PAWG:



How about my other question, is Dangote the only Cement manufacturer/importer? Why aren’t others selling at lower prices, or is it Dangote that fixes the price of cement?

They don't sell at lower prices because the market is in scarcity. According to Rabiu, they can't produce enough to meet demand. Rabiu is asking the government to liberalize the industry to allow more companies to enter the market.

https://www.thisdaylive.com/index.php/2021/02/09/bua-advocates-liberalisation-of-cement-policy-to-crash-price/

If you want to know how Dangote created this scarcity, read here:

https://www.thenigerianvoice.com/movie/54550/real-reasons-cement-price-is-high-iweta.html

od501:


He bought and maintains those things, not like he hired it or something. He is solely responsible for its maintenance. If it had been government owned e g. The power plant, the money would have been used for other things. And for the cost of production, how do you know this?

It's in his damn financial statements. Dangote's factories are made with the latest technology compared to older companies where they are still using 20 - 40 year old factories and outdated technology. Dangote is also significantly more vertically integrated than other cement companies.

By owning his own powerplants, Dangote gets electricity at its cost of production. In fact, he gets it cheaper than cost of productions because of the supply-chain synergies between cement production and electricity generation, which both require coal, etc.

KingAzubuike:

So who are you to dictate for a man how much he should sell his goods? If you're not comfortable with it then go for larfarge.

No, the Nigerian government should allow us to import if the local producers can't sell at a reasonable price.

od501:


Oga calm down. Many things are considered before fixing prices. Check the case of Erisco group, they had to move their business from Nigeria to china cos the cost of production is not not sustainable anymore. It is more expensive to produce here then in other countries with friendlier economic policies.

Dangote has his own power plants, his own coal mines-- he manufactures his own trucks and bags and even has a private jetty port to bring in supplies. His cost of production is literally the lowest in the world.

Wilespo:
...en dangote ? baba them no force u buy the cement na.....there may be reasons its more expensive here...have u thought about the cost of power generation , security , cost of materials and taxes he pays to the government ? the cost of production is Zambia may be less than that in Nigeria.......take for example, if it costs 850 naira to produce a bag of cement in Zambia and in Nigeria, that same bag of cement costs 1250 to produce, will u advise him to see them the same price ? we should blame the government for their policies that discourages the well being of the masses rather than the man proprietor who is just trying to make profit which is the primary aim of any business man ........in my office, i work more and earn less than my American colleague ( we have a branch office in USA).....when i inquired to know why , my boss said its cheaper to run the office from USA than Nigeria.....these guys are business men, they pay heavy taxes, huge amount of money on security and settling community bullshit here and there....na our government be our problems bros.......if things are in place, these manufacturers will lower the costs of their products....but they are taking advantage of the inefficiency of the government to exploit the citizens for their personal gains and frankly speaking u wont blame them.

Dangote's cost of production is the lowest in the world, but his price (in Nigeria) is the highest in the world.

Xisnin:


The price of some drugs in the US is higher than in Canada despite many being manufactured inside the US.
If you have ever owned a business, you would understand that your comparison does not follow as many
things factor into the price. There are three ways to drive down the price, competitors, importing, or new laws.

Zambia manufactured cement will carry Zambia's price. Even some prices of goods vary within Nigeria.

If cement production cost is the lowest in the country, I expect BUA to have run Dangote out of business
by slashing the price by half and running Dangote out of business?
As far as I know, there is no law banning new companies from investing in cement production.

While I am not a fan of price-fixing as it creates more problems in the long run.
You could start a campaign for the price of cement to be fixed and any other products you consider too expensive.
Blackmail doesn't work against businesses as only profit matters.

Please do your research before leaving a comment. Nigeria cement prices are high because of scarcity. The government doesn't allow imports and Dangote chased other companies out of the industry by hoarding limestone resources in the Southern part of the country.

BUA is not the problem. He knows what Dangote is doing is wrong, but he has no incentive to lower his prices because he is struggling to meet market demand due to the lack of supply in the industry. When a businessman is asking for more competition, you know the situation is bad. Read here for more information.

https://www.thisdaylive.com/index.php/2021/02/09/bua-advocates-liberalisation-of-cement-policy-to-crash-price/

extol1:

the man has render kogi useless. he is producing cement there and he has packed all the coal and still pack without doing anything to the community.

