Nigeria still cheapest country to buy cement in Africa – BUA

Chairman/Chief Executive Officer of BUA Group, Abdul Samad Rabiu has said that in spite of over 40 per cent recent rise in the price of cement in Nigeria, the country still retains the most affordable pricing for the commodity in Africa. Cement Cement He stated while speaking fielding questions from newsmen in Abuja.
“In August this year, the price of cement per 50kg of cement bag rose by more than 40 per cent from N1,400 to N2,350 and has since hovered between N2,200 and N2,300,” he said. According to him, the price remains the most competitive when compared to other countries in Africa.
He also noted that he does not foresee any possibilities of price reduction in the near future. “If you look at the price of cement today, vis-a-vis the price cement is selling in other countries, even in Africa, in terms of dollars, you would see that the price of cement in Nigeria today is probably the cheapest.
The price we are selling today translates to less than $100 per tonne. I do not believe that you can see a $100 for cement anywhere in Africa today. So, the price is not expensive, it is very competitive compared to what other countries are selling but again you would not see it because it is priced in Naira.
“Also if you look at the price regime from five years ago to what we have today, you would see that the price of cement is more or less cheaper than what it was then. So I do not believe that it would be realistic to say that there will be any price reduction for now.
What we should be hoping for is to say that there is not going to be price increase. We are working very hard to ensure we maintain the price that we have. “Although we have to be realistic that there are lots of inputs that may necessitate price increase but it will not be much.
We are quite aware that Nigerians are suffering because the economy is not at its best, the challenges are there but again if you have an outfit you have to ensure that you survive,” he said.

Man docked over alleged theft of 4 bags of cement

The Prosecutor, Sgt. Bona Glory, told the court that the accused committed the offence on Nov. 25, around 10:00 a.m. at Olorunsogo Area, off Ogunofeke, Modakeke, in the Ife North-East local government area of Osun.

Glory said that the accused entered into the house of one Lawal Abass to commit felony by stealing his four bags of cement, with a total value of N10, 000.

He added that the offence was contrary to and punishable under Section 390 (9) and 411 of the Criminal Code, Cap at of 34, Vol. 11, Laws of Osun, 2003.

The Defence Counsel, Mr Abiodun Akindipe, applied for the bail of his client in most Liberal terms, saying that the offence was a bailable one, and pledged that the accused would not jump bail.

Magistrate Bose Awosan admitted the accused to bail in the sum of N5, 000 with one surety in like sum.

Awosan added that the surety must swear to an affidavit of means, be a relation of the accused, as well as provide two recent passport photographs of himself and that of the accused.

She adjourned the case till Dec. 21, for hearing. (NAN)

Dangote Cement records N442bn revenue in nine months.

Leading cement manufacturer, Dangote Cement Plc, has declared an increased revenue of N442.09 billion in the last nine months, the Company’s financial report released on Thursday at the Nigerian Stock Exchange indicated.

The revenue in the nine month ended September 30, 2016 was 20.97 per cent higher than the figure recorded during the same period in 2015, despite the harsh operating environment, a development attributed to management’s strategy to leverage on its pan-African status.

The report indicated that Dangote Cement increased the revenue by N76.642 billion from N365.450 billion it made during the same period in 2015.

The crises of foreign exchange gulped a huge amount of its revenue, as it spent N231.684 billion on cost of sales during the review period of nine months in 2016 as against N138.694 billion spent on the same purpose in nine months in 2015.

The enormous money spent on cost of sales affected the profit after tax of Dangote Cement from N157.993 billion it made in nine months 2015 to end the current period with N133.521 billion.

Reflecting on its outlook, the Managing Director of the Company, Onne Van der Weijde, said the management is confident of delivering strong growth this year despite the challenging economic conditions facing Nigeria and the rest of Africa.

Dangote Cement achieved particularly strong sales growth in Nigeria.

It, however, expects the final quarter to be lower because of the high Q4 base in 2015 and also because of the price increase that became effective on September 1, 2016.

Weijde said: “This price increase will have an immediate and positive impact on margins in Q4, as will the elimination of LPFO from our fuel mix, as we increase our use of coal and as higher gas levels return. We do not expect to use LPFO again this year. From January 2017, our use of own-mined coal, sourced in Nigeria and paid for in Naira, will further improve margins and significantly reduce our need for foreign currency.

“As we have previously made clear, our focus will be to improve margins through cost controls and the adjustment of prices. We have new capacity coming on stream in Congo and Sierra Leone and expect Tanzania to increase its market share in the coming months.

