The Joint Committee of the House of Representatives is investigating the arbitrary rise in cement prices in the country.
Major producers in the industry, including Dangote Cement Company and Lafarge Africa PLC, have been asked to submit documents detailing their production costs to justify the current market price of cement.
The committee, led by Chairman Rep. Jonathan Gaza (APC-Nasarawa), resolved to visit the production plants of these companies after reviewing their financial records. The goal is to ascertain the cost of production and determine a fair price of cement for all Nigerians.
Gaza made this demand on Friday during a public hearing in Abuja. He stated that the committee is interested in the cost of production from 2020 to the present, which has led to the current price of cement exceeding N10,000 in many parts of the country.
He said the companies have been requested to provide detailed information on their average daily consumption of coal, gas, gypsum, limestone, clay, and laterite, as well as their average daily production of cement from 2020 to date.
He added that they must submit details of all imported components for cement production and their prices, as well as local components and their costs in both naira and dollars.
The companies are also required to provide a summary of monthly prices and quantities of cement produced from 2019 to date, along with their audited accounts, bills of lading, and customs duties paid during the reviewed period.
Furthermore, they should disclose any tax waivers and other incentives received, plus contracts for gas and explosives.
Rep. Dabo Ismail (APC-Bauchi State), a committee member, pointed out that Dangote Cement Company has continued to make significant profits despite sourcing most of its raw materials locally.
Dabo noted that the company declared a profit of N524 billion in 2022, N553 billion in 2023, and has already made N166.4 billion in 2024.
He questioned why the price of cement keeps rising, causing hardship for Nigerians, while producers continue to profit.
In response, Dangote Cement Company’s Group Managing Director, Mr. Arvind Pathack, explained that 95 percent of production costs are either imported or linked to foreign exchange.
Pathack cited a 100 to 333 percent increase in the price of major cement input materials, such as gas, AGO, gypsum, imported coal, spare parts, new trucks, and tyres.
He further mentioned that the company pays in dollars for some contracts to access gas and explosives, due to insufficient provision by the Central Bank of Nigeria (CBN).
He also pointed out logistics issues, such as the poor state of key roads, which increase delivery times and truck maintenance costs.
The MD pointed out the lack of sufficient forex to settle trade obligations, resulting in forex losses of N150 billion per annum and a 30 percent interest rate on loans.
Pathack noted the over 220 percent devaluation of the naira between May 2023 and June 2024, along with challenges like insecurity and inadequate public power supply.
He also stated that while cement is sold at an average cost of N7,200, any price over N10,000 is due to retailers, not the company. He compared cement prices across countries, showing that Nigeria’s price is among the cheapest in Africa.
The committee urged the companies to review their policies and operations to reduce cement prices in the country.
In an interview with newsmen, the Chairman of the committee expressed hope that the engagement would lead to a price reduction, blaming the high prices on the inaction of the Federal Competition and Consumer Protection Commission (FCCPC).
“We are extremely hopeful that this engagement will lead to a reduction in the price of cement. FCCPC has slept on their functions so far; their inactivity and non-responsiveness to price is what has put Nigeria where we are today,” Gaza said.
Share your story or advertise with us: Whatsapp: +2347068606071 Email: info@newspotng.com
