Despite the launch of BUA’s 3 million metric tons cement plant in January, and the increase in revenue of the major cement manufacturers in the country, the price of cement per bag has continued to hover above N4,000.
The product’s contribution to the Nigerian economy stood at N2.7trn in the first half of 2022, a report by the National Bureau of Statistics (NBS) has revealed.
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The figure for H1 2022 performed better than that of H1 2021 which was valued at N2.4trn
The three cement manufacturing companies on the Nigerian Exchange Limited (NGX) have announced N1.18 trillion in revenue, translating to N270.9 billion total profit growth in the half year (H1) ended June 30, 2022.
A breakdown of the H1 unaudited results showed that revenue grew by 23.3 per cent to N1.18 trillion from N959.84 billion reported in half year ended June 30, 2021.
With about 14,206,000 tons’ sales volume in H1 2022 from 15,277,000 tons reported in H1 2021, Dangote Cement maintained lead in revenue generation, followed by BUA Cement and Lafarge Africa Plc.
Dangote Cement reported N808.04 billion revenue in H1 2022, representing an increase of 17 per cent from N690.5 billion earned in H1 2021.
On its part, BUA Cement recorded revenue of N188.56 billion in H1 2022, representing an increase of 51.7 per cent over N124.3 billion reported in H1 2021.
Also, Lafarge Africa announced N186.6 billion revenue in H1 2022 from N146.02 billion recorded in H1 2021, representing an increase of 29 per cent.
Analysts explained that a marginal increase in prices of cement this year impacted positively on revenue that eventually boosted profit.
They however contended that the mounting cost of production due to inflationary pressure, among others, reduced profit, leading to a decline in profit declared by Dangote Cement.
Specifically, Dangote Cement reported 16.8 per cent increase in cost of sales to N322.46 billion in H1 2022 from N276.12 billion in H1 2021, driven primarily by 31.3 per cent hike in fuel & power consumed that closed H1 2022 at N129.96 billion from N98.98 billion in H1 2021.
For BUA Cement, its production cost rose by 47.4 per cent to N97.5 billion in H1 2022 from N66.16 billion in H1 2021.
Lafarge Africa announced N90.52 billion in production cost of sales in H1 2022, representing an increase of 25 per cent from N72.54 billion reported in H1 2021.
As a result of increase in production cost and financial expenses, Dangote Cement closed H1 2022 with a profit of N172.1 billion, representing a decline of 10.2 per cent from N191.63 billion in H1 2021.
Contrarily, BUA Cement grew its profit by 41.4 per cent to N61.36billion in H1 2022 from N43.4 billion in H1 2021, while Lafarge Africa announced N37.4 billion profit in H1 2022 from N28.32 billion reported in H1 2021.
The Chief Executive Officer of Dangote Cement, Michel Puchercos, in a statement explained that significant increases in energy and Automotive Gas Oil (diesel) are impacting negatively on the production and supply of cement products.
Despite these growths, Daily Trust reports indicate that prices remain at over N4,000 at the retail end.
This rise has not allowed Nigerians to enjoy the benefit of local production as experts estimate that Nigerians pay 240 per cent above the global average for the commodity.
This has led to lawmakers in the Senate calling for a relaxation of licensing restrictions to create the competition needed to drive down prices.
The lawmakers had warned that the high prices have a negative impact on the Nigerian economy, which is grappling with double-digit inflation and a shrinking labour market.
They contended that the increase has also slowed the number of construction works in the country as the industry is grappling with the high cost of cement which is crippling economic activities.
Similarly, the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele, has tasked manufacturers on the need to address the rising prices of building materials, including cement.
Emefiele, speaking at the commissioning of BUA’s cement plant, said Nigerians have been lamenting the soaring price of cement and that manufacturers must first satisfy the local market before exporting the product to external markets.
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