Dangote Wages Cement War Against Nigerians

By Tosin Olatokunbo

Dangote sits comfortably atop Nigeria’s cement sector as the biggest producer, with over 60 per cent market share in his kitty, allowing him to run the industry like a mafia. That may have been responsible for suggestions that the businessman can spark a cement price increase by just sneezing in his Lagos head office.

But in the middle of power enjoyed by the business tycoon now turned oil baron-due to the $19 billion petrochemical refinery he’s building in Lekki, Lagos -are many Nigerians who are willing to own their homes, but could not do so because of the frequent price hike of cement. They are now begging the government to remove the near monopoly enjoyed by Dangote in that sector, so that the market can, at least enjoy price stability to the benefit of all.

Those calling on the government to wade in on the cement price issue, insist that the businessman has enjoyed many government concessions, that he should reciprocate by making the price of its commodities affordable, failure, which the sector should be opened up to other investors to come in.

This is, even, more so following suggestions that Dangote is selling cement in Nigeria at a significantly higher price relative to other countries, particularly Ghana and Zambia where the company have built cement factories.

A civil servant in Lagos said he stopped building on a piece of land he acquired many years ago, at the suburb after cement price moved from N2,800 to N3, 500 within a year.  He said “the federal government should intervene because of many Nigerians who are looking forward to build their own houses.”

Another trader condemned the business man” for punishing Nigerians despite the fact that Dangote made his fortunes from the country but has lost his patriotic fervor because of the need to make huge profit at the expense of many Nigerians.”

The latest move to break the stranglehold of Dangote in the sector is coming from Rabiu Abdulsamad, the Chairman of BUA Group, an indigenous cement producer who has urged the federal government to license more cement producers in the country as a way of forcing down the price of the commodity.

Apart from Dangote, two other major cement producers are BUA and Larfarge who control less than 40 per cent market share in the cement industry.

Speaking recently on the marginal increase in the price of BUA cement, the business man, who in April of this year accused Dangote of manipulating sugar price, said it’s no longer right to have Dangote and two other major cement producers for over 200 million Nigerians, who require at least 80 million tonnes annually. He said the shortfall in supply is responsible for the sharp increase in the price of the product in the last few years.

According to him “The high price of cement is of great concern for me; the price is actually high. We are 210 million or 220 million people, 30 million tonnes of cement per annum is actually low for us.

“No one can really control the price because it depends on demand and supply. We are trying hard to ensure the price is not as high as it is now.

“Nigeria is growing with a huge economy; we need more plants on stream to cater to the rising demand of cement in the country.

“Egypt produces 85 tonnes of cement per annum and the demand of cement in that country is just 50 million tonnes per annum and that is why prices of cement in Egypt are the lowest on the African continent,’’ Rabiu said.

The Nigerian cement industry has three major players dominating the market without enough capacity to produce the 80 million tonnes annual requirement in the country.

Dangote Cement Plc is the leader with over 60 per cent of the market share with a local installed capacity of over 29 million MT, Lafarge Africa Plc having over 21 per cent share with a production capacity of 10.5million MT, and BUA Group accounts for over 17 per cent share and 8 million tonnes per annum.

This situation has enabled Dangote and others to determine the price of cement at the expense of the consumers, said the BUA chairman who had oftentimes questioned Dangote’s patriotism and insensitivity to the plights of Nigerian consumers.

Three months ago, BUA accused Dangote of trying to punish Nigerians by increasing the price of sugar from N13, 000 to N30, 000 per bag during the Ramadan fast, claims that Dangote denied.

In June, the Kano-born businessman who recently agreed to build a N2.5 billion Oncology hospital in Kwara state, also accused Dangote of being responsible for the hike of cement price to at least N3,800 per bag depending on the locations in the country.

Even though Dangote has denied the allegation by blaming the sudden surge in cement price on Naira’s volatility, Abdulsamad said the only way to crash the price, is to register other cement producers.