Chase the bastard out.

Asour:


Lafarge doesn't only sell to civil engineering companies. That is not true.

Also Business is hard adventure.

Most 2 Major local producers started out as importers. He successfully moved to production.
Others faltered. You may say they didn't, right? That Dangote used government support to eliminate them.

The question would be : If he is ALL so powerful, how come he failed at Tiger spices, Noodles/Flour & Beverages(juices).

Also how did BUA survive him? To remain in the industry?
Business is hard. I wish it wasn't. Monopolist would always seek to dominate. Capitalism is ruthless.

God help us.

I don't care how he did it. All I know is that prices need to come down or the country needs to allow imports.

vioment:
How is the ease of production in Zambia like.


Do they have power supply?

Are the workers honest above 70 %.

How are their road network like.

Traffic

Ease of truck repair

Ekelebe and alaye disturbance

Egunje payment to regular and so called traditional officials

Etc


In Nigeria, simple things are complex.

Business without generator in Nigeria is a not serious business; then the fuel.


Some businesses even in America is cheaper to start and maintain than in Nigeria.


Let us be assessing well.

I don't have any concrete opinion on Dangote.

But I know that location of business varies depending on circumstances including finance.


When I say we are one if not the most disorganized country, I no dey talk am with joy.

You don't even understand the cement industry. Dangote is not using generators, he has his own powerplants and he mines his own coal to fuel them. This is why his cost of production is among the lowest in the world.

Biodun556:



https://www.nairaland.com/6486878/sell-cement-major-distributor-1900

Dangote sells to distributor at 1900 naira

That is a dirty lie, you dumb Nigerian monkey. HIS EBITDA MARGIN IS 60% -- THIS MEANS HE IS SELLING FOR DOUBLE HIS COST OF PRODUCTION.


READ. IT. HERE. IN. THE. FINANCIAL. STATEMENT.

sunday0707:
I don't believe Rabiu, let him reduce his own product price with a reasonable amount and let's see if people would be waiting on dangote. Though until the masses in the country wakes up to reality, government through people like him and dangote would continue to toy the citizenry

Quote from Rabiu:

"Even though this cement policy is a good one, it must be done in such a way that a lot of players must come in and participate. There is no point in making a policy that only one, two, or three people are able to benefit from that policy. That does not make sense. I am benefiting from this policy, but I know it is a bad policy. So, whilst the policy is good, the way it is being administered is not good. You can’t have a policy that restricts so many people from participating, at the end of the day, you are just creating a monopoly."

Rabiu urged the federal government to open up the cement industry for more competition.

According to him, the few players in the industry, “are making so much money in the industry and Nigerians are the ones paying for this. I am part of it, but I know it is wrong. Few people are benefiting and 200 million people are suffering. The business is doing well, we are making money, but how much money do you really need?"

https://www.thisdaylive.com/index.php/2021/02/09/bua-advocates-liberalisation-of-cement-policy-to-crash-price/

slowice:
Kill Dangote before he kills Nigeria..... The man is dangerous to us all and must be stopped before he destroys what's left of this failing contraption.

I agree. The guy is a demon not a businessman. His only strategy is to create monopolies and jack up prices.

PAWG:




What do I know? Have you done your analysis on the cost of production and transportation in Nigeria in comparison to that of Zambia?


Is Dangote the only seller of Cement in Nigeria?


OP please I need answers to the following.


Your statement about Dangote being the biggest problem in Nigeria shows how myopic and hate-filled you are.

Repent

I have answered these questions numerous times. Dangote is selling his cement at roughly double its cost of production in Nigeria (60% EBITDA Margin) compared to a 22% EBITDA margin in other African countries. Transportation, etc. is included in this. Here is the 2020 financial statement.

[quote author=Aconomist post=100552582] It is a oligopoly (limited competition) not a monopoly. But Oligopoly is just as bad as monopoly because the few producers can coordinate with each other to keep prices high. Also note that Dangote's market share in the southern part of the country is pure monopoly. BUA Group sells mostly in the North and LaFarge only sells to civil engineering companies.

