[size=13pt]Price of cement hits all-time high[/size]

There were indications on Friday that the current hike in the price of cement in Lagos was being dictated by the forces of demand and supply.


Last week, SATURDAY PUNCH had exclusively reported the astronomical rise in the price of cement to around N2,200 per 50kg bag.


The situation, according to a market survey, might yet assume an alarming dimension unless something is urgently done to check it.


SATURDAY PUNCH investigations showed that the increase had been fuelled by a scarcity that has had spiral effects on the distribution and sale of cement, as well as on the construction industry.


In some parts of Lagos and Ogun states, notably Ikeja, Ogba, Iyana Ipaja, Sango-Ota and Akute, the price of one bag of cement rose within one week from N2,000 to N2,500.


The current price is between N2,500 and N2,800, and it is expected to rise even higher in the days ahead.


Some dealers and building engineers, blamed the hike principally on a significant drop in the supply of cement, which they claimed was remotely triggered off by the expiration of the licences issued to manufacturers to import cement to the country.


Others claimed that the shortfall in supply was due to the delay on the part of Customs to clear large shiploads of imported cement belonging to Dangote Cement at the ports.


A dealer and building engineer, Mr. Azeez Adewuyi, told Saturday Punch that since most of other manufacturers of the cement lacked the capacity to fill the resulting gap in supply, they were unable to cope with the demand from distributors and end users.


Azeez said the development had led to the existence of long queues and longer time spent by distributors and dealers alike in securing supplies at cement factories.


He said, “If you visit any cement factory around, you will find customers who have been waiting for a long time to buy cement. These days, the queues are always very long. Sometimes you have to wait for more than two months before they attend to you.”


Most block makers in parts of Lagos and Ogun states, SATURDAY PUNCH gathered, had been seriously affected by the current increase in the price of cement.


Some of them have been compelled by the hike to either stop production entirely or cut down drastically on the quantity of blocks produced in order to meet with rising costs.


Tajudeen Awosanya, a worker in one of the block-making factories in Sango-Ota, waved at an idle moulding machine lying disused, and at scores of blocks waiting to be sold to customers willing to buy at astronomic prices, and said to our correspondent, “You can see that business is down at the moment. We have not been making or selling blocks for some time now because of the cost of cement.”


The price of a six-inch block now sells for between N130 and N140, while a nine-inch block, which is preferred by most builders, sells for N170.


An elderly building engineer in Akute, who earns his living by moulding concrete electric poles, told SATURDAY PUNCH that he had decided to halt production due to the rise in the price of cement.


“I cannot afford to buy cement at N2,700 per bag. So, I have decided to stop production for now,” he said.


Many artisans, masons, carpenters, and others connected with the construction industry, have been out of job for a while as a result of the hike.


A few of them were observed by our correspondent waiting to be engaged by clients in Oregun, Lagos, on Thursday morning.


For construction companies that get their supplies of cement directly from cement manufacturers, the delays at the factories have been a serious challenge.


Yet, reacting to the situation, the Special Adviser on Media and Logistics to the Minister of Trade and Investment, Mrs. Yemi Kolapo, said that the hike in the price of cement would soon be a thing of the past.


In a telephone interview on Wednesday, Kolapo hinted that any time from August 22, 2011, Nigerians would no longer have cause to lament the difficulty in purchasing cement at an affordable cost.


Describing the current hike in the price of cement as artificial, she explained that contrary to what Nigerians thought, the Federal Government had been holding a series of meetings with manufacturers of cement and other market players on how to raise the existing capacity for local production.


Kolapo blamed the current hike on issues surrounding the renewal of the quarterly allocations for importation of cement, which the government had granted the manufacturers of cement.


Apart from that, she added that the change of guard in the ministry of trade and investment had temporarily stalled the process of renewal of the allocations.


She said, “But that issue has been settled now. I am sure that by Monday, Nigerians will be smiling again.”


Several attempts to get the reaction of the Executive Secretary of the Cement Manufacturers Association of Nigeria, Mr. Salako James, to comment on the subject were unsuccessful.


He neither picked phone calls from the newspaper nor replied to an SMS sent to him.


In Ilorin, the Kwara State capital, the price of cement ranges between N1,650 and N1,700.


Cement is readily available in the state and is sourced from the Obajana Cement Company in the State.


A cement seller in the city, who identified himself as Alhaji Oseni Ishola, said the problem of fluctuation in prices affected the sellers. He stated that traders might buy the commodity at a higher price and all of a sudden, the price would crash and vice versa.


