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Distributors, manufacturers disagree over cement price hike

By on May 11, 2014

Contrary to claims by cement manufacturers that they have not increased the price of the product, distributors say the price hike is from them (manufacturer).

The major distributors, who spoke with The Punch on Thursday, insisted that the manufacturers had added N140 to the factory price of the commodity.

Although the prices of cement are gradually coming down and currently sell between N1, 950 and N2,000 at the depots, and N2100 and N2,300 at retail shops, the distributors claimed that manufacturers had been economical with the truth regarding the factory prices.

“Initially, the problem was caused by low production; the demand for cement was higher than the supply at the beginning of the year and the manufacturers also said they had production challenges. Later, they added N140 to the original price,” a distributor, who preferred not to be named, told our correspondent.

The source said that both Dangote Cement Plc and Lafarge Cement WAPCO Plc, the largest producers of the product had increased their factory prices.

He said, “I sell three different types of cement from Lafarge; I have the power max, super set and classic and the company added the same amount on all. Even the factory price of the new Dangote 3x 42.5 cement has been increased by the same amount.

“Even after the scarcity, which was occasioned by high demand and inadequate supply, the prices are still there, we are only struggling to adjust to the new price now. The manufacturers have also told us that they will not remove the money they added because they have increased the quality of the product.”

Another distributor, who simply identified himself as Muri, said Dangote 3X was currently being offered at N1,642 per bag as the company price in the South West while Lafarge was offered at N1, 680 per bag in Lagos.

“They usually increase their prices before they call us for a meeting and no matter what we say as distributors, they don’t listen to us,” he said.

Muri recalled that towards the end of 2013 and early 2014, a 50kg bag of the commodity was sold for N1, 580 as wholesale price while retailers sold between N1, 700 and N1, 800, depending on the brand, location and market.

The price hike began in January; and by February, the price of the 50kg bag of cement had risen up to N2,500.

According to another distributor, wholesalers also contributed to the price hike indirectly as they allegedly bribed their way to cement plants when the scarcity started initially.

He said, “Distributors also contributed to the problem because out of desperation for the product, we started bribing our way through. But that was at the initial stage before the manufacturers added N140 to the orginal price.”

The distributors are optimistic that the price would further come down in the coming weeks.

But they warned that consumers should not expect it to go below N1,800.

“When there is an increase like this, it stays for one or two years, except there’s an increase in tariff but now that they have increased the price because of the cost of production and the increase in quality, we expect it to stay that way,” a source told our correspondent.

Reacting to the allegation, Dangote Cement Plc insisted that it did not increase the prices of its cement products.

The company referred our correspondent to its recent publication in newspapers, stating that factory prices from Obajana, Ibese and Gboko plants remained N1,462 while the factory price in the South West, South South and South East was given as N1, 564.

It added that the price in the North Central, North East and West was N1,735 while the Abuja price was N1,630 exclusive of value added tax.

In an e-mailed reaction, Lafarge Cement WAPCO Plc said its volume and supply to the market had not reduced as our plants were producing optimally.

The statement read, “There has been no change to our ex-work trade prices. These have not gone up for the last four years in spite of increasing input costs and foreign currency movement that have adversely impacted the cost of imported inputs.

“Retail prices are being driven by demand-supply dynamics some of which are specific to locations. We are working hard to address the supply balance through our structured distribution system. It is worth mentioning that our prices have been stable in the last three years. In fact, prices have reduced by over four per cent between 2011 and 2013.”

 

 

[Punch]

3 Comments

  1. sarah

    February 24, 2015 at 4:55 am

    Dangote cement @factory price N800perbag Call distributor manager_08130812070

  2. Johnson Dangote

    March 21, 2015 at 7:53 pm

    Dangote cement factory price N1000 call distribution manager on{ email; [email protected] or call; 07067656701}

  3. Johnson Dangote

    March 22, 2015 at 5:11 am

    Dangote cement factory price ₦1000 call distribution manager on, email; [email protected] or call; 07067656701