By the company’s actions, the new price regime announced by the Group Managing Director of Dangote Cement, Devakumar Edwin, would see the company sell its 32.5 cement grade at N1,000 per 50 kilogram (kg) bag, while the higher 42.5 grade would sell for N1,150 per bag.
The new prices exclusive of the Value Added Tax (VAT), represents about 40 per cent discount on the prevailing market price of the product which is currently sold for N1,700 irrespective of the grade, across the country.
Edwin said the move is in line with the company’s commitment to the nation’s dire need for the development of infrastructure and to boost the federal and state government’s ongoing effort to reduce the near 20 million housing deficit in Africa’s largest economy.
Indeed, the move is also coming on the heels of cement standardisation reforms embarked upon by the Standards Organisation of Nigeria (SON), which among others include labelling criteria and specifying the shelf life of the commodity.
The new cement standard NIS 444-1:2014, had prescribed new guidelines for advertisements, storage and labeling of cement products in Nigeria as well as a proper regulatory framework for all stakeholders.
“We recognize the need for an increase rapid response to the huge infrastructure and housing deficit in the country, and one of the ways of addressing the issue is bringing the price of building materials down to much more affordable levels especially cement, which within our own control as part of our own contribution to the transformation agenda of the Goodluck Jonathan administration and the attainment of key milestones in the Millennium Development Goals (MDGs),” Edwin said.
The National President of the Block Moulders Association of Nigeria, Alhaji Rasidi Adebowale, said he received the news with much happiness considering what the price reduction holds for his members in Nigeria.
He expressed optimism that the new price review will translate to reduction in the price of blocks
In his own comment, Alhaji Okunola Abegunde the Lagos State Chairman of the Block Moulders, said had all along been looking forward to a time like this when the price of cement would jump down from the roof top it has always been.
President of the Nigerian Institute of Architect, Bruno Niyi, hailed the decision by Dangote Cement Plc on the price reduction and urged the management of the company to sustain the new price regime and ensure it is not hijacked by the profiteers.
Since the commencement of the implementation of the backward integration policy for cement in the country over 12 years ago, the local production capacity of the product rose from less than three million metric tonnes yearly to about 38 million metric tonnes yearly.
During the over 12-year period of the backward integration policy, nearly $20 billion has been directly and indirectly injected into the Nigerian cement industry with Dangote Cement Plc accounting for 60 per cent of that spend
The chief executive in a statement also noted that Dangote Cement Plc will continue to ensure alignment of its corporate social responsibility with its strategic business initiatives and will continue to evaluate its pricing regime in Nigeria’s best interest.
Meanwhile, the timing of the initiative has confounded industry watchers, who say that from experience, the cement market is on the verge of entering the accelerated demand phase as the raining season is tapering and the dry season which provides the opportunity for increased construction and building activities is setting in.
Recently, in further compliance with the ongoing Standards Organisation of Nigeria (SON) directive and regulation on the various grades of cement and their prescribed uses, Dangote cement launched its brand of the premium 32.5 cement grade, which has been restricted to plastering use only.
The 32.5 grade of cement which has the lowest strength among the cement grades was priced lower than the others, selling for N150 lower than the price of the higher strength 42.5, a price cut that has now been improved with the current initiative.
Dangote said in compliance with the SON standard for cement quality and packaging, the lower 32.5 type on the Dangote shelf will be clearly labelled as such, in order to prevent the problem of misapplication and misuse of the product, which has become rampant in the nation’s building and construction industry.
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