Three weeks ago, Nigeria’s 170 million populations woke up to happy news that cement is now N1, 000 per bag. For almost ten years (2005 – 2014) the price of the commodity had been hovering at N2, 500; N2, 200; N1, 750 per 50kg bag, depending on the brands and location. The sudden new price regime therefore came as unbelievable to Nigerians but news screamed the headlines while radio/TV newspapers review confirmed it. Dangote Cement Plc who led the industry to slash the price of the company’s cement by 40 per cent, said “We have pegged the Dangote 32.5 cement grade at N1, 000 per 50 kg bag, while the higher 42.5 grade is to sell for N1, 150 per bag.” - See more at:

The Group Managing Director of Dangote Cement, Mr. Devakumar Edwin, who announced the new price regime, said “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).”
According to him, 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 3 million metric tonnes per annum to more than 38 million metric tonnes per annum.

Stakeholders’ reaction

Abdulsamad Rabiu, chairman, BUA Group, whose company is behind Cement Company of Northern Nigeria, Sokoto, Edo Cement and OBU cement at Okpella, Edo State, with combined 5.3 million metric tonnes per annum capacity, hailed Dangote cement for the price reduction.
Rabiu said he has always been concerned about the high cost of cement in the country and has always advocated a reduction of the cost so that more Nigerians can have access to the product and realise their dreams of owning their own houses.
“What Aliko Dangote has done is significant. I am very pleased about it because it would make the cost of the product more easily affordable to Nigerians. With the price being low, it will result in more consumers buying the product which will drive up volume and increase market share for all stakeholders.
“I hereby urge all cement producers to emulate Dangote and bring down the cost of cement. There is absolutely no reason for a bag of cement to cost so much. On our part, I have already directed all our plants to follow suit and implement the new price regime. We still believe that more can be done to bring down the price even further for the benefit of Nigerians,” he said. Yusuf Binji, Executive Director Project and Technical, OBU Cement Plant, also expressed hope that the new price regime has potential to increase consumers demand for the construction of residential and commercial buildings. He noted that local manufacturers have the capacity to satisfy all the markets in Nigeria. “When you look at the potentials that exist, for example, let us use one of this indices – the per capita consumption of cement in Nigeria as at 2013 was 120kg per person. That is just about 2 ½ bags of cement per person in Nigeria, if you look at some of our neighbours in West Africa, for example, Ghana, it is 250kg or five bags of cement per person . So, if we are to move from the same consumption from 120kg to 250kg, cement requirements in Nigeria will go up to 50 million tonnes per annum.

“So there are still potentials to build more cement factories in the country. When OBU cement start production, we are going to fix the prices and it is going to be very competitive and attractive to all our customers because we are starting from ground zero and then we are going to hit three million tons within a very short time. Nigerians are going to smile when our brand of cement hits market. On a daily basis, about 250 to 300 trailers of cement will leave the factory. We will sell to the North, East, West and the South. This is our priority but you will not see the cement going to the extreme corners of the North- West or North- East because of the distance which is over 1000 kilometers.
“As you can see the OBU cement plant is located in a nice geographical area and the location is very good like in the Mid-West and it is very close to the cement market in the North and also in the South to West and to the East with excellent road networks about 200 metres to the major highway linking Okene to Benin. So, this places it at a strategic location to adequately distribute our brand of cement products all over Nigeria,” he stated

Still on the price reduction, Mr. Muda Yussuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI) said the slash would create healthy market competition.“This will force other manufacturers of cement in the country to review their cost price as well. “It is for the benefit of the end users; the lower the price of a commodity, the better for the consumers,” he stated. According to Alhaji Rasidi Adebowale, the National President of the Block Moulders Association of Nigeria, the new price regime 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 “we have been looking forward to a time like this when the price of cement would jump down from the roof top it has always been.”
On the other hand, cement distributors said it would take some time for the new price to reflect because they had yet to dispose of the old stocks and that it would be difficult to sell at the new recommended price.
Mr. Ben Ohaegbu, a distributor of cement in Lagos, said “I got my stock of Dangote cement long before the announcement of the price slash. The slash will be implemented as soon as I get a new stock from the company. For now, the price of 50kg of cement is N1, 700 and it remains until I replenish my stock.”

Source: http://www.vanguardngr.com/2014/11/cheaper-cement-price-will-per-capita-consumption-increase/?utm_source=&utm_medium=facebook#sthash.3pAKK1CA.dpuf