Kano Dealers Fault Dangote Cement Price Cut

Cement distributors under the auspices of Association of Cement Traders (ACT) in Kano State yesterday expressed discomfort with the new Dangote Cement Plc’s (DCP) price regime announced last weekend, insisting that the N1, 000 per bag policy is unrealistic.

Dangote Cement Plc, a subsidiary of the Dangote Group of Companies owned by multi millionaire Alhaji Aliko Dangote, slashed the market price of its cement that saw its 32.5 cement grade reduced to N1, 000 per 50 kilogram (kg) bag, while the higher 42.5 grade would now sell for N1, 150 per bag.

The new prices regime according to Dangote Cement is exclusive of the Value Added Tax (VAT), representing about 40 per cent discount on the prevailing market price of the product, which is currently sold for N1, 700 irrespective of the grade, across the country.

Dangote Cement company had explained that the decision was in line with the company’s commitment to the nation’s dire need for the development of infrastructure and to boost the federal and state government’s ongoing effort to reduce the near 20 million housing deficit in Africa’s largest economy.

However, the Vice Chairman of the ACT in Kano, Alhaji Dauda Bakare said Dangote’s decision did not take into account of its dealers and distributors who may have stocked large quantity before taking such a decision.

Dauda explained that, “how do you expect the distributors to sell for N1, 000 when we bought for N1, 385 direct from factory at Obajana and that is without transport. When you add transport you will have it at N1, 635 and we sell for N1, 750 per bag. So, how do you reconcile this? Who will bear the loss?

Dauda, who revealed traders dissatisfaction with the new price, contended that Dangote was insensitive to numerous dealers with large quantity of products in stock, who might be forced out of the business with huge loss when the price take effect.

“Of course the new price as announced by Dangote is a welcome development especially to people on the street but on the other hand the decision to crash cement price by Dangote without due consultation with the dealers and distributors for proper assessment of the situation on ground is not appropriate.

“For distributors who have like 10 trucks in stock, how do you want them to sell or do you think customers will still purchase the products from them at the old price. Honestly we don’t know what to do. Everybody here is confused ever since the announcement was made. But of course it is a welcome development for common man because people will be able to afford the product at lower cost and build their houses, but as it is for now it is not possible to sale at N1, 000 when we buy for more than N1, 000 from factory excluding VAT, transport and we must also make profit as a businessman.

The cement traders therefore demanded for palliative measures from Dangote or the company extend the commencement of the new price regime to enable them exhaust the products in stock or the company will compensate the dealers to augment potential loss.