Despite the proximity of plants to Lagos, cement costs are skyrocketing in response to a recent price increase by manufacturers.
While producers have blamed the increase on the high exchange rate, the cost of spare parts, and other logistics, builders and other prospective homeowners are concerned that they are not benefiting from proximity to raw materials and the market.
According to news reports, the haulage distance of cement products from Dangote's Ibeshe cement factory is approximately 34 kilometres, and the distance from Lafarge's Ewekoro and Sagamu cement plants is approximately 68.5 and 67.3 kilometres, respectively.
Despite the proximity of plants to Lagos, cement costs are skyrocketing in response to a recent price increase by manufacturers.
While producers have blamed the increase on the high exchange rate, the cost of spare parts, and other logistics, builders and other prospective homeowners are concerned that they are not benefiting from proximity to raw materials and the market.
According to news reports, the haulage distance of cement products from Dangote's Ibeshe cement factory is approximately 34 kilometres, and the distance from Lafarge's Ewekoro and Sagamu cement plants is approximately 68.5 and 67.3 kilometres, respectively.
"We are boosting capacity from roughly 50,000 tons a day at the beginning of the year to 70,000 tons a day towards the end of the year," said Edwin Devakumar, Group Executive Director, Strategy, Portfolio Development, and Capital Projects, Dangote Industries Limited.
"All other producers in the market can sell at their pricing," Devakumar said, adding that there is no price-fixing in the Nigerian market.
He stated that growing demand, higher diesel prices, and an unstable supply of the gas needed to power manufacturing plants are all contributing factors to rising pricing.
Due to port congestion that has caused longer truck turnaround times, transportation costs for shipping cement have increased.
According to experts, Lagos is the metropolis in Sub-Saharan Africa with the fastest rate of population growth, which puts pressure on cement and other building supplies.
Olufemi Shodunke, an architect, claims that cement is in high demand because of the phenomenal growth of both cities' construction industries.
"You are going to see such price surges when demand exceeds supply," Shodunke added.
He attributed the price increase to middlemen who want to make more money and producers raising prices.
Transportation shouldn't be a consideration when delivering cement to Lagos, according to Mr Debo Adejana, vice president of the Southwest zone of the Real Estate Developers Association of Nigeria REDAN.
Given that their returns are reflected in the makers' declared profits, he claimed that the price shouldn't be so expensive.
Adejana claimed that small private developers, who greatly contribute to the increase in the housing supply, find it difficult to do since it has an impact on the price of homes, except for large developers who could purchase in bulk.
He stated that private developers want to work with cement producers to find ways to make it more inexpensive for their members, and he added that they won't give up until it's done.
There is more demand for expected lower cement costs in Lagos and Kano than in any other city in Nigeria, according to Mr Kunle Awobodu, the immediate past president of the Nigerian Institute of Building NIOB.
However, he said that some of the areas' poor roads are undermining hopes that Lagos would gain from the proximity of cement companies in Ibeshe, Ewekoro, and Sagamu.
Nigeria's indigenous cement manufacturing capacity is now anticipated to rise to 60 million tonnes per year mtpa by 2022.
Three large companies dominate the cement market, with Dangote Cement Plc holding the majority 60.6% of the market share and having a 29.3 million MT installed capacity locally.
With a 10.5 million MT production capacity, Lafarge Africa Plc holds a 21.8% share, and BUA Group holds a 17.6% share.
With operations in ten African nations, revenues over $2.5 billion, and a production capacity of up to 48.6 million tonnes per annum MTA for all of Africa as of 2020, Dangote Cement is specifically the continent's largest cement maker.
With a capacity of 10.25 million tonnes per year across three lines and an additional three million tonnes per year capacity now being built, the Dangote Cement facility in Obajana, Kogi, is the biggest in sub-Saharan Africa.
The company inaugurated a $1 billion cement facility in Ibese, Ogun, in 2012. The factory can produce six million metric tonnes of cement annually, increasing current firm production by 40%.
The facility owned by the firm at Gboko, Benue, has a three million ton capacity with an increase to a four million ton capacity.
The company inaugurated a $1 billion cement facility in Ibese, Ogun, in 2012. The factory can produce six million metric tonnes of cement annually, increasing current firm production by 40%.
The facility owned by the firm at Gboko, Benue, has a three million ton capacity with an increase to a four million ton capacity.
Lafarge Africa Plc currently has an installed cement production capacity of 10.5MTPA with plants at Ewekoro and Sagamu in the South West, Mfamosing in the South-South, and Ashaka in the North East of Nigeria. Lafarge Africa Plc has plans to expand shortly.
Three additional three million tons per year cement facilities are being planned by BUA Cement in the states of Edo, Sokoto, and Adamawa. By the end of 2022, the projects are expected to be finished. Once finished, this will increase the capacity of BUA Cement to 20 million metric tonnes.
The three new plants are in addition to the 6mmtpa facility in Edo, the 2mmtpa plant in Sokoto, and the additional 3mmtpa plant in Sokoto currently operating for BUA Cement.
