Dangote Cement has explained why it had to increase cement prices by as much as N600. The company stated the reason via a press release published in the website of the Nigerian Stock Exchange (NSE).
According to the Cement giant, disruptions in Gas Supply has increased the cost of powering their plants since they now have to switch to the more expensive LPFO and coal. The company explains that LFPO and coal are about three times the cost of using gas.
The company also blamed the devaluation of the naira in “over the past few weeks” as another reason for increasing the price of a bag of cement. Ironically, Dangote Cement reported a N38 billion foreign exchange gain for the first 6 months of the year, meaning that it actually profited from the depreciation of the naira.
The company further explained that its plan to switch completely to coal in going as planned and will drastically reduce the cost of relying on gas and LPFO which are more expensive. Dante Cement says it will start mining its own coal by November 2016.
Earlier in the week, Nairametrics reported that Dangote Cement had increased the price of Cement to about N2,200 per bag 69% more than the N1,300 per bag price it announced when it slashed prices in 2015. At the time the company explained that the reason for the price slash to the provision of trucks to its distributors aiding the distribution of Cement across the country.
Get the press release below;