Dangote Cement cut prices on its two main products last week, and over the weekend promised to monitor pricing by dealers so that customers would benefit from the reduction. The ex-factory price of the group’s 32.5-grade cement will now sell at N1000 per 50 kg bag and the 42.5-grade at N1150 per bag. This has been estimated at a reduction of around 14%. The announcement has been welcomed by many, including the Bua Group, which promised to follow suit with similar cement price cuts. Though there has been speculation over when consumers will see the effects of the price reduction, Mr Dangote has told press that his company plans to double the number of depots from which customers can buy directly, rather than having to go through a third party that could keep prices high for some months to come.
Dangote Cement reportedly undertook the price reduction in order to help Nigeria with infrastructure and housing projects; there is an estimated housing deficit of 17 – 20 million units. Mr Edwin, the group managing director, told attendees at a product launch over the weekend: “Dangote Cement Plc will continue to appraise its pricing regime in Nigeria's best interest, from time to time. We are an ethical organisation and we believe in putting our customers first, before profits. We believe in creating value for all our stakeholders in a sustainable manner. We will continue to pursue this philosophy.”
Sceptics have pointed to the growth in capacity in the country driving competition and the fact that Nigeria is entering a busy construction season as potential motivation for the price cuts, but regardless of the reason, end users will no doubt be pleased with the new pricing benchmark.
The cement sector has been a major draw for investment in recent years. Speaking at the weekend, Olusegun Aganga, Minister for Trade, Industry and Investment, told press: "Our main focus for the cement sector, going forward, is to improve the standard of cement and to bring the price down…There have been complaints about what is happening in the sector. But Nigerians should not worry because we know what we are doing. We have a competition policy, we have anti-trust law that we are looking at and we have a competition Bill that is going to the National Assembly. We will make sure that industrialists and investors across the country continue to have the confidence that everyone will play on a level playing ground.”
Edited from various sources by Katherine Guenioui
Read the article online at: https://www.worldcement.com/africa-middle-east/10112014/dangote-cement-cuts-prices-will-monitor-dealers-828/