Dangote Cement Plc led by Nigerian Billionaire, Aliko Dangote has cleared the confusion around the price of a bag of cement from its factories across Nigeria.
The clarification became necessary following widespread criticism directed at Dangote over the disparity of the price of its cement in Nigeria, compared to other West African countries.
In this article, we highlight points that detail how these controversies began and what the management of Dangote Cement has done to address them.
Dangote called out for selling his cement 5,200
Nigerians took to social media on the 9th of August to call out Aliko Dangote for selling his bag of cement for N5200 in his own country but selling at N3,699.15 in Benin Republic.
In a tweet, an X-user identified as @drpenking wrote, “Dangote cement is produced in Nigeria. The raw material is sourced locally in Nigeria at almost zero cost. Nothing is imported. Almost zero taxes yet the price of cement is 5,200 Naira in Nigeria and the same is sold in Seme, at 3,699.15 Naira. Sit & Explain to me.”
Transportation costs and location of delivery affect cement price
Dangote Cement in a recently released statement noted that the price of Dangote Cement was N4,010 in Okpella, and N4,640 in Ibese, Objana, and Gboko.
The statement also explained that transportation costs and the location of delivery could make the prices range between N5,000 to N5,300 per bag.
By attributing the increase in cement price to transportation costs, the management could be indirectly saying the removal of fuel subsidy by the Nigerian government contributed to the hike.
Dangote Cement price in Cotonou
Dangote Cement also noted that checks in Cotonou, the commercial capital of the Republic of Benin indicated that cement sold between CFA 3,495 and CFA 4,500 which at the exchange rate of CFA 1:NGN 1.43, was between N4,997 to N 6,435 per bag.
Retailers can influence cement price
Also, the Group Managing Director, Arvind Pathak told Nigerians that it is important to distinguish Dangote Cement’s ex-factory prices from prices at which retailers sell cement in the market.
What this means is that retailers who need to store more cement or who are located in more expensive areas will need to charge a higher price to cover their costs. The cost of storage can vary depending on the size of the storage facility and the location.
Also, these retailers need to make a profit in order to stay in business. The amount of profit that a retailer makes can vary depending on the cost of the cement, the cost of transportation and storage, and the level of competition. Retailers who want to make a higher profit will need to charge a higher price for cement.
Dangote Cement commits to delivering quality products
Dangote further reiterated his commitment to delivering quality cement at the best price possible, despite the nation’s inflationary environment.
Pathak said, “We continue to innovate new ways to deliver quality products to millions of our customers across Africa while providing top-notch customer services.”
He also added, “At Dangote Cement, we are committed to building an inclusive and sustainable business for all stakeholders across the value chain.”
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