Dangote Cement Plc last week, consolidated its leadership position as Africa’s largest cement manufacturing company, when it formally introduced the 32.5 grade of cement meant only for plastering, into the Nigerian market.
Aliko Dangote
With an annual production of over 42 million metric tonnes of cement in all its plants scattered across about 14 African countries, Dangote Cement Plc is the undisputed leader in the cement manufacturing sector in the continent. In Nigeria, the company produces 29.5 million metric tonnes of cement annually in its three plants located in Gboko in Benue State, Ibeshe in Ogun State and Obajana in Kogi State.
Speaking at the formal launch of the new product, the Managing Director of the company, Mr. DevakumarV.G. Edwin explained that Dangote Cement ventured into the production of 32.5 grade of the product because the regulatory agency -the Standards Organisation of Nigeria, SON, has clearly spelt out the different uses of the various grades of cement which must be complied with by the cement manufacturing companies.
Recalling the bitter controversy that greeted the clamour for the standardization of cement, Edwin maintained that the 42.5R grade of cement will remain Dangote Cement’s flagship product because of its superiority and varied uses.
Numerous pleas by customers
Edwin said the company had resisted numerous pleas by its customers to produce the lower 32.5 grade and sell at a cheaper price, because it didn’t want the product to be misapplied . “Now the regulatory authority, the Standards Organisation of Nigeria, SON has stepped in. SON has taken controlling measures and they (SON) have re-emphasised that anybody producing the 32.5 cement must design their bags in a specific manner and the bags should carry clearly that this cement is meant for plastering only and not for any other application.
The regulator has also said they are constituting teams to go into all the states and monitor how the product is being used because of the various incidents of building collapse in the country. So with these regulations in place, we have the confidence that we can now go into the production of 32.5 for plastering only,” he said. According to him, about 80 percent of cement produced by the company will still be the 42.5R grade.
The Dangote Cement GMD also gave reasons for the recent reduction of the price of the 50kg premium bag of cement. According to him, the 32.5 grade of cement will now sell at N1,000 ex-factory while the 42.5R will go for N1,150 ex factory (excluding cost of transportation), because the supply has outstripped the demand for the product.
With the recent addition of nine million metric tonnes ( six million metric tonnes from Ibeshe plant and three million metric tonnes from Obajana plant) into the Nigerian market, the demand for the product is now lower than the 29.5 million metric tonnes produced by the company.
He noted that it was difficult to effect a price reduction when demand was higher than supply because retailers would still have a way of circumventing whatever measures were put in place to bring down prices. “Now, we have more products chasing fewer customers,” he said
On transportation, Mr Edwin said the company has enough trucks to deliver cement to any part of the country. The company is charging a transportation fee of N200 for every bag of cement delivered to the far north, N150 per bag for those going to the Middle Belt while those going to the southern states will attract N100 as transport fee. “The transportation fee has been pre-determined and announced to protect the consumers from indiscriminate high cost of transportation and ensure the customer gets best value for the product. We have enough trucks to deliver the cement to your door steps whether it is rainy season or dry season,” he said, adding that those demanding only one truck-load of cement will now be attended to directly by the company.
These measures, according to the Dangote Cement boss, is the company’s own way of helping millions of homeless Nigerians to build their own houses thereby reducing the housing shortfall currently estimated at 16 million units. He called for the use of the pensions fund in housing delivery. On the company’s drive for expansion, Mr Edwin said Dangote Cement will be operating in about 14 countries in sub-Saharan Africa and producing about 42 million metric tonnes of cement by the end of this year. According to him, the ravaging Ebola Virus Disease in Sierra Leone prevented the commissioning of Dangote Cement plant in that country last month.
Doyen of the cement industry in Nigeria and Honorary Adviser to the President of Dangote Cement Plc, Mr Joseph Makoju, an engineer, said the cement industry in Nigeria has come of age. He noted that Nigeria has moved from being a net importer of the product to a net exporter. This scenario, Makoju said, will help to stimulate growth and healthy competition among the different manufacturers.
The Director -General of SON, Dr Joseph Odumodu, who was represented by Mrs Cynthia Ifeagwu, praised Dangote Cement for being the first to comply fully with the new cement standards set by the organisation. He restated the commitment of the regulatory agency to monitor and enforce compliance with the new standards. Representatives of the Nigerian Institute of Architects, NIA, and Bricklayers Association in their remarks, lauded the company for producing the new grade of cement.
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