As stakeholders across the country continue to hail Dangote Group over the price slash in cement, the company yesterday stated that the measure was not meant to promote monopolistic tendencies.
The federal government, stakeholders in the cement sector as well as shareholders had hailed Dangote Cement for the huge investments in cement as well as the recent slash in the price of the commodity, describing it as unprecedented. However, a few industry watchers have expressed concern that the move could hand the company monopolistic advantages in the market.
But the group managing director of Dangote Cement Plc, Mr Devakumar Edwin, has dismissed as baseless the accusation in some quarters that the price reduction was intended to chase away some manufacturers so that Dangote Cement could monopolise the subsector.
Featuring on Lagos-based Channels Television business programme, “Business Morning”, the Dangote Cement boss explained that the price cut was purely a patriotic duty to the citizens of the fatherland.
According to him, “What we have done is a patriotic decision in the overall interest of Nigerians. We are in business to make money and we know that the price cut would not affect our profit margins. We are a Nigerian company; we have responsibility to make the product available to our people at the most reasonable price.
“As our production capacity increases, we found out that we could reduce the price to help low income earners find it easy to build their own houses and this is what we have done. Those castigating us and crying of monopoly are those who want house ownership to remain exclusive right of the rich.”
Maintaining that Dangote Cement likes competition, Edwin said it was competition that encouraged the company to commit huge investment into cement sector.
“We believe in competition and openness. We can defend our price anytime and it’s only an enemy of Nigerians that would speak against the price reduction,” he stated, declaring that Dangote would continue to protect the buyers from the hands of profiteers who might want to capitalize on the new price regime to create artificial scarcity, one of the reasons the company has been publicising the price cut in the media.
Support for the Dangote cement price cut has come from several quarters.
Minister of Industry, Trade and Investment, Olusegun Aganga, who led others at a stakeholders’ meeting in Abuja, said the decision of Dangote Cement Plc. to bring down the price of cement was a patriotic one in line with the aspiration of Nigerians and the federal government.
He said: “Our main focus for the cement sector is to improve the standard of cement and to bring the price down. More cement manufacturers must do it themselves just as Dangote Cement has done because we do not do price regulation.”
According to him, the federal government had attracted new private sector investments in the cement sector to the tune of $7billion within three years, a feat it was proud of.
Aganga’s statement came in midst of expression of surprise by many who thought such price slash was not be possible in the next 10 years.
Chairman of the Trusted Shareholders Association, Mukhtar Mukhtar, described the cement price slash as a positive development for the Nigerian economy, adding that it would create jobs, encourage the poor and middle class to build houses, and bring down house rent in the long run.
“I want to, on behalf of shareholders, commend Aliko Dangote for yet another feat,” he said.
Coordinator of the NGO Network, Mr. Muhammad Attah, said the Dangote Cement deserves commendation, adding that the company had invested more than any other firm in the cement sector in the history of Nigeria.
The Company pegged the Dangote 32.5 cement grade at N1,000 per 50 kg bag, while the higher 42.5 grade is to sell for N1,150 per bag.
The new prices, exclusive of the VAT, represents about 40 per cent discount on the prevailing market prices of the product.
Dangote Refinery To Be Become Operational 2017/2018
Meanwhile, the refinery being built by Dangote Group is expected start pumping out refined fuel between the last quarter of 2017 and the first half of 2018.
This was disclosed by the operations director for Petroleum Refining of Dangote Group, George Nicolaides, in an interview with the online medium, Bloomberg, at the Platts African Refining Summit in Cape Town yesterday.
According to him, the plant in the Lagos area will be able to process 500,000 barrels of crude a day.
“The site is being cleared, the plant is being designed; we are close to the beginning of detailed engineering,” Nicolaides revealed.
In September last year, Dangote said it had agreed a $3.3 billion loan with 12 Nigerian and foreign lenders to build the refinery as well as a petrochemical and fertilizer complex costing a total of $9 billion.
At that time, the facility in Africa’s biggest economy was expected to be completed in 2016 and the capacity of the refinery was put at 400,000 barrels a day.
While Nigeria is Africa’s top producer of crude oil, it relies on fuel imports to meet more than 70 percent of its needs. Four state refineries with a combined capacity of 445,000 barrels a day are operating at a fraction of that because of poor maintenance and ageing equipment.
“Supplying the local market is the primary objective. Naturally, we can move product to the region. The government is being very supportive, very enthusiastic about this project. We are not looking for or wanting any particular subsidies,” he added.
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