Dangote cuts cement price in Nigeria

03 Sep 2015
Financial Nigeria

Summary

President Dangote Group, Aliko Dangote

Dangote Cement has cut prices of the commodity in Nigeria in an attempt to boost cement consumption in the country and also compete with imports.

The price cuts to its 3X cement brand by 6,000 naira per metric ton will still allow Dangote to achieve strong returns, CEO, Onne van der Weijde, said in a statement on Thursday.

The Lagos-based company is also hoping the lower prices will help increase export sales to neighbouring nations, he said.

Dangote Cement is controlled by Nigeria’s and Africa’s richest man, Aliko Dangote. He is seeking to grow sales and protect market share in Nigeria, while rapidly expanding elsewhere in sub-Saharan Africa. The company has grappled with fuel shortages in its home market this year that have hurt demand, and in December it raised prices to protect profit margins amid a devaluing local currency.

“We hope that reducing the cost of cement will help to stimulate building work across Nigeria at a time when the economy is in need of a boost,” Van der Weijde said. “We believe our cost-saving initiatives and new pricing strategy will help to support the naira by reducing unnecessary imports and by enabling us to generate valuable foreign exchange earnings.”

About 42 percent of Dangote’s cement sales by volume were sold outside of Nigeria in July, the company said in the statement, compared with 22 percent in the first six months of the year, and just 8 percent in 2014.

Before the price increase in December, Dangote had reduced the cost of cement in November, causing a more than 20 percent slump in the market. Paris-based Lafarge SA is Dangote’s largest competitor in Nigeria.


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