In a move that will raise the stakes in the rapidly evolving Nigerian cement market, leading cement manufacturer, Dangote Cement Plc has announced huge cuts in the price of the essential product.
A step that will make cement cheaper than it has ever been since 2005, the new price regime announced by the Group Managing Director of Dangote Cement, Mr. Devakumar Edwin, said the Company has pegged the Dangote 32.5 cement grade at N1,000 per 50 kg bag, while the higher 42.5 grade is to sell for N1,150 per bag.
The new prices exclusive of the Value Added Tax (VAT), represents about 40 per cent discount on the prevailing market price of the product which is currently sold for N1,700 irrespective of the grade, across the country.
Edwin said the move is in line with the company’s commitment to the nation’s dire need for the development of infrastructure and to boost the federal and state government’s ongoing effort to reduce the near 20 million housing deficit in Africa’s largest economy.
“We recognize the need for an increase rapid response to the huge infrastructure and housing deficit in the country, and one of the ways of addressing the issue is bringing the price of building materials down to much more affordable levels especially cement which within our own control as part of our own contribution to the transformation agenda of the Goodluck Jonathan administration and the attainment of key milestones in the Millennium Development Goals (MDGs),” he said.
Since the commencement of the implementation of the backward integration policy for cement in the country over 12 years ago, the local production capacity of the product rose from less than 3 million metric tonnes per annum to about 38 million metric tonnes per annum.
During the over 12-year period of the backward integration policy, nearly $20 billion has been directly and indirectly injected into the Nigerian cement industry with Dangote Cement Plc accounting for 60 per cent of that spend
The GMD/CEO also noted that Dangote Cement Plc will continue to ensure alignment of its corporate social responsibility with its strategic business initiatives and will continue to evaluate its pricing regime in Nigeria’s best interest.
Meanwhile, the timing of the initiative has confounded industry watchers, who say that from experience, the cement market is on the verge of entering the accelerated demand phase as the raining season is tapering and the dry season which provides the opportunity for increased construction and building activities is setting in.
Recently, in further compliance with the ongoing Standards Organisation of Nigeria (SON) directive and regulation on the various grades of cement and their prescribed uses, Dangote cement launched its brand of the premium 32.5 cement grade, which has been restricted to plastering use only.
The largest cement producer in Nigeria noted that the move was to develop a full bouquet of cement types to meet the varied needs of consumers for the different grades of cement.
Dangote with this move now produces 42.5 for column casting, block making, decking and other general purpose construction work that require high strength, while also producing the premium 32.5 grade for rendering or plastering, flooring and other activities that may not require intense cement strength.
The company produces on demand the 52.5 grade for specialized construction of high strength structures such as bridges, flyovers, sky scrappers among others.
The 32.5 grade of cement which has the lowest strength among the cement grades was priced lower than the others, selling for N150 lower than the price of the higher strength 42.5, a price cut that has now been improved with the current initiative.
Dangote said in compliance with the SON standard for cement quality and packaging, the lower 32.5 type on the Dangote shelf will be clearly labelled as such, in order to prevent the problem of misapplication and misuse of the product which has become rampant in the nation’s building and construction industry.
Alhaji Rasidi Adebowale, the National President of the Block Moulders Association of Nigeria said he received the news with much happiness especially what the price reduction holds for his members in Nigeria. He expressed the hope that the new price review will translate to reduction in the price of blocks
In his own comment, Alhaji Okunola Abegunde the Lagos State Chairman of the Block Moulders, said had all along been looking forward to a time like this when the price of cement would jump down from the roof top it has always been.