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Lafarge, Dangote move to crash cement price

By Udeme Clement

Amid reports that cement price is beginning to crash after President Goodluck Jonathan issued a directive to manufacturers to address the skyrocketing price, two industry players – Lafarge Cement/WAPCO Nigeria Plc and Dangote Cement – are putting in place measures that may further bring down the cost of the product.

Reports, last week, had said cement price was tumbling down from the N2,500 a bag it sold for recently to between N1,900 and N2,200.

Lafarge said weekend it was putting in place measures to increase its production capacity from 2.5 million tonnes (MT) annually to 4.5 million “in order to meet the increasing consumption demand”.

On its own, Dangote said it had started taking delivery of imported consignment of 5,000 trucks and 100 new bulk cement tankers while it also liberalised existing sales system such that customers could directly purchase a minimum of one truck of cement at between N1,500 and N1,600 per bag.

Lafarge head of communications, Temitope Oguntokun, who spoke to Sunday Vanguard, said his company had also concluded plans to commission the expansion project of N75billion (€354 million), which involves construction of a new cement plant at Ewekoro, construction of a new power plant with electricity generation capacity of 90Mega Watts (MW) and the installed capacity of 76 MW. Other projects include construction of a 4.7kilo meter long double conveyor belt to transport limestone and shale between the quarry and the new cement plant, improvements of the existing cement plant, additional power capacity, clinker silo of 60kt capacity and coal grinding mill.

Oguntokun disclosed that the project which foundation stone was laid in 2009 would be commissioned in the next few weeks. She said, “We would increase our capacity from 2.5million tonnes to 4.5million tonnes, which means more cement would be in the market. We are optimistic that when there is stability in supply of cement, it would positively affect other things including the price”.

On how the company intends to comply with the president’s directive that all manufacturers should address the soaring price of cement within one month, the spokesperson said, “We share the concern of government on the price of cement. Prior to the announcement by the Federal Government, we took pro-active initiatives by increasing the volume of our products to our outlets. We did this to ensure that a higher number of end users could purchase cement directly from us at our official price. This is following the increase of our sales outlets from seven to 19. We equally placed our official price at all our depots nationwide. We would continue with our plans of opening more depots and push more volumes to these depots. Importantly, our new cement plant would be commissioned in the next few weeks”.

Oguntokun maintained that Lafarge would continue to map out strategies to boost its production capacity to improve the cement supply chain across the country, even as it enhances adequate capacity utilisation in the business.

Dangote said in a statement that it had started taking delivery of an imported consignment of 5,000trucks and 100 new bulk cement tankers. “The trucks would be used to augment the existing fleet for direct intervention in the transport sector, while the bulk tankers would be deployed to service the construction companies for direct delivery of cement to their sites. The company has also liberalized existing sales system such that customers could now directly purchase a minimum of one truck (600bags) of cement, at their office from any of their plants or depots nationwide,” the company said.

It continued: “The official price for Dangote Cement at the two main supply point are Dangote cement plant’s (Obajana) N1,500 per bag, Benue cement plant (Gboko) N1,500 per bag. All prices are inclusive of Value Added Tax (VAT). The ex-depot price at Abuja depot is N1,600 per bag, including VAT and customer could pay for and lift a minimum of one truck. With Kaduna refinery back in production and LPFO supply now restored to the BCC plant at Gboko, the plant is now producing at full capacity and supplying the market with an average production of over 250 trailers of cement daily. The natural gas fired plant at Obajana is also in full production with an average production of over 500 trailers of cement, while the new cement plant at Ibese, Ogun State, with 6million metric tonnes per annum capacity is in the final stages of completion and would be commissioned in August 2011.

“Moreso, the new third line in Obajana plant is expected to commerce production by the last quarter of the year and would increase the total capacity of Obajana plant to 10million metric tonnes per annum, which would translate to 1,000 trailer loads of cement daily. In efforts to improve the depth and spread of distribution and sales of Dangote Cement nationwide, the company is presently appointing distributors at all locations.”

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