The Tsunami earthquake which hit South East Asia last December 26, and the escalating cost of transportation, were identified yesterday as major reasons for the high price of cement in Nigeria. Chairman of Dangote Group of Companies, Alhaji Aliko Dangote, who disclosed this in Lagos, claimed that the Tsunami disaster destroyed the world’s largest cement factory in Indonesia, which was Nigeria’s major source of imported cement.
However, Dangote in two separate interviews with journalists in Lagos said though Nigeria has since after the disaster diverted to other countries like Malaysia, cement from these countries could not satisfy about 7.5Mt to 8Mt import demand of Nigeria per anum.
Alhaji Dangote also attributed the situation to increase in income of the three levels of governments in the country which translated to increase in the income of most Nigerians, saying it has led to increase in demand for cement as more people are now disposed to build more houses.
This, according to him, gave dealers of cement opportunity to increase the price of the commodity unnecessarily. He also attributed the hike in the price of cement to hike in local transportation due to high demand of trucks. He said due to high demand of trucks, local transporters have increased their transport cost.
According to Alhaji Dangote, transportation of a truck load of cement from Lagos to Kano and Abuja which used to cost N120,000 has now been jerked up by the local transporters to between N180,000 to N190,000. This he said translates to about N300, increase per bag.
Describing the situation as one that is not to the best interest of the country, Alhaji Dangote said his company which is the major importer of cement in the country has already put some measures on ground to arrest the situation. According to him, Dangote Group has already perfected plans to ensure that about 500,000 metric tonnes of cement is distributed between Lagos and Port Harcourt every month. He also said to arrest the present hike in price, Dangote Group has put its Benue Cement into full production.
The company he said has in addition to this, called all its distributors who bought the commodity at the soaring price to refund them the difference and has put one of its factories shut down because of low demand of cement into full operation. He said Dangote Group has also approached government to hold on the expected increase in the duty payable on imported cement. He also said Dangote Group is currently discussing with Nigerian Railway Corporation and Chinese on how to resuscitate the nation’s rail system for easy transportation to parts of the country where the company does not have factory.
The price of cement has in the past one month gone up from N950 to between N1,400 to N1,500 per bag. This has affected the prices of goods like blocks and other items that make use of cement. But the Dangote boss has assured that with these efforts being made by his company to bring down the price Nigerians will in the next one week pay less than N1000 per bag of cement while the price, is expected to come as low as N800 by January next year when all local factories will commence full local production.