By Deborah Hassan
365Daily – In a bid to defend itself against an allegation that Dangote Cement price in Nigeria is exploitative when compared to what is obtained in Ghana and Zambia, the management of the company has explained that a bag of cement from its factories and plants in Obajana and Gboko is N2,450, and N2,510 at Ibese, respectively.
The Group Executive Director, Strategy, Portfolio Development and Capital Projects, Dangote Cement Plc, Mr Devakumar Edwin, made the disclosure to newsmen in Lokoja on Tuesday, April 13, 2021.
He said that these were the prices of cement which included the Value Added Tax (VAT) as at April 12.
Addressing the allegation that the company sells cement in Nigeria at higher prices than it sells in Ghana and in Zambia, he explained, ”While a bag of Cement 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,” Edwin explained.
Describing the allegation that the company was selling its cement at higher prices in Nigeria relative to other African countries at the expense of Nigerians as “intentional misinformation”, he pointed out that the company only has direct control over its ex-factory prices and could, therefore, not fix the market rate of the product.
Edwin said that the company had only adjusted its transport rates to account for higher costs of diesel, spare parts, tyres, and trucks’ replacement.
”This allegation is false, misleading, and unfounded,” he said, while attributing the high cost of cement in Nigeria to the global rise in demand for cement as a result of the COVID-19 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 demands, we had to suspend exports from our recently inaugurated export terminals, thereby foregoing dollar earnings,” he said.
He said that the company had also reactivated its 4.5million tonne capacity Gboko Plant which was closed down four years at a higher cost to meet the rising demand.
”This is all in a bid to guarantee that we meet demands 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 per cent of our costs are linked to the USD , so the costs of critical components such as gas, gypsum, bags, and spare parts; have increased significantly due to the 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,” he said.