They believe that with improved production capacity from cement plants across the country, supply may soon exceed demand.
They said that when compared with the nation’s overall demand for cement put at 17 million metric tons per annum, it was obvious that the supply of the product would outweigh the demand, leading to a crash in the product’s price and also ending the era of importation of the product.
However, what was not clearly stated by the manufacturers is how much would be considered cheap enough as value for a 50kg bag of cement; as findings by our correspondent showed that Larfarge and Dangote brands currently sell for N1,850 per bag in the retail market.
About this period last year, President Goodluck Jonathan’s directive that cement manufacturers to bring down the price of cement within 30 days had caused the price to dip from N2,500 per bag to between N1,850 and N1,900 in most parts of the country.
Although it was believed that the price of the product would crash further before the expiration of the 30 days deadline, it has only managed to remain around N1,850. Meanwhile, the Chief Executive Officer, Reo-Habilis Construction Ltd, Mr. Kunle Awobodu, has said that the price of cement should be brought down below N1,000 per bag.
Appraising the expected impact of the newly inaugurated Dangote Cement line three, Obajana plant on prices, the president, Cement Manufacturers Association of Nigeria, Mr. Joseph Makoju, said the good news for domestic and commercial users of cement was that they could expect a crash in prices soon.
“Just the way it is with other product types, the new plants owned by Lafarge and Dangote will increase supply and set the law of demand and supply in motion to force the market price down. We will ultimately see a fall in the price of cement,” Makoju said.
A statement by the Public Relations Officer, Dangote Cement, Mr. Sunday Esan, said the recent plant inauguration would take the company closer to the top eight cement producing companies in the world by the year 2015.
He quoted the President of Dangote Group, Aliko Dangote, as assuring Nigerians of a significant reduction in the price of the product with the new 5.25m metric tons of cement per annum Obajana Plant, Kogi State.
“The production capacity of the Obajana Plant of the Dangote Cement has been raised to 10.25m mtpa; Ibeshe Plant is producing six million metric tons and Gboko Plant, in Benue State, is producing 3.5m metric tons per annum,” the statement said.