Ten days after President Goodluck Jonathan gave cement manufacturers a 30-day ultimatum to reduce the price of cement, the price of the product has started coming down slowly.
LEADERSHIP findings revealed that the product which was sold for between N2, 700 and N3 000 is now sold for between N1, 900 and N2, 100 in different parts of the country.
A survey carried out in Lagos showed that the product was sold for between N1,900 and N2000. In some parts of the Federal Capital Territory (FCT) and in Mararaba, Nasarawa State, a satellite town near Abuja, the price of the product was between N2,000 and N2, 100.
The same goes for Enugu. A dealer told LEADERSHIP in a telephone interview that the product now sells for between N2,000 and N2, 100 depending on the location.
But some dealers said the price was still high compared to other countries of the world, even as they asked the government to break the monopoly in cement manufacturing.
LEADERSHIP findings revealed that a 50kg bag of cement is sold for the equivalent of N908 in India, which is a slight increase from the 2009 price of N875. The product is also sold for the equivalent of N700 in China, Liberia and Turkey.
Commenting on the matter, a cement dealer, Mr. Christian Agbo said the hike in price was as a result of the artificial scarcity created by manufacturers. Agbo, who is the managing director of Chris Okotie Investment, said the manufacturers were responsible for the price hike. He said that it would be difficult for the price to come down unless more people were given licence to either manufacture or import the product.
Agbo said the manufacturers whom he said do not have the capacity to produce the quantity of cement needed in this country have formed a cartel.
To Mr Emeka Ezeh, another dealer, the problem was caused by the distributors and agents who he said, connived with the manufacturers to increase the price. He also blamed the trailer drivers for charging so much to convey the product to various destinations on the pretext that the price of diesel was high.
According to Ezeh, a trailer driver charged N200, 000 to convey a trailer load of cement from Obajana cement factory in Kogi or Gboko Cement factory to Abuja. He said that the amount charged by the drivers depended on the distance.
Explaining further, Agbo said that the retailers are not allowed to buy directly from the manufacturers, but have to go through the agents who would buy from the distributors. “It is the agents that sell to us. As a retailer, you cannot pay directly to the manufacturer.”
In a letter to the president dated May 9, 2011, the chairman of the Cement New Entrants Forum of Nigeria (CNEFN), Prince David Iweta, asked the federal government to allow its members to import one million tonnes of cement every year for a period of five years since the manufacturers could not meet the demand.
He said that following the cement manufacturers’ recommendation, government increased duty and levy on imported bulk cement from 5 to 15 per cent and introduced Cement Technology Levy (CTL) of 20 per cent, thereby pushing the landing cost of imported cement to N1, 700 per bag. According to him, a bag of locally produced cement should be sold for between N500 and N700.
Iweta, who is the chairman of Madewell Portland Cement, Sapele, Delta State, said that members of the CNEFN, notably himself, chairman of Reagan Portland Cement Chief Reagan Ufomba, chairman of Magin Roi Portland Cement Mr. Kola Sowande and chairman of Gateway Portland Cement, Chief Emmanuel Odegbami had sustained cement price stability at N1, 600 per bag from 2008 – 2010 before the present crisis.
He asked the federal government to reverse levies on imported bulk cement to five per cent and approve the licence of some cement companies which applications were currently with the Ministry of Commerce and Industry.
A market survey carried out in Lagos revealed that the major distributors of the product may have been boxed to a tight corner as they have started reducing the price of the product.
Also speaking, Alhaji Alani Sullaymon of Alani & Co Limited said: “I decided to be selling the goods I have for N1,900 to dispose of what I have in stock, not because the manufacturers have beat down their price. Government is very powerful; they can crash the price and I would lose a lot of money .But now that I am selling for N1900 I have not gained and have not lost my money.”
LEADERSHIP findings revealed that the product which was sold for between N2, 700 and N3 000 is now sold for between N1, 900 and N2, 100 in different parts of the country.
A survey carried out in Lagos showed that the product was sold for between N1,900 and N2000. In some parts of the Federal Capital Territory (FCT) and in Mararaba, Nasarawa State, a satellite town near Abuja, the price of the product was between N2,000 and N2, 100.
The same goes for Enugu. A dealer told LEADERSHIP in a telephone interview that the product now sells for between N2,000 and N2, 100 depending on the location.
But some dealers said the price was still high compared to other countries of the world, even as they asked the government to break the monopoly in cement manufacturing.
LEADERSHIP findings revealed that a 50kg bag of cement is sold for the equivalent of N908 in India, which is a slight increase from the 2009 price of N875. The product is also sold for the equivalent of N700 in China, Liberia and Turkey.
Commenting on the matter, a cement dealer, Mr. Christian Agbo said the hike in price was as a result of the artificial scarcity created by manufacturers. Agbo, who is the managing director of Chris Okotie Investment, said the manufacturers were responsible for the price hike. He said that it would be difficult for the price to come down unless more people were given licence to either manufacture or import the product.
Agbo said the manufacturers whom he said do not have the capacity to produce the quantity of cement needed in this country have formed a cartel.
To Mr Emeka Ezeh, another dealer, the problem was caused by the distributors and agents who he said, connived with the manufacturers to increase the price. He also blamed the trailer drivers for charging so much to convey the product to various destinations on the pretext that the price of diesel was high.
According to Ezeh, a trailer driver charged N200, 000 to convey a trailer load of cement from Obajana cement factory in Kogi or Gboko Cement factory to Abuja. He said that the amount charged by the drivers depended on the distance.
Explaining further, Agbo said that the retailers are not allowed to buy directly from the manufacturers, but have to go through the agents who would buy from the distributors. “It is the agents that sell to us. As a retailer, you cannot pay directly to the manufacturer.”
In a letter to the president dated May 9, 2011, the chairman of the Cement New Entrants Forum of Nigeria (CNEFN), Prince David Iweta, asked the federal government to allow its members to import one million tonnes of cement every year for a period of five years since the manufacturers could not meet the demand.
He said that following the cement manufacturers’ recommendation, government increased duty and levy on imported bulk cement from 5 to 15 per cent and introduced Cement Technology Levy (CTL) of 20 per cent, thereby pushing the landing cost of imported cement to N1, 700 per bag. According to him, a bag of locally produced cement should be sold for between N500 and N700.
Iweta, who is the chairman of Madewell Portland Cement, Sapele, Delta State, said that members of the CNEFN, notably himself, chairman of Reagan Portland Cement Chief Reagan Ufomba, chairman of Magin Roi Portland Cement Mr. Kola Sowande and chairman of Gateway Portland Cement, Chief Emmanuel Odegbami had sustained cement price stability at N1, 600 per bag from 2008 – 2010 before the present crisis.
He asked the federal government to reverse levies on imported bulk cement to five per cent and approve the licence of some cement companies which applications were currently with the Ministry of Commerce and Industry.
A market survey carried out in Lagos revealed that the major distributors of the product may have been boxed to a tight corner as they have started reducing the price of the product.
Also speaking, Alhaji Alani Sullaymon of Alani & Co Limited said: “I decided to be selling the goods I have for N1,900 to dispose of what I have in stock, not because the manufacturers have beat down their price. Government is very powerful; they can crash the price and I would lose a lot of money .But now that I am selling for N1900 I have not gained and have not lost my money.”
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