria.  We have the second largest refinery in the world, should we cross our hands and keep our money?  I don’t think that will be good enough.  When people saw that we took a step in the right direction, they came in to invest in that industry.  There is no case of monopoly in this.  Should we stop building industries? I don’t think it is right for Dangote to invest outside the country and forget his country.  Should he be called a monopolist because he wants to invest his money in Nigeria?   What will people then say if he decides to invest in other parts of the world, you should answer the question.  If we decide to invest in petroleum that has made people cry and cry every day, should he be called a monopolist because of that?  I would rather expect you to answer the questions.

How will you assure your customers that this product is as good as it was before the price was reduced?

In the whole of Africa, we are the only one that has a factory that is managed and controlled without human intervention.  It is done by a very thorough process, right from the mines, where we get our raw materials, it is monitored online, online analysis is going on as it goes through each process.  We ensure that our quality assurance is monitored.  We will not compromise our quality.  We have to stick to the standard and requirement set by SON.

When will the new price be implemented?

The price was announced on the first of this month, so it has taken full effect.

–               Stories and interviews by UCHE OLEHI and SHADE WESLEY-METIBOGUN

Encomium

Written by Encomium

A media, tech and events company.

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