dangote insist on Reduction of Cement price

To assuage the growing concern over the perceived high cost of cement in the country, leading manufacturer of the product, Dangote Cement Plc has commenced a systematic liberalisation of the product distribution .

The Company said it has successful doubled local production with new capacity still ramping up.

The managemnet said at the weekend that it was increasing the distribution outlets by opening more mega depots and signing on new dsitributors so that the consumers can reap the benefit of the increased local production.

There have been concerns over the price of cement even with continuous efforts at increasing production, which has led to a successful local production beyond the national consumption demand .

Dangote Cement, which accounts for over 70 per cent of the local production, has continued to invest more in local production by expanding its production lines and establishing new plants to ensure the nation produces enough for home consumption and have surplus for export to other countries.

The management of Dangote Cement believes that only a liberalised distribution system can make increased local production translate to cheaper cement and bring meaning to the huge investments in local production.

With more investments by the sector’s players, local production has risen to about 27 million metric tons per annum high and above the national demand hovering between 17 and 18 million metric tons per annum.

Group Managing Director of Dangote Cement, Devakumar Edwin said the cement company decided to review its distribution network system to ensure the availability of the product by creating wider access for its customers. He noted that the move would ensure not only the stability of price, but also guarantee availability at the most reasonable price.

Edwin said the company has acquired 5000 trucks to boost its logistics and pave the way for even distribution of the product across the nation, noting that “having solved the problem of logistics, the next phase is to ensure a wider distribution depot and register more dealers and bring the product closer to the customers.

“What we are doing now is to liberalise the distribution network by increasing our depots and registering more credible distributors. All we require is the Certificate of company registration, two passport photographs and letter of intent. There is also opportunity for individuals to buy direct.

“Henceforth, we are guaranteeing 48 hours registration with a minimum purchase of one trailer load that is 600 bags monthly. In fact no deposit is required. And customers can collect from any of our plants”, Edwin stated.

According to him, individuals, corporate organisations and institutional buyers seeking to buy Dangote cement in bulk could just walk into any of the company’s depots or offices nationwide.

He added that the company has begun a campaign aimed at sensitising the people to this development. “In the long run, we hope that this effort will not only make cement available in every nooks and cranny of Nigeria but will reduce the price and make the price stable.”

“Our investments at Ibese and Obajana have helped Dangote Cement double shipments of locally produced cement that will help Nigeria towards self-sufficiency. The ramp-up of our new capacity is progressing steadily and we are increasing our distribution network to extend our reach in the market”, Edwin said.

Dangote Cement Group, which was listed on the Nigerian Stock Exchange in October 2010, is a fully integrated quarry-to-depot producer with an expected production capacity of 20mtpa in Nigeria by the end of 2012, increasing to 35.25mtpa in 2015. It plans to build a further 19mtpa of production and import capacity across Africa by 2015.

It has announced an investment of more than $2.5bn to build manufacturing plants and import terminals across Africa. Current plans are for eight cement plants in Cameroon, Ethiopia, Gabon, Republic of Congo, Senegal, South Africa, Tanzania and Zambia, as well as import/packing facilities in Cote d’Ivoire, Ghana

It has recently signed a memorandum of understanding for the construction of a 6mt plant in Calabar by 2015.

Through its recent investments, Dangote Cement has eliminated Nigeria’s dependence on imported cement and will soon transform the nation into a net exporter serving other African states. Indeed the half year result of performance of the cement company indicated over 100 per cent rise in the sale of locally produced cement.

Dangote Cement’s Obajana plant in Kogi, Nigeria, is the largest in Sub-Saharan Africa with 10.25tpa capacity across three lines and a further 3mtpa capacity planned by 2015. The Gboko plant in Benue state has 3mtpa capacity with an upgrade to 4mtpa expected by the end of the year.

The new 6mtpa Ibese plant in Ogun, near the key market of Lagos, was inaugurated in February 2012. An additional 6mtpa of capacity is planned for completion by 2015.