Federal Government and Cement Manufacturers Meet Over Escalating Price of Cement, Brainstorm on Challenges Facing Cement Manufacturing, Agree on a Price Range of N7,000- N8,000/ 50 Kg Bag
1. The Federal Government has agreed with the cement manufacturers on the modalities to tackle the escalating price of cement in Nigeria. This was the outcome of the meeting of the Honourable Minister of Works, His Excellency, Sen. Engr. Nweze David Umahi GON the Honourable Minister of Industry, Trade and Investment, Dr. Doris Uzoka-Anite, the cement manufacturers and the Cement Producers Association. The meeting held closed door at the office of the Honourable Minister of Works. Mabushi, Abuja, had in attendance, the representatives of Dangote Cement Plc, BUA Cement Plc, Larfage Africa Plc and Cement Producers Association.
2. In their separate remarks, the Honourable Minister of Works said the meeting was aimed at addressing the concerns of Nigerians on the escalating cost of cement in Nigeria marked by the disparities between the ex-factory price and the market price of cement. He expressed hope that the meeting would proffer enduring solutions to the unabating increase in cement price.
3. Also in her remarks, the Honourable Minister of Industry, Trade and Investment said it was worrisome that the price of cement was surging despite her Ministry's regulatory policies and the Backward Integration Programme (BIP) introduced to manage cement price and development, and expressed surprise that the whole idea of the BIP on the management and development of cement manufacturing industry is not bearing the desired fruit.
4. A communique was issued after the meeting and was read by the Honourable Minister of Works as contained in the appendix hereunder. The two Honourable Ministers also used the opportunity to re-assure Nigerians that the Renewed Hope Administration of His Excellency, President Asiwaju Ahmed Bola Tinubu, GCFR is committed to addressing the economic challenges facing the country and shall leave no stone unturned in addressing the escalating prices of commodities, including the price of cement in Nigeria.
5. Confirming the communique as the true reflection of their deliberations, the spokespersons to the cement manufacturers and the Cement Producers Association thanked the two Honourable Ministers for their sense of devotion to the cause of national development and expressed their confidence in the timely intervention of the Federal Government to the challenges facing cement manufacturing in Nigeria. The spokesperson of Dangote Cement Plc and GMD/CEO, Mr Arvind Pathak added, "the Honourable Ministers gave us a kind hearing, and we have agreed for a window of 30 days in which we re-assemble and see how best we can move on that."
The spokesperson of BUA Cement Plc and Group Executive Director, Mr. Kabiru Rabiu said. "And another thing that I need to also add is that BUA is committed to bringing an additional 6 million tons of cement in the next few weeks, and that will seriously dampen the pressure of supply in the market, and we will continue to commit to this engagement." The spokesperson to Lafarge Africa Plc and Commercial Director Mr. Gbenga Onimowo said " it was very timely, honestly, listening towards the challenges that we all face as manufacturers, I think we appreciate that, and we do look forward to the solutions coming, the support they're going to give within the next coming days."
The President of Cement Producers Association, Prince David Aweta, added. "I am actually here to advocate for the six other players to join in the industry because practically, we can feel that the operators in the cement industry at the moment are so few and that is why we are having this perennial problem of cement hikes particularly during dry seasons."
DETAILS OF THE COMMUNIQUE
Meeting of Cement Manufacturers – Dangote Cement Plc, Bua Cement Plc, Larfarge Africa Plc & Cement Producers Association with the Honourable Minister of Industry, Trade & Investment, Dr. Doris Uzoka-Anite and the Honourable Minister of Works, Sen. Engr. Nweze David Umahi, CON Held at the Office of the Honourable Minister of Works, Mabushi, Abuja on Monday, 19th February, 2024
1. The meeting noted the challenges of the manufacturers like:
a. Cost of gas;
b. High import duty on spare parts;
c. Bad road network;
d. High foreign exchange; and
e. Smuggling of cement to neighbouring nations.
2. The government noted the challenges and reacted as follows:
a. Federal Ministry of Industry, Trade and Investment to seek some remedies from Mr. President on cost of gas and import duties.
b. Federal Ministry of Works to give more attention to fixing of the roads, especially around the locations of the manufacturers.
c. On the issue of smuggling cement, the Federal Ministry of Industry, Trade and Investment to deepen the already started engagement with the National Security Adviser on how to stop the smuggling.
3. The cement manufacturers and the Government noted that the current high price of cement is abnormal in some locations nationwide. Ideally, cement retail prices should not cost more than ₦7,000.00 to ₦8,000.00/ 50kg bag of cement. Therefore, the three cement manufacturers: Dangote Cement Plc, BUA Cement Plc and Larfarge Africa Plc have agreed that cement cost will not be more than between ₦7,000.00 and ₦8,000.00/50kg bag depending on the location.
4. Going forward, Government advised cement manufacturers to set up a price monitoring mechanism to ensure compliance, and manufacturers have willingly accepted to do so and to sanction any of her distributors or retailers found wanting.
5. Government expects the agreed price to drop after securing government's interventions on the challenges of the manufacturers on gas, import duty, smuggling, and better road network.
6. The meeting agreed to reconvene in 30 days to review progress made.
