Although the company did not formally announce any increase in price, Daily Independent gathered that it sent out text messages to its distributors on Monday, December 15, 2014, informing them of the new price.
A text message allegedly sent on behalf of the company by one “Bukky, Dangote Cement” to the distributors reads: “Dear customer, kindly note these changes in price: Ibese (delivered) – N1, 745, Ibese (self-collected) – N1, 645 (five trucks and above); N1, 655 (below five trucks), Isolo – N1, 700 (five trucks and above); N1, 710 (below five trucks). The changes are effective today, December 15, 2014. Thanks for your patronage.”
The new price regime announced by the Group Managing Director of Dangote Cement, Devakumar Edwin, said the company has pegged the Dangote 32.5 cement grade at N1,000 per 50kg bag, while the higher 42.5 grade is to sell for N1,150 per bag.
The new prices exclusive of the Value Added Tax (VAT) represented about 40 per cent discount on the prevailing market price of the product which sold for N1, 700 irrespective of the grade, across the country.
Edwin said the move was 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 governments’ ongoing effort to reduce the near 20 million housing deficit in Africa’s largest economy.
“We recognise the need for a dramatic increase in the 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 is within our own control.
“This is 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),” he stated.
LAGOS
However, an angry distributor, who spoke on the condition of anonymity, said though the firm had previously announced the crash of the 32.5 cement grade to N1,000 per bag, and the higher 42.5 grade to N1,150 from N1,700 irrespective of the grade, the distributors never got it at the announced prices.
The distributor called on the firm to also announce the latest increase, adding that the former announcement of a crash in price was “highly counter-productive to the marketers.”
The distributor said: “When the company reduced the price to N1, 000, they were very quick to go to the press to announce it even though they were not even selling at N1, 000 to us the distributors. They were selling it at N1, 150. But as at Monday last week, they had increased it to N1, 745 for the distributors.
“Why can’t they go back to the press to announce the increase? They have already saturated the market with the announcement that the price of cement is N1, 000. People now quarrel with us that the price is now N1, 000 and this is highly counter-productive to marketers and has affected our businesses negatively.”
To many, who had abandoned their projects, the price slash was a welcome development and a signal to the resuscitation of their projects, while those who were contemplating on starting new projects saw the price slash as a moral booster.
“When I first heard the news, I was happy that the much expected game changer in the housing industry has finally come. It was in the euphoria of the news that I approached the cement dealer in Ajuwon area of Ogun State, but I was surprised that the price remained at the old price of between N1, 600 and N1, 800,” said John Alade, a resident of Ajuwon, Ogun State.
Investigations by Daily Independent revealed that little has changed between the time the new price was announced and now.
The price of the 32.5 grade has remained at the old price, while that of 42.5 grade is N1,800. It was gathered that the N1,000 price only existed on papers, because it was not even sold at that price from the factory.
Tajudeen Osho, a dealer at Berger area of Lagos, said “a bag of cement from the factory as at Thursday December 18, 2014 for 32.5 grade was N1, 250. This is in addition of N1,000 plus value added tax of N50 and a N200 transport per bag. For 42.5 grade the total cost of a bag is N1, 450. So, you can see that a bag of cement was never N1,000.”
Oyo
The price of the commodity suddenly jumped to the astonishment of Ibadan, Oyo State, residents, where a bag was sold at N1, 800 on Saturday.
Though distributors said it was difficult to adduce a particular reason for the sudden hike in price from N1,200 per bag early in the week, Bosede Ajao, one of the dealers in Jericho, Ibadan, an area that is described as Cement Depot in Ibadan simply told Daily Independent that they had no control over the price.
A resident of Apete, an outskirts of Ibadan in Ido Local Government area of the state, Lateef Isola, who was undertaking a building project in the area expressed surprise at the sudden hike in price of cement, a development he said would halt the project.
He explained that, though, the price had not been stable, oscillating between N1,200 and N1,400 in the last two weeks, the sudden jump in the price to as much as N1,800 called for concern.
Osun
In Osun State, the high cost of cement has slowed down the spate of construction, both at private and public levels.
Investigation revealed that a bag of cement is being sold at between N2, 000 and N2,100 in Osogbo, the state capital while it is being sold at N2,250 and N2,300 in places like Ilesa, Ejigbo, Iwo, Gbongan, Ile-Ife and other neighbouring towns in the state.
While some attributed the high cost of the price to the scarcity of fuel, some dealers argued that the reduction in price being speculated by Nigerians is unrealistic.
Mrs. Kofoworola Tadese, a cement dealer in Osogbo told Daily Independent, that all necessary measures needed to be put in place for the reduction in price are yet to be in place, saying that the reduction done by Dangote has political undertone.
She explained that the nation’s economy is not favourable to reduction in prices of cement which she said is a common commodity.
Ogun
Foremost block maker and dealer of Dangote Cement in Abeokuta, Ogun State capital, Eniola Olorunimbe, has attributed the selling of cement against the recommended price of N1,000 by the Dangote group as a result of not getting new stock.
Besides, he said there was no formal communication with the dealers before or after the decision to crash the price of product from the group.
Olorunimbe, who is also a concrete block maker, told Daily Independent, that notwithstanding the lack of official notice, he would start selling at recommended price as soon as he gets new stock.
