The management of Dangote Cement Plc (DANGCEM) has announced a N600 increase in the price per bag of its 50kg cement. The primary reason sighted by the company for the latest price hike is familiar, which includes substantial cost inflation, significant energy cost increase owing to unfavourable mix and significant Nigerian government devaluation against the USD dollar.
While the gas supply shortage that have badly affected energy mix is understandably beyond management control, market watcher argue that the price cut in September last year clearly underestimated the magnitude of negative impact forex supply shortages would have on businesses and the Nigerian economy in 2016.
Besides price increase, the company statement reads that the installation of coal mills and mining initiative has accelerated, and that own coal mining is now expected to commence in November in Kogi State. Management had earlier guided to 100 percent use of owned mined coal which is the cheapest among the fuel sources cross facilities by fourth of 2016.