Dangote Cement Plc, Sub-Saharan Africa’s leading cement manufacturer, says it is working ceaselessly to close the demand-supply gap which has led to a surge in the price of the product in Nigeria.
The company says it is doing this by increasing its production capacity to ensure availability of cement in every nook and cranny of Nigeria and beyond.
Cement, a key component in building and construction, has seen a sharp rise in price in the last few months, from about N2,500 per 50kg bag to as high as N4,000 currently.
This price increase, according to Rabiu Umar, Dangote Cement’s newly appointed group chief sales and marketing director, is a result of a sharp rise in demand for cement as a combination of monetary policy changes and low returns from the capital market led to a significant increase in construction activity.
And it is a global phenomenon and not peculiar to Nigeria, Umar told journalists in Lagos on Monday.
“We got into COVID last year and immediately after COVID there was a surge in demand. This is not particular to Nigeria alone, a couple of countries across the world are also experiencing the same; Mexico, South East Asia, among others,” Umar said.
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He explained that in every business, prices are driven by the forces of demand and supply. He said Dangote has not increased the price of its cement up until this point, but cement is selling at higher prices due to a demand-supply gap.
To help close this gap, which Umar said it is difficult to put a figure to at this time, Dangote Cement is aggressively building up more capacity as it recently invested in a new line that has been completed in Obajana Plant. The line is waiting for the power plant for it to commence operation, Umar said.
He said the company also has a new plant in Okpella, Edo State, that is also going to start operation very soon.
“For the last couple of years one of our plants in Gboko, Benue State, has not worked; we have re-started the plant all in a bid to make sure that there is enough production. We have also increased the capacity of our Obajana Plant and very soon, I am sure the market will be flooded with enough products. You also need to note that other operators are also increasing their capacity,” he said.
Speaking further on price, Umar said though Dangote Cement has direct control over its ex-factory prices, it cannot control the ultimate price of cement when it gets to the market. He advised that it was important to distinguish Dangote’s ex-factory prices from prices at which retailers sell cement in the market.
