Unperturbed Construction Sector Creates Activities For N657.9Bn Cement Sales In 6 Months.

At a period when other sectors are struggling owing to the battered economy, construction industry seems unperturbed as activities therein are on the upswing, creating N657.9 billion earnings for three cement companies in the first six months of 2018.

The revenue shows a surge in the sale of the commodity by the trio of Dangote Cement, Lafarge Africa and the Cement Company of Northern Nigeria (CCNN), which according to computations by InsideBusiness Online, rose by  N85.9 billion over the N572 billion worth of cement products sold between January and June of 2017.

Although price increases driven by inflation is a factor, the earnings however is also a pointer that despite the shrinking disposable income in the country, capital projects by both public and private sectors and individual Nigerians are still on the increase.

The earnings by the three companies also show that Nigeria with its population is still ahead of other African countries in terms of commercial activities as findings revealed that the bulk of the earnings of Dangote Cement came from Nigeria while sales from other outlets across the Africa continent continue to struggle.

Dangote Cement’s revenue in the six months grew by 16.9 per cent, rising to N482.4 billion from N412.7 billion of 2017 while CCNN reported N13.18 billion in revenue representing 191.4 per cent increase over N4.5 billion of the first six months of 2017.

Also, Lafarge Cement earned N162 billion from the sales of Cement in the first six months of 2018, up from N154.8 billion of first half of 2017.

The manufacturers have all continued to benefit from the increasing price of the commodity despite the raw materials being sourced locally. Also, the preference of the manufacturers for road haulage rather than by rail has also made the price uneven across the country.

Currently, the retail price of a bag goes for between N2,550 and N2,800, depending on the brand, location and other factors. To get a whole truck of 600 bags require N1, 470,000 or N1, 510,000, depending on the manufacturer.

 

Fluctuating Prices

The frequent fluctuations in cement prices in the country are due to a number of worrisome factors.

Some like high distribution costs and technological inadequacies are of the makings of the manufacturers while others like high maintenance costs, and erratic power supply are beyond their control.

Despite the ban on importation of cement into the country which has created huge market for the manufacturers, unstable prices of the commodity have put buyers at their mercies.

Major Players in Nigerian Cement Market.

Dangote Cement Plc

Manufacturer of the popular Dangote cement and the present biggest player in the Nigerian cement market, Dangote Cement Plc is owned by the Dangote Group, which was founded by Alhaji Aliko Dangote. The company acquired Obajana Cement Plc established in 1992 under the privatization programme of the federal government and later in July 2010 had its name changed to Dangote Cement. The company, which is presently the largest listed on the Nigerian Stock Exchange (NSE), engages in the production and distribution of cement in Nigeria and other African outlets including Congo, Senegal, Tanzania, South Africa, Cameroun, Ghana, Zambia, Sierra Leone, Liberia, Ivory Coast, and Ethiopia.

The company’s manufacturing plant in Obajana, Kogi state is the largest in Africa, with a production capacity of 10.25mmtpa. The company also has plants in Ibeshe, Ogun state (4mmtpa) and Gboko, Benue State (4mmtpa). Outside Nigeria, Dangote Cement has plants in a number of other African countries.

Lafarge Africa Plc

Another big player in the Nigerian cement market, Lafarge group facilitates the production of about 12mmtpa of cement in Nigeria, which is expected to hit 18mmtpa by 2020. The company has plants in Ogun state (3 WAPCO plants producing a total of 4.5mmtpa), Gombe state (Ashaka cement plant producing 1mmtpa), Cross River state (United Cement Company of Nigeria plant producing 2.5mmtpa), and Rivers State (Atlas cement company).

Aside cement, Lafarge also processes and distributes concrete and other construction aggregates. The company’s operation in Nigeria is under the control of the parent company LafargeHolcim, a French-Swiss company headquartered in Paris, France.