Dangote Cement Plc has refuted the allegation of profiteering as it maintained that its product per bag from the factory sold between N2,450 in Obajana and Gboko, and N2,510 in Ibese, inclusive of VAT.
Recall that there has been an outcry against the company in some quarters lately following the steady rise in the retail price of its product.
There were claims that the product sold higher in Nigeria than other countries, especially Ghana and Zambia.
Dangote’s Group Executive Director, Strategy, Portfolio Development & Capital Projects, Devakumar Edwin, at an interactive session with journalists in Lagos, said while a bag of cement sells for an equivalent of $5.1, including VAT in Nigeria, it sells for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.
He said that though the company has direct control over its ex-factory prices, it could not control the ultimate price of cement in the market.
According to him, it is important to distinguish Dangote’s ex-factory prices from prices at which retailers sell cement in the market.
He frowned on intentional misinformation or demarketing allegedly sponsored by some individuals to the effect that Dangote sells its cement at higher prices in Nigeria relative to other African countries at the expense of Nigerians.
Devakumar described the allegation as false, and challenged the media to conduct independent investigation into the price of cement in some other African countries, including Cameroun, Ghana, Sierra Leone, Zambia.
He said:“To ensure that we meet local demand, we had to suspend exports from our recently commissioned export terminals, thereby foregoing dollar earnings.
“We also had to reactivate our 4.5m ton capacity Gboko Plant which was closed 4 years ago and run it at a higher cost all in a bid to guarantee that we meet demand and keep the price of Cement within control in the country.”
“Over the past 15 months, our production costs have gone up significantly. About 50% of our costs are linked to USD so the cost of critical components like: gas, gypsum, bags, and spare parts; has increased significantly due to devaluation of the Naira and VAT increase.
“Despite this, DCP has not increased ex-factory prices since December 2019 till date while prices of most other building materials have gone up significantly.
“We have only adjusted our transport rates to account for higher costs of diesel, spare parts, tyres, and truck replacement. Still, we charge our customers only N300 – 350 per bag for deliveries within a 1,200km radius.
“We have been responsible enough not to even attempt to cash in on the recent rise in demand to increase prices so far’’, Devakumar said.