Asour:


Nigerians have to come up with self thought solutions to break this. Complaining would not help. Never did.
Since it's not a monopoly (technically).

Capitalism has little soul. Any advantage that can be used would be used in capitalism. If he can dominate more he probably will.

It is a oligopoly (limited competition) not a monopoly. But Oligopoly is just as bad as monopoly because the few producers can coordinate with each other to keep prices high. Also note that Dangote's market share in the southern part of the country is pure monopoly. BUA Group sells mostly in the North and LaFarge only sells to civil engineering companies -- they don't usually do residential.

tayooluwole:


At first sight, it’s pathetic to realize this huge price differences compare to other countries but then, before standing firm to a conclusion I think we need to asses many factors side by side. The tax system in Nigeria, the availability of raw materials and the price compare to other countries. Do we yet know how cheap it is to get these materials in other countries, how huge or cheap is the reward for labour services over there. I think these are important parameters in drawing our inferences

All of this information is in Dangote's financial report. He sells cement at double his cost of production in Nigeria (60% EBITDA margin) compared to a 22% EBITDA margin in other African countries.

Asour:



There are least 3/4 major cement producers in Nigeria. If Dangote's cost is exorbitant & BUA says Nigeria is the least cost producer of cement, Why doesn't BUA & Lafarge sell at half the price of Dangote currently?

They have no incentive to do that. According to Rabiu, the problem in the industry is scarcity. They can't produce enough to meet demand. The only solution is to allow more companies to enter the industry and compete OR allow imports.

Staphylococcus:



You are not brilliant OP

Chevron and Shell selling PMS over $2.50/Liter in the USA, Why are they selling cheaper in Nigeria

You see that comparison is baseless

Dangote is selling cement at double its cost of production. Get that trough your mushy Nigerian brain.

Sunmoluvic:

That's cruel, but you should take a consideration into some things such as the availability of natural resources (limestone) used in making cements. But still, the price too much

Nigeria is covered in limestone, most of Dangote's mines have a 250 year lifespan. There is no scarcity of the raw material.

Asgard13:
Nigerian elites ,chronic corruption , Godfathers..tribalism.

Those problems are very difficult to solve, whereas the problems I listed can be fixed with the stroke of a pen. We need to stop mystifying our problems and focus on the low hanging fruit.

elGenius:
Op is just being mischievous and petty, or maybe ignorant.

let me enlighten you.

say you are an international business man selling product "A" to your country and country "Bc"

if the fuel price, electricity cost, tax and salary budget in your country is almost 2 or 3 times that of country "Bc", according to the law of cost, expenses, profit and all the economy brouhaha , will you still sell the product at the same price?

if not which country will "A" be cheaper??

this is common sense.

and Aba man who sells shoes in Lagos - imported through the port - and in his home town Aba, where do you think his shoes will be cheaper.

it's all about the expenses and profit.

Dangote's profit margin of 60% disproves any argument that his costs are higher in Nigeria. His selling price is higher -- that's the only difference. Why do I have to share a nationality with such subhuman people who will be stolen from yet defend the thief?

See monke

funkybroyouknow:
+ Insecurity

the insecurity comes from the bad economy. Fix the economy the kidnapping dissapears

Rosskiiku:


Fantastic post.

Probably the best post of the entire thread.

The thing about the Ghana action is that they can AFFORD to not sell their raw cocoa, having discovered oil and gas in commercial quantities.

Not many countries in Africa are in that situation, eg Ivory Coast, another big cocoa producer.

The truth is that the only known way to industrialise is to have a huge national income and thus, a huge budget.

To get such a huge income, you need to manufacture and export your manufactured goods to markets buoyant enough to purchase them in large quantities.

The problem African nations have is that the ENTIRE WORLD has imposed sky high tariffs on goods MANUFACTURED in Africa, as part of their eternal conspiracy to have the continent remain their source of raw materials for building their industries.

And this is not immediately resolved by saying 'Africans should trade with Africans', because the purchasing power on the continent is still relatively low to support manufactured, finished goods.