He added that in most cases, a seller might buy a trailer-load of cement and if care was not taken, he might not be able to buy another trailer-load at the same amount and the trader might be sent out of business.


According to him, in such a situation, it is better for one to sell at the new market price than to hoard it and lose the whole money.


He said, “Imagine that you bought a trailer-load at the selling cost of N1,750, but by the time the price crashed you would sell at a loss and you may likely not be able to recover your money, not to talk of making gain.”


He stated that one of the problems the sellers faced was that sometimes, the stocks they ordered might not all come in good condition.


He added that whenever they ordered for a trailer-load of cement, which contains about 600 bags, sometimes about 10 bags of the cement might come as solid cement, which cannot be used.


This, he stated, would lead to losses on the part of the sellers as no buyer would buy such congealed bags of cement.


The Assistant Secretary of Cement Dealers Association of Nigeria, Kwara State branch, Alhaji Abdul-Kareem Ayo, attributed the rise in the price of cement to the rise in the price of diesel and black oil that are mostly used for producing cement.


He identified power problem as another constraint. He stated that there was largely no supply of electricity to the manufacturing companies in the country, making them to depend on self-power generation.


He said in 2010, the transport cost of cement from Lagos to Ilorin was N60,000 but it had gone up to between N130,000 and N150,00 per trailer-load.


He said the only solution to the problem of rise in the price of cement was for the government to ensure the constant electricity supply in the country.


He added that the government should make fuel price, particularly that of diesel and black oil, stable so that those using them would be able to buy at cheaper and stable prices.


Also, the hike in the price of cement has slightly affected the building industry in Benin, the Edo State capital.


An investigation by our correspondent showed that there was a sharp increase in the price of the essential building product in less than a week.


A bag of (Dangote brand) cement sold for N1,750 on Thursday. A bag sold for N1,600 the previous week.


A visit to the Ekhenwan area in the state capital, the hub of cement marketers, also showed that supplies only recently picked up.


One of the marketers, who gave his name as Okwudifo, told our correspondent that the product was scarce.


Okwudifo, who responded in Pidgin English, said the manufacturers did not produce, hence the paucity in supply.


He said, “I sell for N1,750 now. Last week it was N1,600, but Dangote (cement) refused to produce. It was only on Monday that we got our supplies.”


Further investigations showed that the development had been having an adverse effect on the activities of block makers, as the price increase was sudden for some of them.


Bemoaning the development, an exasperated block manufacturer, Uyi Blocks, on Aerodrome Close, told our correspondent that he was “tired of the jumping price of cement.”


In Kano State, the commodity is readily available, but out of the reach of builders.


In some shops where the product is stocked, the owners wait endlessly for buyers to show up.


A shop owner told SATURDAY PUNCH that the process of securing the product was tedious to him. The product now costs N1,700 against its former price of N2,000, but this has not positively affected sales.


“And now that I have the product, they have been starring me in the face over the past weeks with no buyers in sight. Since the price went up, it has impoverished a lot of people namely; retailers, sales persons and masons,” the trader said.


He said that he was optimistic that things would look up in the few weeks ahead.


He, however, pleaded with President Goodluck Jonathan not to rest on his oars to ensure the stabilisation of the product price at N1,000.


But to Ishaq Garba, who runs his family cement business on Zoo Road in the Kano metropolis, it is gratitude to the Federal Government for the reduction in the price of cement.


He said cement price had been stable at N1,700 for some time. He pointed out that in spite of the stability of price, business had not peaked.


Ishaq said that some factors other than the high price had contributed immensely to the lull in business.


He said, “Now, we do not have the right circumstance or atmosphere to determine whether the reduction in cost from N2,000 to N1,700 has affected our market positively or not. So, the low sales can be determined by certain factors.


“For instance, it is the rainy season and the rain has come down heavily in Kano and you know ordinarily, construction work reduces during rainy season. Second, we the Muslims are in the month of Ramadan.


“You know this society is predominantly Islamic in nature; so, we are observing the mandatory Ramadan and ordinarily, everything grinds to a halt here due to this purpose and this includes the business of building.”


Garba explained that most of the regular buyers of cement were all out of the country to observe the lesser hajj (Umrah) in line with Islamic dictates for those who could afford it.


A mason, Bashir Musa said, “Although the price of cement has crashed from N2,000 to N1,700, President (Goodluck) Jonathan needs to further reduce the price.”


In Abeokuta, Ogun State, a bag of cement is sold for N2,200 (Lafarge and Dangote).


The dealers told our correspondent that the price was N1,700 two weeks ago.


An investigation by our correspondent showed that the product was not readily available to most of the dealers.


