17th May, 2011
Hope of eventual fall in the price of cement which has been on the
rise for over three months rises yesterday with directive by President Goodluck Jonathan to manufacturers of the product to bring the cost down within 30 days.
The President on Monday held a meeting with leading cement
manufacturers in the country, notably the Dangote Group, Lafarge/WAPCO and the BUA Group with a view to addressing the soaring price of the product.
Ima Niboro, spokesperson to the President told journalists that
Jonathan directed the manufacturers at the meeting to bring down the
prices of the product within 30 days period or face the wrath of the
Niboro said the meeting was summoned in response to complaints from Nigerians about the continuous rise in price of the essential building commodity.
The price of a bag of cement has in the past few months steadily rise
from about N1, 200 to over N2,500.00 in some parts of the country.
Cement manufacturers have before now blamed the soaring cost of the
commodity on the increased cost of transportation and production cost
brought about by the rising price of diesel.
Niboro however who announced that the manufacturers had agreed to do
all that was necessary to bring down the price of cement in the next
30 days in compliance with the directive of the President.
At a post-meeting briefing the President of the Cement Manufacturers Association of Nigeria, CMAN, Chief Joseph Makoju; Chairman of Dangote Group, Alhaji Dangote; Chairman of BUA Group, Alhaji Abdulsamad Rabiu and Country Manager of Lafarge Cement, Jean-Christophe Barbant also assured Nigerians that the prices would come down before the deadline.
Makoju told journalists that government and the manufacturers had agreed to work together to address problems which are at the root of the high prices.
â€œIn addressing the causes, some of the issues are on our side as the
manufacturers, some of the issues are on government side and I am very confident that over the next weeks, you will see the impact on the issue of supply and prices of cement,â€ Makoju said.
Alhaji Aliko Dangote, Chairman, Dangote Group and biggest investor in cement manufacturing plant however told journalists that the major problems the industry was facing were in the areas of supply of Low Pour Fuel Oil (LPFO) consumed by the industry and the loss of 6,000 trucks by his group recently, adding that the recent post election
crisis in the North which caused a shut down of production for weeks
was partly responsible for the hike in price.
He added that marketers were also capitalising on the increase in the
pump price of diesel as they transfer additional cost to the final consumers.
â€œThe other issue is that of transportation. You know once there is an increase of N1 in diesels, transporters will take that opportunity and increase their charges. When you look at when we started producing cement at Obajana, cement for the first time became cheaper, it is still cheaper than the price of Lagos while this was not the case before now.
He added that as part of efforts to mitigate the increasing prices,
his companies will now sell cement directly to retailers buying as
little as one truck.
â€œSo you can see that we are doing quite a lot and I can assure you that in the next few weeks these prices will definitely come down,â€ he said.
Dangote also disclosed that his organisation has ordered for 5, 000
additional trucks to tackle the problem of haulage of cement to all
parts of the country.
â€œWe are doing all that to try and bring down the cost of
transportation but we will do it in such a way that it will not affect
other transporters because we also need them in the business to
â€œCement will definitely be exported, worst case scenario by first
quota of next year, Nigeria should be earning a lot of foreign
exchange and I can guarantee you that cement would be one of the major foreign exchange earners in the next few months to come,â€ he stated.
In his contribution, the chairman of BUA Group noted that some of the
challenges responsible for increase in cement prices were being
addressed. He listed the problems to include the closure of Kaduna
Refinery and shut down of cement companies based in the North as a
result of the post election crisis.
â€œThere were challenges and some of them have been taken care of,
namely the issue of LPFO. Kaduna refinery was out of production for
some time but is now back on stream, and most of the companies located in the north like Ashaka cement, Sokoto cement, Benue cement rely entirely on LPFO. So, when Kaduna refinery had an issue a lot of companies were not able to produce and that have already been taken care of,â€ he stressed.
The Country Manager of Lafarge Group, added that it was also resolved at the meeting that there is need for more investment in the cement sector to make the product more available and cheaper.