The moulder, who is a graduate of the Federal University of Agriculture, Abeokuta, implored companies to evolve and embrace proper channel of disseminating information to avoid mix-up.
Bayelsa
In Bayelsa State, a bag of cement currently sells at N2, 000, despite the drastic slashing of the price to N1000 in early November by Dangote.
Findings indicated that dealers in Yenagoa, previously sold cement at N1,700 per bag irrespective of the grade.
It was gathered that the price moved up again to N2,000 a few weeks after the Dangote announcement of reduction in price.
Some of the cement dealers who spoke to Daily Independent at the weekend attributed the sudden increase in price to the devaluation of the Naira.
But a sub-dealer, Okeke Mackintosh, accused Dangote of increasing the price of cement no sooner had it made the announcement of reduction in price.
Another dealer, Hyacinth Ogo, corroborated Mackintosh, saying that traders had no choice than to increase the price to N2, 000 after Dangote failed to sustain the N1000 price reduction benchmark.
Cross River
The cost of a bag of cement in Uyo and Ikot Ekpene; major cities in Akwa Ibom States is going for as much as between N1800 and N2000 as against the expectations that the price would be on a downward slide.
Market survey in the three cities shows that Dangote Cement and UniCem Cement which were the two products available in most places were selling at about the same rate with only N100 difference in some shops and none in others.
For instance in Calabar, only one dealer had the stock of Dangote 32.5R grade which the sales attendant said was selling at N1,800 “but we are not selling the few bags left because it is what we also use in moulding blocks for sales.”
Dealers were still expecting supply of Dangote 42.5 grade in Calabar while many had stocks of UniCem 32.5R which price was between N1,800 and N2,000.
Akwa Ibom
In Uyo and Ikot Ekpene, both in Akwa Ibom State, UniCem cement was the major product available except a few places that had the stock of Dangote 42.5 grade which was going for N2000 per bag. Unicem 32.5R cement was selling at N1,900/N1,950.
One of the truck drivers who was making supply of Dangote Cement told our reporter that “our Oga said the price cannot go lower until after politics.”
A customer who spoke with us at one of the shops lamented over the price increase, noting that last week he bought cement at N1,400 per bag but suddenly the price is now N1,900/N2,000.
A dealer in Uyo, Nsikak Ibong, said the management of Dangote Cement in Calabar did not comply with the price slash at any point, as cement prices did not go below N1,400 since the declaration.
The recent price hike, according to Ibong, has made things more difficult as major distributors are giving out to retailers at between N1,800 and N1,900 for onward disposal to end users at N2,000 to N2,500.
Edo
In Edo State, the item which was sold at N1,500 by Tuesday last week was said to have attracted 25 per cent increase following the devaluation of the Naira.
One of the dealers in Benin City, Victor Okodugha, said he sold his last stock on Tuesday at N1,500 only to get to the market on Wednesday to meet a new price of N1,850.
He said when he added the transportation cost which was N50 per bag it will now get to his shop at N1,900 while the end users will now buy it at N2,000.
Delta
The leap in the price of cement in Asaba, capital of Delta State, and the entire state as a whole has continued to take its toll on residents, builders, major distributors, sellers of the product as well as the landlords as they were seen over the weekend lamenting.
Ogechuckwu Chiazor, a dealer in Asaba is now jobless. He could not continue with the work given to him as the owner of the building he is working on could not afford the price of the cement.
The case of Clement Chinwe was even pathetic. He intends to carry out restructuring of his building by converting a two room’s apartment to a two bedroom flat.
A cement dealer in Warri, Delta State, Gabriel Otone, said cement manufaturers in the country are a bunch of unpatriotic people out to make life difficult for Nigerians because the raw materials for the production of the product is almost a hundred per cent locally sourced.
A builder, Rasaq Aziza, told Daily Independent that the recent increment has slowed down the pace of work at his current work site as the quantity of bags of cement usually purchased has been reduced and he has in turn reduced the number of workers employed at his various work sites.
Anambra
In Awka, Anambra State, the price has jumped to N1, 850 per bag.
It was learnt that price of cement never reduced below N1, 350 per bag despite, Dangote’s promise of bringing the price down to N1,000.
Benjamin Okeke-Offor who owns one of the largest cement depots, at Umuokpu building materials market, said the crash of Naira could be responsible for the hike in price.
He said that before the Naira crashed, cement had hovered between N1,350 and N1,400 and not below that for a long time now.
Devaluation
Spokesperson of the Dangote Group, Tony Chiejina, failed to comment on the new price increase.
However, a top official of the company who does not want his name in print said some variables in the economy had made it impossible to sell the product at the previously announced prices.
The official said the recent devaluation of the Naira by the Central Bank of Nigeria (CBN) and the company’s inability to get gas to fire its plants have raised the cost of producing cement, adding that there was no way the company would bear the excess cost alone.
He explained that the announcement made recently by the firm that it was shifting to coal as an alternative energy source had not fully materialised, hence the anticipated price reduction had not happened.
“If we don’t increase the price, the alternative would have been to lay off workers. We have about 25,000 workers across the factories in Gboko (Benue State), Obajana (Kogi State) and Ibeshe (Ogun State).
“We spend about N1 billion everyday on our power plants. Most of our spare parts are imported at very high exchange rate. There is no way we can sustain the price below what we are giving out now,” the official said.
Daily Independent
No comments:
Post a Comment