By Charles Okonji
UNLIKE other fast moving consumer goods whose prices have soared high since the outbreak of the coronavirus pandemic (COVID-19), the price of cement has remained stable till date. That much The Nation can authoritatively report.
Stakeholders as well as some operators in the sector believe that price stability of cement being experienced and enjoyed in the country today was as a result of backward integration policy implemented by the government and driven by the Dangote Group through the Cement Revolution plan of the Group.
Hitherto, cement was sold for N2,550 in the open market and is still being sold at the same amount till date despite rise in prices of commodities before the pandemic.
A cement retailer in Magboro area of Ogun State, Ibrahim Ogundipe who has been in business for over a decade confirmed to The Nation that in recent times, price has remained the same, saying that prices of all the brands ranging from Dangote Cement to Elephant Cement have been stable.
Also commenting, Apostle I.I. Aina, National Secretary, Block Makers Association, commended cement manufacturers for not reviewing the price of the product despite daunting economic challenges confronting them, adding that it will help them remain in business as prices of other inputs have since increased.
Commenting on cement price stability, Group Chief Branding & Communication Officer, Dangote Group Mr. Anthony Chiejina stated that the company’s relentless drive towards backward integration and diversification of the economy as demonstrated in the cement revolution accounted for the stable price regime.
Chiejina said, “Our relentless drive towards backward integration and diversification of the economy as demonstrated in the cement revolution accounted for the stable price regime. We have not only surpassed local demand, but now net exporter of cement.
“COVID-19 serves as a big lesson for the country to embark on a genuine aggressive industrialisation policy. If achieved, one can easily absorb the shock of logistics and supply-chain challenge as witnessed by many companies during this pandemic.
“We recently commenced the export of clinkers to some ECOWAS countries which will boost rapidly industrialisation, production and prosperity along this sub-regional corridor. This is expected to quadruple when the fertilizer, refinery and petrochemicals kick in. It will be an unprecedented and amazing transformation.”
Echoing similar sentiments, the Head of Corporate Communication, Lafarge Plc, Ginika Fran-Durugbor stated that the company’s cost has been impacted by the recent devaluation, adding that the company has rolled-out a number of optimisation initiative.
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“Like many manufactures, our cost has been impacted by the recent Naira devaluation, however, we have rolled out a number of cost optimisation initiatives during this period that will help to minimize potential adverse effect of Naira devaluation on our value chain,” Fran-Durugbor stressed.
In the view of an economic expert and international trade analyst, Dr. John Isemede, he said that Covid-19 pandemic affected the major construction companies not only in Nigeria, but in the whole world, adding that the pandemic hindered construction works which is the major consumer of the product.
Isemede expressed that price stability of the commodity could be attributed to the border closure, as most of the country’s products are exported through the borders.
Akpan Ekpo, a professor of Economics and Public Policy reiterated that the price of cement did not rise because construction work was hindered by the dreaded pandemic, adding that it was so because supply remained.
“What is happening is that there is still much inventory, just give them some time and it will reduce and this will definitely affect the price. Note that the virus is still very much around, it has not eased off. But between two to three months’ time, the price will definitely move up, except if there is a constant supply of the product as the same quantity.
“Again, we should not forget the fact that the backward integration policy has played a lot importance in the price stability because majority of cement input is sourced locally, so the cost of Dollar has little or no impact on it. Moreover, price increase maybe be experienced soon, due to the fact that most of their expatriates earn their monthly wages in dollar and thereby adding to the cost of production which would be factored into the price because at some point they would have to increase the commodity prices to be able to pay salaries.”
According to Eng. Frank Onyebu, Chairman, Manufacturers Association of Nigeria, Apapa Branch, price stability of cement is a combination of a lot factors, adding that Nigerians should bear in mind that the purchasing power has gone down.
Onyebu, stressed that the purchasing power of went down due to the downtown in the economy; pointing out that cost of certain inputs have also gone up.
He said, “Manufacturers of cement are very big players in the economy who can actually absorb the shock, and can bear some of these costs as they have taken to backwards integration. I will advise that manufacturers in other sectors should be encouraged by the government to source materials from within the country.
“Construction companies are not doing well because of the pandemic, definitely if there is any increase in the price of the commodity, the manufacturers may experience drastic drop in sales because the purchasing power of consumers have been greatly eroded.”
“There are some other industries that are similar, especially the players in the plastic industry which are into recycling. These people can absorb some of these shocks because they get most of their materials within the country.
Recall that before 1970, Nigeria had about five functional cement plants in the country, which were majorly run by their respective state governments, such as Nkalagu cement factory in Ebonyi State, Ewekoro in Ogun State, Kalabaina in Calabar and Okpella in Edo State.