One of the cement dealers said sales had dropped since the sudden increase in the price of the commodity.


According to her, buyers cannot understand why they have to pay an extra N500 on a product they bought for N1,700 two weeks ago.


She said, “When customers come and they are told the new price, they will ask us why it is so. But since we have no explanation to give them, they will say it is good they suspend whatever they intend to use it for until the price drops.”


While the price of a bag of cement is increasing in some other parts of the country, an investigation by our correspondent in the Cross River State showed that the price was decreasing.


For instance, in the last one month, the price of a bag of cement has remained at between N1,400 and N1,500 as against N1,700 a few months back.


In spite of this stability, cement dealers and block moulders have lamented decreased patronage in recent times.


According to the owner of Umoren Block Moulding Industry in Ikot Ansa, Calabar, Mr. Peter Umoren, patronage is reducing because of the escalating cost of land in the metropolis and not the price of cement.


A source in the United Cement Company of Nigeria, a giant cement industry in Calabar, said the price of the product only rose in the South-West.

Source

Why are these manufacturers disobeying our Commander in Chief direct order that the price be crashed?

What will Oga Jonathan do now?

Jonathan should vow to crash the price of cement to N1,000 , then bingo cement price is N1000

^^^ For how many minutes?

well we can always go back to mud house days , after all you dont need cement and AC, our government are really making things difficult for us, i know one day there will be a great revolution and things will surely turn around for good,

I tot Odechukwu issued an order to untouchable Dangote and his crew?
"breath of fresh air indeed'

Nothing has changed. The price was "lowered" before just to keep a shut on GEJ. This was preplanned. Dangote is just making up for the short profit loss due to the short lowering of the cement price. How does nigeria expect to move forward in full force economically when they continue to let this ONE man(Dangote) have multiple monopolies or important resources. The quicker nigeria breaks up, the better.

I have the solution to congealed cement and proper packaging to reduce destruction Dangote, obajana & co needs to consult with me, their 1960s method of packaging and delivery is the problem, cement dealers should demand an upgrade in packaging and delivery methods.

The Nigeria government is not futuristic in her thinkings. We need someone who could actually make a plan today to take care of 20-40 years challenge based on projection and good governance.

While you are all crying about the price of cement, Dangote is laughing his ass to the bank. As long as he keep holding monopoly in the cement industry, it would never change anytime soon and honestly there is nothing Goodluck Jonathan can do about it!!! He would definitely not risk his second term campaign money!!!

The reason why the price of cement is high is because of protectionism.

And the pity is that many are still conversing protectionism in other industries.

Countries do not grow rich by producing things. Rather they grow rich by focusing resources where they have comparative advantage. Cement is not one of ours. If we had comparative advantage, we need not fear competition and ban.

Now that cement manufacturers like Dangote have invested billions into the industry, removing the protectionist wall is proving a headache.

OAM4J:

Why are these manufacturers disobeying our Commander in Chief direct order that the price be crashed?

What will Oga Jonathan do now?

oyb:

na so e be o

the spin and spellers were spamming the board with their usual lies

i was at a meeting last week with a contractor about to embark on a major project for my employer

weeks before, during negotiations, we had been pushng for reduced costs because of the soon to be implemented drop in cement prices

well, theres no cement in dangote's warehoues at that price.

the announcemet of dropping the price was just pr - for a limited time only - for the current batch

cement is as costly as ever



thats what you get from transformation

hot air

i no talk am

where is that spin and speller who was lying that he was building a house with cement at 1350 - i cant find the post

anyway enjoy this

https://www.nairaland.com/nigeria/topic-705279.32.html

[size=28pt]HOT AIR 2011!![/size]

stil going 5k

Is it not the stûpid government policies that are causing artificial scarcity? GEJ could remove all rètarded import restrictions today and crash the price to less than N1000 within a few weeks.

Why hasn't the government done this? Its either they're stûpid, or they've been settled by Dangote and co. Or both.

The danger of 'Monopolies'. . . .  .

Cement producers can simply cut supply to raise prices with little or no competition - simple economics.

So what can the govt do? Here's a few suggestions.

- They can provide subsidies to cement producers.
- They can cut any tax imposed on cement producers.
- They can encourage foreign companies to supply cement from outside the country by removing import tarifs.
- They can supply interest free loans to cement producers for them to invest in extra capacity.
- They can 'Nationalise' cement companies.

Sun of god:

The danger of 'Monopolies'. . . .  .

Cement producers can simply cut supply to raise prices with little or no competition - simple economics.

So what can the govt do? Here's a few suggestions.

