Dangote’s cut in cement price long overdue, says Rabiu

Alhaji Abdulsamad Rabiu, chairman of BUA Group, owners of Edo State Cement Company, has expressed support for Aliko Dangote’s reduction of the unit cost of a cement bag to N1,000 from N1,700, which represents a 40 per cent price cut.

Rabiu said he was always concerned about the high cost of cement in the country and always advocated a reduction of the cost so that more Nigerians could have access to the product and realise their dream of owning their houses.

“It is against this background that I commend Alhaji Aliko Dangote for this patriotic initiative, which is long overdue,” he said.

He added that he had an extensive telephone conversation with Aliko on the issue last weekend and he encouraged him on the initiative.

“What Aliko has done today is significant. I am very pleased about it because it would make the cost of the product easily affordable to Nigerians,” he said.

“With the price being low, it will result in more consumers buying the product, which will drive up volume and increase market share for all stakeholders.

“I hereby urge all cement producers to emulate Dangote and bring down the cost of cement. There is absolutely no reason for a bag of cement to cost so much. While it is true that we have infrastructural challenges, it is not so much as to make the cost of cement so expensive.”

Rabiu said he had directed all of BUA’s plants to follow suit by implementing the new price regime, but admitted that more could still be done to bring down the price even further for the benefit of Nigerians.

“There is really no reason for cement to cost more than N1000 per bag, bearing in mind the massive success of the backward integration policy which implementation commenced 12 years ago with the injection of tens of billions of dollars directly and indirectly into the Nigerian cement industry, Dangote cement accounting for more of this. This has seen cement national productivity rising from a mere 2.2 million tonnes to over 30 million tonnes,” he added.

BUA group acquired the Edo State Cement Company three years ago and has pumped over $500 million in putting up a greenfield, 3-million-tonnes-per-annum plant, deploying the latest technology in cement production.

The plant will be commissioned in the first quarter of 2015. From its 500, 000 tonnes capacity, annual production is expected to rise to 3.5 million tonnes per annum.

The company has controlling equity in Sokoto Cement Company, also known as Cement Company of Northern Nigeria, which is also being expanded with an installation of 1.5 million tonnes per annum.

Construction is in progress and commissioning is slated for early 2016.