“Foreign exchange constraints in Nigeria have made us reconsider the pace of our expansion and we now believe that a longer-term building programme will enable a more measured approach that balances our ambition for growth with the realities of obtaining foreign currency in this difficult environment.”

The Cement Company’s results showed that profit before tax fell by 38 per cent year on year to N23.8 billion while profit after tax grew markedly by 147 per cent year on year to N68.3 billion.

Reviewing the third quarter results, analysts at FBN Quest are of the opinion that the stellar growth in profit after tax could be attributed to a strong positive result of N37.5 billion on the other comprehensive income line and to a lesser extent, a tax credit of N6.3 billion.

Excluding the comprehensive income line gains, the growth on the profit after tax line would have been more subdued at around 12 per cent year on year (mainly because of a comprehensive income line loss of –N21.9 billion in Q3 2015).

Similar to Q2 2016, the comprehensive income line gains can be linked to currency translation effects of Dangote Cement’s overseas operations.”

Moving up the profit and loss, the marked decline in profit before tax was driven by a gross margin contraction of -1773 basis points year on year to 38.3 per cent and an 81 per cent year on year spike in operating expenses.

The negatives on both lines completely offset a 22 per cent year on year growth in sales to N150 billion.

Similar to Q2 2016, the marked growth in sales during the quarter was driven by volume growth across all the major regions, particularly those of the West and central African region.

While total volume despatches in Q3 grew by around 9 per cent year on year to 5.5 million metric tonnes, in Nigeria unit volume were up by 6 per cent year on year to about 3.2 million metric tonnes.

On a nine months basis, Group and Nigeria unit volumes grew by 41 per cent year on year and 28 per cent year on year to 18.4 million metric tonnes and 11.9 million metric tonnes respectively.

Also similar to Q2 2016, the firm had to contend with high fuel costs due to disruptions to gas supplies as a result of the vandalized gas pipeline infrastructure.

Although management effected a significant price hike of around 39 per cent for the Nigerian market in late August, it appears that the combination of slower sales growth in Q3 (relative to the months preceding the price review) and significantly higher fuel costs (+53 per cent year on year nine months 2016) more than offset the effect of the upward review in prices.

Cement Price Rises By 44 Per Cent, Hits N2,300 Per Bag

Dreams of lower construction costs by prospective homeowners might have become a nightmare, going by fresh increase in the price of cement products by manufacturers.

The development has already triggered a ripple effect in the open market, with prices going up by about 44 per cent in few days.

Investigations revealed that operators under the Cement Manufacturers Association of Nigeria (CMAN) have raised prices of brands by N600 per bag in factories, including additional N100 cost for haulage. This has increased retail prices from N1,600 to N2,300 depending on location. In some areas, prices have shot up to N21,350 or higher.Members of the CMAN include Dangote Cement Plc, which is emerging as a market leader and has factories in Gboko, Benue State; Obajana, Kogi State; and Ibeshe, Ogun State.

Other are: Lafarge Cement WAPCO Plc; Cement Company of Northern Nigeria Plc; Ashakacem Plc and Cross-River based United Cement Company.

Vice President, Nigerian Institute of Building, Kunle Awobodu, said: “This is going to create crisis in the construction sector and bad blood between clients and contractors, as developers will make claims for fluctuations.

“Invariably, it will lead to upward reviews of contract sums. New and on-going projects will be delayed until there is agreement on the contract variations. It can also expedite construction activities because of the anticipation of further increase.”

According to an official in one of the cement manufacturing companies, the hike is not unconnected to difficult operating environment.

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Photos From Dangote Cement Commissioning in Ethiopia

Africa’s richest man Aliko Dangote yesterday June 4th took a lot of Nigerian businessman and captains of industries to Addis Ababa, Ethiopia for the commissioning of his Dangote Cement Plant. CBN governor, NSE CEO, former Cross River State governor, Donald Duke, billionaire business men Femi Otedola, Jim Ovia and MDs of Access Bank, Zenith Bank and First Bank and the Prime Minister of Ethiopia were all at the event. See the photos below…

Cecil Hammond with CBN governor
Dangote and his guests
Former MD of Access Bank Aig with other guests admiring the plant
MDs of First Bank and Access Bank
Cecil Hammond with ex-governors Donald Duke and Niyi Adebayo
Dangote with NSE CEO
Aliko Dangote giving a speech
Prime Minister of Ethiopia giving a speech