Dangote Group has revealed that the surge in the demand for cement products has led to a supply gap of about 40 per cent in the country’s cement market, and like every other player the Dangote Group is working actively to close out this gap.
In order to close this gap, Dangote Cement has suspended the export from its commissioned export terminals, says the group’s Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin.
The demand and consumption of cement in the nation currently outstrips supply, and this can be pegged on the growth in the country’s population, and the strong appetite for real estate investment and construction as investors consider them a good hedge against falling local currency.
In a bid to close down this gap, players in the industry have commenced measures aimed at expanding cement production infrastructure in the country.
Despite suspending exports from its recently commissioned export terminals, thereby foregoing dollar earnings, Dangote Cement has also reactivated its 4.5million mtpa capacity Gboko Plant which was closed 4 years ago.
BUA Cement on the other hand signed a contract with Sinoma CBMI of China to build three additional production plants with an installed capacity of 3 million metric tonnes each.
These plants when completed in 2022, in addition to a 3rd cement line of 3 million mtpa in Sokoto which has been booked for commissioning in mid-2021, are expected to increase the total installed cement production capacity of the company from 8 million mtpa to 20 million mtpa.
In recent times, allegations have been made against the Cement Company on the ground that it increased its ex-factory price. Devakumar Edwin revealed that these allegations are untrue as the company had not increased its ex-factory prices on its cement product since December 2019, despite the recent increase in production costs.
He explained further that over the past 15 months, DCP’s production costs had gone up significantly as about 50 per cent of its costs were linked to the dollar.
