Dangote’s cement price reduction excites developers

The Group Managing Director, Dangote Cement, Mr. Devakumar Edwin while announcing  the new price regime  said  a 50kg bag of the 32.5 cement grade will now sell for N1,000, while the higher 42.5 grade is to sell for N1,150 per bag instead of the current N1,700.Edwin said the reduction is part of the company`s commitment […]

The Group Managing Director, Dangote Cement, Mr. Devakumar Edwin while announcing  the new price regime  said  a 50kg bag of the 32.5 cement grade will now sell for N1,000, while the higher 42.5 grade is to sell for N1,150 per bag instead of the current N1,700.
Edwin said the reduction is part of the company`s commitment to reduce the 20 million housing deficit in the country, adding  that one of the ways of addressing housing deficit is by bringing the price of building materials down to affordable levels, especially cement.
According to him, stakeholders have commended the price reduction and say the cement market is entering the high demand phase as the dry season, which provides the opportunity for increased construction and building activities is setting in.
 There is no gainsay that cement is one of the most essential materials in building construction and any rise or reduction in its prices will have a direct impact on the property market.
Daily Trust sought the opinion of stakeholders in the built environment on the implication of this land mark cement price slash by the Dangote group.
Buldr. Musa Yakubu, immediate past chairman of the Nigerian Institute of Building (NIOB) FCT chapter said the reduction will go a long way in reducing the cost of building in the country. He said if the price of cement can go down considerably, it will impact positively on the industry, saying a lot of sharp practices that happen on site are due to the high cost of building materials.
“Let me give you an example: if you required 1,000 bags of cement to build your house and it will cost you an average of N2,000 for 2,000 bags, that is N2 million for cement alone. But imagine if the price of that cement crashes from N2,000 to N1,500, it means you have got a saving of N500,000 for the same 1,000 bags. Cement constitutes 60-70 percent of the elements that forms a building.  So the N500,000 can be used to solve some other problems on the project,” he explained.
He said three things are likely to happen if the price of cement is reduced: first, the cost of property will crash. Second, the quality of building will improve and third, the overall cost of maintaining buildings in a long term will also come down.
 Mr Kunle Awobodu, Public Relations Officer of the Nigerian Institute of Building (NIOB) said the gesture from Dangote will help to upgrade the quality and   standard of building. We just had a seminar where Dangote made a presentation and a lot of questions were asked. He said one of the questions people asked Dangote is whether the measure is to help Nigerian people and the construction sector or to drive away competitors?
“It’s a good development. Nigerian cement is one of the most expensive in the world despite the fact that there is increased production in Nigeria and most of the materials are sourced locally. NIOB as a professional institute is an advocate of reduction in cement price to N800 per bag. We have written the National Assembly on this,” said Awobodu.
 He urged the Dangote Group to ensure that the new N1,000 price tag which is the company`s rate, will translate to retail price level.
Engineer Daniel Larry appealed, “I will like to appeal to other cement manufacturers to emulate Dangote in reducing their cement prices. In doing this, they should make standard their watch word so that when they reduce prices, quality is not compromised.”
A prospective house owner, Alhaji Lawal Fisayo said the cement reduction will save him cost and will hasten his completion of work. “The cost saved will be used to buy pending building materials and will help me complete my house faster than I planned. You know that cement consumes a lot of money. The reduction by Dangote will soon crash the cement price because when everybody  begins to demand for Dangote cement other manufacturers will have no option than to follow suit,”  he said.