Stakeholders in the
cement industry have expressed concern over the increasing prices of
the product across the country in the last four months.
Some have attributed the situation to problems of inadequate supply, high transportation cost and policy somersault.
A survey conducted
by the News Agency Nigeria (NAN) across the country showed that prices
of the different brands of cement have gone up by an average of 44
percent in the past four months.
A bag of cement, which was sold for an average of N1, 500 in December 2010 is now on the average of N2, 500.
The cost of cement has now become a sensitive issue like that of petroleum products and food items.
The major brands of cement in the country are: Ashaka, Ibeto, Burham, Bua, Elephant and Dangote.
They are
manufactured in different locations across the country although dealers
said the Dangote brand is the most popular as it is more readily
available in the market.
Abdulkadir Ibrahim, a civil servant in Kano, described the rising prices of cement as “painful and incredible.”
“I am just building a corner shop near my house and it is taking me years to actualise it because of high prices of cement.
“I used to buy a
bag of Dangote cement for N1, 800 just four months ago, but now it
costs N2, 350. Government must do something about this,” Ibrahim said.
Aliyu Mahmood, a businessman in Kano, also bemoaned the high and unstable prices of cement across the country.
Supply deficit
“If I buy a bag of
Ashaka cement for N2, 150 today, tomorrow they will increase the price
to N2, 250 because of the scarcity. This is traumatic,” Mr Mahmood, who
is building a duplex in Kano, said.
The survey showed that the rising prices are often market induced because of supply deficit.
NAN reports that
cement dealers in Akure, Ondo State, have confirmed the scarcity of all
the brands which, they said, had in turn affected the prices.
Funso Omotola, a
dealer on Idanre Road, Akure, told NAN that price of Elephant brand of
cement rose to as high as N2, 750 in late March due to short supply and
high demand for the product.
Stakeholders alleged that some cement manufacturers were taking advantage of the supply gap to increase prices arbitrarily.
An official of
Ashaka Cement depot in Kaduna, who pleaded anonymity, told NAN that a
bag was sold for N1, 500 in November last year, but since then, the
depot had not received any supply.
Some dealers have also blamed high transportation cost for the recent hike in prices of cement.
Abdullrasaq Usman,
a cement distributor at Kaduna North Railway Station, told NAN that it
used to cost them N80, 000 to transport 600 bags of cement from Obajana
in Kogi State to Kaduna.
Mr Usman said it now cost N300, 000 to transport same quantity to Kaduna due to the scarcity of diesel.
“The cost of a
trailer load containing 600 bags of cement is N912,000 while
transportation cost is N300,000, which makes the unit price N2,020 from
the manufactures,” he said.
Price fluctuations
Dele Ade-Ojo, an
engineer and Head of Works Department at a local government secretariat
in Akure told NAN that fluctuations in the prices of cement has greatly
affected construction works in the council.
To accommodate the
high cost of cement, the engineer said he had to come up with so many
cost variations on projects he was handling.
A report from
Cement Manufacturers Association of Nigeria (CMAN) and Renaissance
Capital on cement situation in Nigeria confirmed that there was a
supply deficit which local producers had not been able to meet despite
investments in new plants.
“The high costs of
doing business in Nigeria and other factors have helped to keep
capacity utilisation at an industry average of 68 percent over the last
five years,” CMAN said.
