One of Nigeria’s Top Cement Firms, Lafarge, Speaks on Recent Price Crash after Meeting with FG

• Key officials of Lafarge Africa have expressed doubts about cement reverting to its original price
• During a media interaction recently, the company said that the massive foreign exchange rates in Nigeria are responsible for the high price of cement
• They said that the company still sells the product at an affordable price because it sources some materials locally

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Officials of Lafarge Africa have shared their doubts about cement prices returning to their original costs.

The company’s head of corporate communications, Ginika Frank-Durugbo, gave a hint during a media interaction in Calabar on Wednesday, March 20, 2024.

Cement producers agree on a price

A few weeks ago, cement manufacturers in Nigeria, including Dangote Cement, BUA Cement and Lafarge, agreed to reduce the product's price from N15,000 a bag to N8,000 and N7,000.

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Analysts say the agreement collapsed as cement continues to sell above N10,000 in Nigeria, except in a few states where buyers reported buying the product at N8,000 per bag.

Huge FX rates responsible for high cost

The Lafarge spokesman explained that Nigeria's massive foreign exchange rate in recent times has contributed to the high cost of cement.

She said:

“The high costs of the ancillary inputs into the production of cement as seriously impacted by the high cost of foreign exchange are what has affected the price of cement. Our products will go to customers at the right price.”

Daily Trust reports that Frank-Durugbor could not confirm if the company can revert the cement price to the former rate as agreed with the Nigerian government due to the high inflation in Nigeria.

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She said local quarry sourcing in Akamkpa and Akpabuyo in Cross Rivers State and local production contents, including cement bags, have helped to sell at a reduced price.

Manufacturers reveal why prices are still high

On the assumption that the hike in cement price could lead to building collapse, another Lafarge official, Tina Shobola, said the company now ensures that it provides free technical assistance to its customers in the construction business to ensure durable and quality projects.

A recent report by Legit.ng detailed the actual cost of cement after manufacturers met with the Nigerian government.

This was agreed during a meeting initiated by the Minister of Works, David Umahi, attended by his counterparts from the Ministry of Industry, Trade, and Investment, including Doris Uzoka-Anite, in Abuja on Monday, February 19, 2024.

The reduction in the price of cement is expected to impact the cost of construction projects across the country positively.

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Despite the agreement with manufacturers that cement should be sold for N7,000, the product is still being sold for between N10,000 and N11,000 in the Idimu area of Lagos state.

A similar survey by Legit.ng showed that the agreed-upon cement prices were yet to be implemented.

As of January 2024, the cement sold for N5,500 and N6,000 per bag before skyrocketing to N15,000 in February.

BUA announces decline in profit amid FX loss

Legit.ng reported that a few weeks after announcing a price slash due to the federal government's intervention, one of Nigeria's biggest cement manufacturers, BUA Cement, declared a N67.23 billion profit before tax for 2023.

The company said it recorded a decline of 44% from the N120.15 billion reported in 2022, attributing it to N69.96 billion foreign exchange loss in 2023 from the N5.5 billion reported in 2022.

The cement firm also declared a profit after tax of N69.45 billion in 2023 from N101.01 billion in 2022, amid N2.23 billion income announced and deferred tax credit posted in 2023 from N19.14 billion tax expenses reported in 2022.

Source: Legit.ng