Expectations For Lower Cement Prices In Nigeria Wane

Expectations For Lower Cement Prices In Nigeria Wane....KINDLY READ THE FULL STORY HERE▶

The soaring production costs of cement, which have increased by 121%, are dampening hopes for lower prices in Nigeria. This surge is primarily due to the combined effects of Naira depreciation and high inflation……CONTINUE READING 

Additionally, smuggling to neighboring countries, where cement prices are significantly higher, is exacerbating the situation. In countries like Chad and Cameroon, a 50kg bag of cement costs between $120 and $150. At an exchange rate of N1,600 per dollar, this translates to N240,000 to N270,200 per bag, far surpassing Nigeria’s local price of N8,000.

Kabiru Rabiu, Group Executive Director of BUA Cement, confirmed the issue: “A lot of cement is being smuggled into Cameroon and Chad. Cement that is transported just across the border sells for $150 to $270. This is why much of our cement is diverted to the North East, especially Maiduguri, where distributors take advantage of higher margins.”

Financial performance analysis of the top three cement manufacturers—Dangote Cement Plc, Lafarge Africa, and BUA Cement Plc—shows a decline in profitability due to rising production costs. The combined revenue of these companies grew by 84.5%, reaching N1.116 trillion in Q1 2024, up from N604.9 billion in Q1 2023. However, this revenue increase was overshadowed by a 121% rise in combined production costs, which surged to N586.6 billion from N264.9 billion in the same period.

Consequently, the combined Profit Before Tax (PBT) fell by 4.1%, dropping to N196.4 billion from N204.8 billion.

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