The clarification was made in light of recent allegations that the firm sells cement at considerably higher rates in Nigeria than in other nations, most notably Ghana and Zambia.
Devakumar Edwin, Dangote’s Group Executive Director, Strategy, Portfolio Growth, and Capital Projects, disclosed that, while a bag of cement costs $5.1 in Nigeria, including VAT, it costs $7.2 in Ghana and $5.95 in Zambia ex-factory, including all taxes. He said that, while the firm has direct control over its ex-factory costs, it does not have control over the final price of cement before it reaches the market. He advised that it is critical to differentiate Dangote’s ex-factory rates from consumer prices for cement sold by retailers.
As a result, he frowned on deliberate disinformation or demarketing, allegedly funded by some persons, that Dangote sells cement at higher prices in Nigeria compared to other African countries at the detriment of Nigerians. He characterised the statement as baseless, deceptive, and unfounded, while handing out copies of invoices from Nigeria and other African countries (Cameroon, Ghana, Sierra Leone, and Zambia) to the media present at the press conference and urging them to pursue independent inquiries into the price of cement along the West African coast.
Edwin went on to say that while Dangote cement controls 60% of the industry, the remaining 40% is held by other firms. DCP has little influence on the prices paid by other cement producers or the prices charged by industry retailers.
He further explained that “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.”
He said: “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, DCP has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly. We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement. Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius. We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far” he said.