Producers increases cement prices, Nigeria

Producers increases cement prices, Nigeria
30 May 2007

Cement producers in the country have announced a six per cent increase in the price of each bag of cement with effect from yesterday. 
This according to the producers is as a result of recent increase in VAT from five per cent to 10 per cent.  
Federal Government has last week implemented the proposed increase in VAT from five to ten per cent. The producers said given the prevailing high cost of production in the country they have no option than to increase the price to meet with the new VAT regime.  
This by implication means that the cost of each bag of cement has now increased by N65.00 from the initial N1,130 to N1,185.00 factory price.  
But distributions of the commodity said they have increased their price by N100 per bag.  
One of the distributors of Dangote Cement told Daily Champion that with effect from yesterday (Monday) the price of cement in the hands of distributors has increased fromN1,280.00 to N1,380.00 per bag.  
At the retailers end, the commodity which hitherto sold for N1,550 having come down from the N1,800 price it sold two months back will now be N1,750.  
The retailers said the difference is as a result of high cost of transport and loading and off-loading fee which according to them has almost doubled.  
This implies that while builders have recently heaved a sigh of relief from the initial high cost of the commodity, they are back into the same problem of high cost of the essential building materials.  
Speaking to Daily Champion on telephone, on the development, managing director of Flour Mills of Nigeria, Chief Emmanuel Ukpabi said Nigerians should not blame the producers or describe the development as increase in cement price but should see it as increase in VAT.  
He said ordinarily, cement price from factories remains N1,130 but that the N65.00 increase is VAT.  
According to him, his company has effected the development to the price of its Burham Cement.  
Also, Mr Okonna Dangote, head, corporate affairs, Dangote Group of Companies said the factory price of cement is now N1,850 up from the initial N1,130 at Dangote. He also said it should not be seen as a formal increase in cement price as the factory official price still remains N1,130 but that the additional N65.00 should be seen as VAT.  
Published under Cement News