CEMENT PRICE: DANGOTE DENIES MONOPOLISTIC TENDENCIES

The Federal Government, stakeholders in the cement sector, as well as shareholders have hailed the Dangote Cement over huge investments in cement and the recent slash in the price of the commodity, describing it as unprecedented, just as the company has denied monopolistic tendencies.
Minister of Industry, Trade and Investment, Olusegun Aganga, who led others at a stakeholders meeting in Abuja, said the decision of the Dangote Cement Plc to bring down the price of cement was a patriotic one in line with the aspiration of Nigerians and the Federal Government.
According to him, the Federal Government has attracted new private sector investments in cement sector to the tune of $7billion within three years and that government was happy with that.
He said: “Our main focus for the cement sector is to improve the standard of cement and to bring the price down more Cement manufacturers must do it themselves just as Dangote Cement has done because we do not do price regulation.”
Aganga’s statement came in midst of expression of surprise by many who thought such price slash could not be possible in the next ten years to come.
To buttress his claim, Aganga said in 2011, the installed capacity in the cement sector was 16.5 million metric tons per annum, “but today it is 39.5mmt per annum. We we came in, there were about $9billion investment in the cement sector, but today it is more than $15billion. In 2011, the direct and indirect jobs from the cement sector were less than 6000, today the sector provides about 2.2million direct and indirect jobs.”
Chairman of the Trusted Shareholders Association, Mukhtar Mukhtar, said the cement price slash was a positive development for the Nigerian economy, adding that it would create jobs, encourage the poor and the middle class to build houses, and as well bring down house rent in the long run .
“I want to on behalf of shareholders commend Aliko Dangote for yet another feat,” he said.
Coordinator of the NGO Network Mr. Muhammad Attah said the Dangote Cement deserves commendation, adding that the company has invested more than any other in the cement sector in the history of Nigeria.
The new price regime announced by the Group Managing Director of Dangote Cement, Mr. Devakumar Edwin, said the Company has pegged the Dangote 32.5 cement grade at N1,000 per 50 kg bag, while the higher 42.5 grade is to sell for N1,150 per bag.
The new prices exclusive of the Value Added Tax (VAT), represents about 40 per cent discount on the prevailing market price of the product which is currently sold for N1,700 irrespective of the grade, across the country.
Meanwhile, Group Managing Director of Dangote Cement Plc, Mr Devakumar Edwin has dismissed as baseless and reckless the accusation in some quarters that the price reduction was intended to chase some manufacturers out of the market so that Dangote Cement can enjoy monopoly.
Featuring on a Lagos based Channels Television business programme, “Business Morning”, the Dangote Cement boss wondered how the price cut would affect his competitors when they are don’t have the same production capacity. It remains to be seen how a four million per annum capacity manufacturer would aspire to rub shoulders withs 29 million per annum capacity producer.
“What we have done is a patriotic decision in the overall interest of Nigerians. We are in business to make money and we know that the price cut would not affect our profit margins. We are a Nigerian company, we have responsibility to make the product available to our people at the most reasonable price.
“As our production capacity increases, we found out that we could reduce the price to help low income earners find it easy to build their own houses and this is what we have done. Those castigating us and crying of monopoly are those who want house ownership to remain exclusive right Of the rich”
Edwin maintained that Dangote Cement likes competition and that as a matter of fact, it is the competition that has made it to be committing huge investment into cement sector. “we believe in competition and openness. We can defend our price anytime and it’s only an enemy of Nigerians that would speak against the price reduction.”
He stated that the company will continue to protect the buyers from the hands of profiteers who might want to capitalize on the new price regime to create artificial scarcity pointing out that this was one the reasons the company has been publicly publishing the advertisement of the price cut in the media.
Source: Tribune