- They can provide subsidies to cement producers.
- They can cut any tax imposed on cement producers.
- They can encourage foreign companies to supply cement from outside the country by removing import tarifs.
- They can supply interest free loans to cement producers for them to invest in extra capacity.
[/s]
- They can 'Nationalise' cement companies.

I agree 100% with the bolded. . .people like dangote and otedola are only interested in profit not concern about whether the citizens suffer or not.capitalism is a bad idea for Nigeria !

Sun of god:

The danger of 'Monopolies'. . . .  .

Cement producers can simply cut supply to raise prices with little or no competition - simple economics.

So what can the govt do? Here's a few suggestions.

- They can provide subsidies to cement producers.
- They can cut any tax imposed on cement producers.
- They can encourage foreign companies to supply cement from outside the country by removing import tarifs.
- They can supply interest free loans to cement producers for them to invest in extra capacity.
- They can 'Nationalise' cement companies.

Only applicable in a sane environment and not a country like Nigeria ruled by drug barons, thieves and murderers

aasog1:

I dont think this is Dangote's fault, or the manufacturers. I have a friend who works at Portland, Ewekoro and he said the direct price to dealers is #960 per bag, and it goes cheaper depending on bulks been purchased. The suppliers are the culprits here; but I wouldnt really blame them because most of their trucks and vehicles are suffering massively from the bad roads, road tickets and tolls; as well as the high price of Diesel which still sells at 150 per liter. Thats roughly $1 per little for diesel.
This is business my people; and who cares what the president thinks when he cant even fix the price of diesel or FERMA to make a road that would last for half a year.

I doubt if bad roads and expensive diesel are enough to explain the ridiculous prices. And you can't just blame dealers, this is a free market economy so the dealers can't just jack up prices when they have to compete among each other.

The real reason cement is so expensive is because there isn't enough of it to satisfy the huge demand. The reason there isn't enough is because only a handful of players dominated by Dangote are allowed to import the stuff and the local manufacturers cannot meet demand.

The government tries to justify the ridiculous import restrictions by claiming to be protecting the local manufacturers. That may be true but is it worth sabotaging the rest of the economy? I don't think so.

I wonder how many of those commenting on this thread actually read the piece that should generate these comments, kinda seems most are posting comments from their impression of the thread title rather than its content. The article makes it pretty clear that while the price ranges from 2k upwards in the Lagos - Ogun axis (which is understandable considering the circumstances), it still remains at the tolerable 1500-1800 in other parts of the country so i dont know what the fuss is about.

@sun of god and governor bluethooth,
can u tell us which of the nationalise industries is actually serving the purpose/s u highlighted.?
the floor is yours.

...

while u are still @ it Dangote's been co-opted into d economic team, now tell me how mr. Monopoly will supervise d affairs of d economy against his own business. I do respect Ngozi, but I see no future in her team especially when she navigates with d hawks. God help us.

The problem with cement is that the demand is more than supply and according to economics, price will increase. Nigerians just have to be patient with the manufacturers already increasing their production capacity and In no time,we will soon start exporting cement.

Though Dangote has created employment to a good number of people in the country, but that number is highly microscopic, i mean, highly infinitesimal compare to the whole population. FG should remove or reduce drastically the import tarrif of the commodity to encourage competition. This measure will crash the price for the greater good. i rest my case.

Shebi Odechukwu said they should crash the price?

make ur own cement DUHH [img]http://2.s07.flagcounter.com/count/DymW/bg=E6E6E5/txt=E6E6E5/border=E6E6E5/columns=1/maxflags=1/viewers=3/labels=0/[/img]
[img]http://s07.flagcounter.com/count/DymW/bg=E6E6E5/txt=E6E6E5/border=E6E6E5/columns=1/maxflags=1/viewers=3/labels=0/[/img]

it sold 2500 in Abuja few months ago.

Maybe its time for nigerian builders to startthinking outside the box and find alternatives to cement. We have an obsession with cement in this country

Yeah protect local manufacturers!! Open the damn thing up and let them compete!! People should be allowed to import! What's the dividend of having a local manufacturer of cement when its more expensive than importing? Importing cement is 650 per bag by the time it will get your door!!! Why are we forced to pay 2k up in Nigeria?

jossy26:

The problem with cement is that the demand is more than supply and according to economics, price will increase. Nigerians just have to be patient with the manufacturers already increasing their production capacity and In no time,we will soon start exporting cement.

Are u serious? Have you forgotten that whatever goes up in this country never comes down.

^^^ You mean like GSM lines, tomatoes, bag of rice, kerosene, mobile phones and laptops right?