Jonathan directs Dangote, others to crash cement prices within 30 days

Jonathan directs Dangote, others to crash cement prices within 30 days

Headlines Tuesday, May 17, 2011

BY DANIEL IDONOR

ABUJA - PIQUED by the soaring prices of cement in the country, President Goodluck Jonathan, Monday, summoned the Chairman of Dangote Group, and other cement manufacturers with a directive to crash the prices of the product within 30 days period or face the wrath of the government.

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Presidential spokesman, Mr Ima Niboro, who announced Jonathan's decision after a meeting in the President's office, said the manufacturers had agreed to do all that was necessary to meet the one month time frame.

According to him, his boss, Jonathan was saddened by the complaints of Nigerians over the sharp rise in the cost of the product and decided to call a meeting of the top five manufacturers to find a way out.

At a post-meeting briefing the President of the Cement Manufacturers Association of Nigeria, CMAN, Chief Joseph Makoju; Chairman of Dangote Group, Alhaji Dangote; Chairman of BUA Group, Alhaji Abdulsamad Rabiu and Country Manager of Lafarge Cement, Jean-Christophe Barbant assured Nigerians that the prices would come down before the deadline.

Makoju told State House correspondents that both the President and the manufacturers had agreed to address the causes of the product scarcity and high cost as it concerned government obligations as well as what was required on the part of the manufacturers.

"In addressing the causes, some of the issues are on our side as the manufacturers, some of the issues are on government side and I am very confident that over the next weeks, you will see the impact on the issue of supply and prices of cement," Makoju said.

African richest man, Dangote, said that the major problems the industry was facing were in the areas of supply of Low Pour Fuel Oil (LPFO) consumed by the industry and the loss of 6, 000 trucks by his group recently, adding that the recent post election crisis in the North which caused a short down of production for weeks was partly responsible for the hike in price.

The African leading industrialist who announced that arrangement was being made by his companies to sell cement directly to retailers buying as little as one truck as part of moves to bring down prices, observed marketers were also capitalising on the increase in the pump price of diesel as they transfer additional cost to the final consumers.

Dangote said, "the other issue is that of transportation. You know once there is an increase of N1 in diesels, transporters will take that opportunity and increase their charges. When you look at when we started producing cement at Obajana, cement for the first time became cheaper, it is still cheaper than the price of Lagos while this was not the case before now.

"So you can see that we are doing quite a lot and I can assure you that in the next few weeks these prices will definitely come down," he said.

Dangote also disclosed that his organisation has ordered for 5, 000 additional trucks to ameliorate the problem of haulage of cement to all parts of the country saying "We are doing all that to try and bring down the cost of transportation but we will do it in such a way that it will not affect other transporters because we also need them in the business to survive.

"Cement will definitely be exported, worst case scenario by first quota of next year, Nigeria should be earning a lot of foreign exchange and I can guarantee you that cement would be one of the major foreign exchange earners in the next few months to come," he stated.

In his contribution, the chairman of BUA Group noted that some of the challenges that caused increase in cement prices were being addressed some of which included the closure of Kaduna Refinery and cement companies based in the North which were closed as a result of the post election crisis.

"There were challenges and some of them have been taken care of, namely the issue of LPFO. Kaduna refinery was out of production for some time but is now back on stream, and most of the companies located in the north like Ashaka cement, Sokoto cement, Benue cement rely entirely on LPFO. So, when Kaduna refinery had an issue a lot of companies were not able to produce and that have already been taken care of," he stressed.

The Country Manager of Lafarge Group, revealed that the meeting also agreed that there would be more investment in the cement sector to make the product more available and cheaper.