Producers in marginal increase of cement prices in Lagos, Ogun, others
Another round of increase of cement prices have been carried out by cement and allied products manufacturers, which may worsen the plight of prospective homeowners.The recent move, according to industry watchers were carried out by Dangote Cement Plc, a leading producer of cement in the country and Lafarge cement as well as others under the Cement Manufacturers Association of Nigeria (CMAN).
The Guardian market research shows that in locations such as; Ikeja, Ojokoro, Egbeda, and Ogba areas of Lagos State and Ibafo and Mowe axis in Ogun a bag of cement now sells between N2, 550, N 2, 600, N2, 650, and N2, 700 across all brands.As expected, the manufacturers of cement-based materials, such as blocks and concrete products like paving stones, have used the slight increase in the prices to hiked their products.
Speaking on the situation, a cement dealer, Mr. Sunday Ilesanmi attributed the increase to the hike in price effected from the factory for almost a month now. According to him, N50 has been added per bag, which has forced cement sellers to also jack up the price in order to maximise profit. Ilesanmi said, ”The customers selling cement for us told us that it has increased by N50 and so they added to the price at which the sell for us. It has been on for almost a month now. We used to sell at the rate of N2, 600 before but it is now N2, 700
“They told us that the increase is from the factory. Perhaps, the prices of the ingredients used in production have increased thereby giving room for the hike in price”.
“We used to buy 100-bags before at the rate of N260, 000 in addition to the cost of transportation. We gain like N100 per bag from it aside that we will pay for our store. This situation is applicable only to Dangote cement because it is the most popular brand in the industry that builders demand for”.
He stated that the price increase only affected a particular popular brand in the market stressing that there is the need to reverse the price to bring back hope for improved construction in the housing sector.“With the increase, we still sell, but sales have been very dull lately. I used to sell like 70 0r 80 bags per day before, now it is difficult to record 50-bag sales per day. The producers should put machinery in motion that would bring about fall in price to help us increase demands from our customers. It is in the olden days that cement was sold for N1, 400.00 when we had up to three or four brands but now the price of the only popular brand is not affordable to our customers”.
Another dealer in Lafarge cement, Atoyebi Jide revealed that the price per bag is lesser by N50.00 compared to the popular brand in the market, which has made customers to demand for such product. He lamented that the increase in demand for the Dangote brand has forced him to also deal in that brand.He said, “Government needs to make heavy investment in the cement production sector so that prices would not be too costly for Nigerians who intend to become proud home-owners”.
Responding to the hike in price, a major distributor of Dangote and Lafarge cement in Ibafo-Mowe axis, Mrs. Rose Aziegbe said that it was sold at N2500 two weeks ago before the sudden hike.She said her enquiries over the cause of the hike did not revealed any reason unlike last year, when the manufacturers blamed the increase on hike in diesel and gas.
The distributor said although it may appear as a marginal increase, it will indeed affect projects as many people had already made their budgets before the increase.
According to her, the increase has already manifested in reduced sales.Also a member of Ogun State Block and Concrete Makers/Cement Dealers (OSBCOMA), Obafemi -Owode Local council; Zone, Alhaji Afeez Taofeek said the increase in the price of cement started about three weeks.
He said as at March, the product was sold for N2, 500 but as at second week of April, the association learnt that Dangote and Lafarge have added N50 from the factory and subsequently the product is being sold for as high as N2, 600 at retail sales points.Giving detailed analysis of the trends for the year, he said their association was happy with the price, which was hitherto reduced last year it was selling N2, 700 per bag before it was slashed to even N2450 in some places.
He said: “The experience is quite alarming this year. We have seen so many instabilities in the prices of cement. This year alone, from January, we bought cement for N2, 200, N2, 450, even N2, 700. For the past six months, it was horrible, but from December to ending of March 2018, prices have remained constant at N2, 500.
But now as a result of the hike in prices sales of blocks sales have dropped because we are selling nine inch block at 230 now against N220, while six inch block goes from N160 to N170.“We learnt from the factory that the cost of production has caused the undulation of prices.
“If government can come out with policies that will reduce manufacturers’ difficulties in accessing their basic production necessities, it could caused a reduction in the prices”, he added.
Sources close to Dangote told The Guardian that the manufacturers are facing increase in operational costs and security threat in some parts of the country, which affected their projected revenue.According to the sources, instead of retrenching staff, the companies have to adopt the slight increase to remain afloat. The Guardian could not reach the spokesperson for Lafarge Cement.