Dangote Cement Dismisses Fear Of Price Hike

Posted by African Examiner Business News, Latest Headlines Monday, June 9th, 2014

Dangote Cement Plc has dismissed claims by some manufacturers of the Cement that the recent upward review of the quality standard by the Standard Organisation of Nigeria (SON) will lead to price increase

The management of Dangote Cement allayed the fears of the consumers that the upgrade of cement quality and the new classification of grades have nothing to do with the price.

Group Managing Director of Dangote Cement, Devakumar Edwin said in Lagos at the weekend that those making such claims were doing so to blackmail the regulatory authorities into backing down on the new quality standard.

He explained in an interview with journalists that for any patriotic manufacturer with consumer interest at heart, there is no relationship between the new standard review and the Price of the product except for profiteering.

To buttress his point, Edwin noted that his company started producing 42.5 grade for the past eight years at its Obajana plant and the Ibese plant for about three years at the same with price of the lower grade of 32.5 produced by some other competitors.

According to him, the switching over to a higher quality cement shouldn’t be a difficult process that will necessitate increase in price of the product.

The Dangote Cement boss added that his company has even gone ahead to be producing 52.5 grade of cement and that it would be uncharitable for anyone to claim that the new standard would lead to price hike for the product.

Edwin then pledged that much as his company would continue to cooperate with government and authorities in the regulation of the cement industry, it would ensure the price is not hijacked by profiteers.

It would be recalled that SON in the wake of the building collapses across the country and the attendant controversies on the quality of cement being produced in the country summoned the meeting of a stakeholders in the building and construction industry.

The meeting undertook a review of standard of quality of cement and came out with a classification of cement types and their appropriate uses as a means of stemming the suspected misapplication of the product which has contributed to the building collapse menace.

SON in the new classification exercise warned members of the public to adhere strictly to the stipulated application of cement types and save the nation the embarrassment of incessant structure failures.

In the fresh review of standard, the Organisation restricted the use of the 32.5 grade strength to plastering of structures only while 42.5 grade is recommended for the construction of buildings, beams, load bearing columns, pillars, block moulding and other structures and the 52.5 recommended for the construction bigger projects like bridges, flyovers, and high rise buildings.

Edwin said the decision by Dangote Cement to embark on the high quality grade was to help Nigeria stem the tide of collapse building and commended SON for the bold move pointing out that Dangote was ready to support the regulatory body in the onerous task of ridding the nation of structure failures.

He said: “After 28 days, the 32.5 grade gives a strength of 32.5MPA, whereas the 42.5 grade gives a curing of 42.5MPA i.e 30 per cent higher in strength.”

Mr. Edwin said that in spite of the high quality grade of Dangote Cement, it has not increased its price for the product ans would not.

“China, the Number one producer of cement in the world is phasing out the entire 32.5 grade by July. India, the second largest producer of cement phased out 32.5 grade cement 12 years back,” he added.

The Dangote Cement GMD had at a public hearing conducted by the House of Representatives on Cement Quality in Abuja questioned why other manufacturers will be producing high grade cement in their Indian factories while producing low grade cement in Nigeria.

Edwin said before 2004 Nigerian businessmen used to produce and import the high grade cement, 42.5MPA, wondering why the sudden jettisoning of the high quality cement for 32.5 lower grade.

According to him, the phenomenon of collapse building increased astronomically as from 2004 when other manufacturers downgraded their quality to 32.5MPA. It is estimated that from 1974 to 2010, collapse building had claimed 297 lives.

The SON had recently issued a directive that 52.5R be used for bridges, 42.5R should be used for casting of columns, beams, slabs and making blocks, while the low grade 32.5MPA was restricted to plastering.

Speaking also at the Public Hearing, Director General of SON Joseph Ikem Odumodu said the restriction placed on the use of low grade cement is important to mitigate the problem of collapse building in the country.

Contributing, President of the Cement Manufacturers Association of Nigerian (CMAN) Engr Joseph Makoju, said the 42.5 grade is superior cement over 32.5 and that Nigeria used to produce and import 42.5 before the coming of 32.5MPA.