The company recently revealed this via a statement after reports that the company sells cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia.
According to Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, Devakumar Edwin, the reports are false, and a bag of cement actually sells for an equivalent of $5.1, including VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.
He then added that even if the company has direct control over its ex-factory prices, it cannot control the ultimate price of cement when it gets to the market.
His words, “Demand for cement has risen globally as a fallout of the COVID crisis. Nigeria is no exception as a combination of monetary policy changes and low returns from the capital market has resulted in a significant increase in construction activity.”
“To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings.”
“We also had to reactivate our 4.5m ton capacity Gboko Plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of Cement within control in the country.”
“Over the past 15 months, our production costs have gone up significantly. About 50% of our costs are linked to USD so the cost of critical components like: gas, gypsum, bags, and spare parts; has increased significantly due to devaluation of the Naira and VAT increase.”
“Despite this, Dangote Cement has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly.”
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