So it's a bit of a catch 22 situation. The good thing is that the intra-African economic free trade zone is up and running, and hopefully in time, greater continental trade will build indigenous African wealth to the point it can support heavy industries and their products.

More false information from Nairaland's biggest liar. The U.S. has had tarriff free access for African goods for years through the AGOA Act.

AlhajiBitcoin:
You didn't mention farmers being unable to farm.

Is food not a major part of the economy ?

Those farmers are low productivity and barely contribute to growth.

PatryG:
You need to find yourself man. Your inferiority complex is alarming.

I'm not inferior. You are.

MrMaestro:
I've come to the conclusion that there's a significant enough number of igbo people that have a LOT of self hatred. I don't understand why but it's becoming increasingly clear. Between Aconomist, Ezenri, and all the dumb IPOB members chanting for Trump all the way in eastern Nigeria like self hating slaves. As if he's ever once given them a single iota of a thought. It's really starting to become clear. Never have I seen a black tribe so willing to align themselves with white barbarians.

White people were never the smartest, strongest, or best. They were, and are, the most ruthless. Point blank period. Only an uncivilized man would venerate this. You can respect it, but veneration is something different altogether. If the United States didn't have 400 years of unadulterated free labor, it definitely wouldn't be the biggest economy in the world. The same can be said for Europe and their plundering of Africa. The only people that legitimately developed on their own merit was the East, middle east, and eastern europe.

Africans already civilized the world. Egypt was the first and greatest civilization in human history. That's just a fact. They created mathematics, science and research. They had their own writing systems, books, and the greatest infrastructural achievement in human history, built by a black man (Pyramids, unless the idiots here would claim Imhotep is white? Lol). Africa has the oldest university in the world in Timbuktu. We built the foundation of what the world uses today. We are in a pocket of a 100 yr period where we're recovering from European conquest. Don't let this short sliver of time make you forget that we were doing just fine, and ruled the world for 2,500 - 3,000 years. And were doing just fine after Egypt fell, with the Songhay Empire, Ghana Empire, Oyo Empire, etc.

There's nothing more to prove. People like Aconomist and Eze Nri would simply bow to white people in whatever they do. All I'm saying is when Blacks ruled the world there was never a world war, and huge lands of the earth rendered uninhabitable because of a pissing match (Hiroshima & Nagasaki). Talk about recklessness, they could've made humanity extinct like the barbaric children that they are. An Earth that has been proven to be a rare life nourishing planet not only in our solar system but rare in the universe overall.

But whatever, I've made my point. The only thing I'll say is this. African leaders need to get their shit together and take back control of this planet like we are supposed to. We have the natural resources, there's no reason why every major global decision shouldn't be going through us. If every country did what Ghana is doing now (refuse to export their natural resources, make products themselves), the world would bend to their knees. No silicon for your devices, No more plutonium for your wars. You can guarantee that white people would do that if it were the other way around. I'm not saying it should happen overnight, but I'll know Africa is serious when their Year 2050 plan for Africa includes a goal of less than 10% natural resource export. Adding value to all their resources before exporting anything. Most of the rest of the world is already set up to be consumers anyway

I'm not Igbo. But I do agree that Igbos seem to have a more realistic worldview compared to other tribes. So far, it hasn't amounted to much in terms of economic development for their homeland. But they seem to have that spark of self-awareness that most blacks lack.

Cybercop2002:
so bad of you ,you always make excuses in everything ,you are so obsese with white ass

I detest white people. My problem is the stupidity of blacks, not the "greatness" of whites. In my position, someone who loved whites would just wash his hands of Africa.

Inventor of electricity

1. Multiple exchange rates

2. Low competition in the cement industry (Dangote cement).

3. Excessive government spending (salaries, cars, refurbishments etc.)

If you fix these three things, Nigeria will grow at 6% + annually.

HellVictorinho:

Rubbish!!!!
Germans,Jews,Chinese, Japanese are the most successful to your damaged brain only.

Who is the most successful in your brain?

HellVictorinho:



This doesn't make sense.
It still shows inferiority complex.

***Spits****

It's a fact