A survey conducted by our research team confirms that the price of a bag of Dangote Cement has risen to N2,200 in most markets in Lagos. This represents a 69% increase from the N1,300 per bag announced with fanfare late 2015 when it announced price cuts.
At the time the company attributed the price slash to the provision of trucks to its distributors aiding the distribution of Cement across the country.
“We only recently took a step to make cement affordable across the country. Cement price, at the beginning of the year, was hovering between N1,900 and N2,000 per bag. Today, we have crashed the price by about 40 percent. The provision of the trucks to our distributors is a follow-up to the price crashing as it will enable the distributors get the product to the retailers with ease enroute to the end users.”
According to reports from our team, the sellers attributed the price increase to the current economic situation which may have led to the increase in the wholesale price of cement . They claim that the depreciation of the naira had spiked the cost of goods and services some of which are inputs required to make Cement.
Dangote Cement in its 2016 Half Year report, announced that revenue was up 21% to about N292 billion while a profit before tax was about N125 billion representing a profit margin of 42%. The Profit was also boosted by an astonishing FX gain of about N38 billion. Without the FX gains the company may have reported a year on year profit drop of about 46% due to an increase in input cost and expenses. The company had reported gas shortages and rise in distribution cost during the year confirming that the current Cement price of N1,300 per bag was unsustainable. This probably explains why price increased to N2,200 higher than the N2,000 per bag price pre 2015 price cut.