While producers have blamed the increase on the high exchange rate, the cost of spare parts, and other logistics, builders and other prospective homeowners are concerned that they are not benefiting from proximity to raw materials and the market.
According to news reports, the haulage distance of cement products from Dangote's Ibeshe cement factory is approximately 34 kilometres, and the distance from Lafarge's Ewekoro and Sagamu cement plants is approximately 68.5 and 67.3 kilometres, respectively.
Despite the proximity of plants to Lagos, cement costs are skyrocketing in response to a recent price increase by manufacturers.
While producers have blamed the increase on the high exchange rate, the cost of spare parts, and other logistics, builders and other prospective homeowners are concerned that they are not benefiting from proximity to raw materials and the market.
According to news reports, the haulage distance of cement products from Dangote's Ibeshe cement factory is approximately 34 kilometres, and the distance from Lafarge's Ewekoro and Sagamu cement plants is approximately 68.5 and 67.3 kilometres, respectively.
"We are boosting capacity from roughly 50,000 tons a day at the beginning of the year to 70,000 tons a day towards the end of the year," said Edwin Devakumar, Group Executive Director, Strategy, Portfolio Development, and Capital Projects, Dangote Industries Limited.
"All other producers in the market can sell at their pricing," Devakumar said, adding that there is no price-fixing in the Nigerian market.
He stated that growing demand, higher diesel prices, and an unstable supply of the gas needed to power manufacturing plants are all contributing factors to rising pricing.
Due to port congestion that has caused longer truck turnaround times, transportation costs for shipping cement have increased.
According to experts, Lagos is the metropolis in Sub-Saharan Africa with the fastest rate of population growth, which puts pressure on cement and other building supplies.
Olufemi Shodunke, an architect, claims that cement is in high demand because of the phenomenal growth of both cities' construction industries.
"You are going to see such price surges when demand exceeds supply," Shodunke added.
He attributed the price increase to middlemen who want to make more money and producers raising prices.
Transportation shouldn't be a consideration when delivering cement to Lagos, according to Mr Debo Adejana, vice president of the Southwest zone of the Real Estate Developers Association of Nigeria REDAN.
Given that their returns are reflected in the makers' declared profits, he claimed that the price shouldn't be so expensive.
Adejana claimed that small private developers, who greatly contribute to the increase in the housing supply, find it difficult to do since it has an impact on the price of homes, except for large developers who could purchase in bulk.
He stated that private developers want to work with cement producers to find ways to make it more inexpensive for their members, and he added that they won't give up until it's done.
There is more demand for expected lower cement costs in Lagos and Kano than in any other city in Nigeria, according to Mr Kunle Awobodu, the immediate past president of the Nigerian Institute of Building NIOB.
However, he said that some of the areas' poor roads are undermining hopes that Lagos would gain from the proximity of cement companies in Ibeshe, Ewekoro, and Sagamu.
Nigeria's indigenous cement manufacturing capacity is now anticipated to rise to 60 million tonnes per year mtpa by 2022.
Three large companies dominate the cement market, with Dangote Cement Plc holding the majority 60.6% of the market share and having a 29.3 million MT installed capacity locally.
With a 10.5 million MT production capacity, Lafarge Africa Plc holds a 21.8% share, and BUA Group holds a 17.6% share.
With operations in ten African nations, revenues over $2.5 billion, and a production capacity of up to 48.6 million tonnes per annum MTA for all of Africa as of 2020, Dangote Cement is specifically the continent's largest cement maker.
With a capacity of 10.25 million tonnes per year across three lines and an additional three million tonnes per year capacity now being built, the Dangote Cement facility in Obajana, Kogi, is the biggest in sub-Saharan Africa.
The company inaugurated a $1 billion cement facility in Ibese, Ogun, in 2012. The factory can produce six million metric tonnes of cement annually, increasing current firm production by 40%.
The facility owned by the firm at Gboko, Benue, has a three million ton capacity with an increase to a four million ton capacity.
The company inaugurated a $1 billion cement facility in Ibese, Ogun, in 2012. The factory can produce six million metric tonnes of cement annually, increasing current firm production by 40%.
The facility owned by the firm at Gboko, Benue, has a three million ton capacity with an increase to a four million ton capacity.
Lafarge Africa Plc currently has an installed cement production capacity of 10.5MTPA with plants at Ewekoro and Sagamu in the South West, Mfamosing in the South-South, and Ashaka in the North East of Nigeria. Lafarge Africa Plc has plans to expand shortly.
Three additional three million tons per year cement facilities are being planned by BUA Cement in the states of Edo, Sokoto, and Adamawa. By the end of 2022, the projects are expected to be finished. Once finished, this will increase the capacity of BUA Cement to 20 million metric tonnes.
The three new plants are in addition to the 6mmtpa facility in Edo, the 2mmtpa plant in Sokoto, and the additional 3mmtpa plant in Sokoto currently operating for BUA Cement.
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