The Dangote Group on Monday acknowledged that about 40 per cent supply gap exits in the country’s cement market.

Group Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin, at a briefing in Lagos said cement manufacturers were working to close the gap.

Edwin said the demand for cement had risen because of rise in construction as investors considered the industry good to hedge against falling local currency.

He asserted that although the company had not increased its ex-depot price, some retailers had taken advantage of the supply gap to increase their price because they could not get supplies as required.

Edwin said Dangote Cement and other manufacturers had commenced measures aimed at closing the supply gap.

The company in a statement also said that it had not increased ex-factory prices of its cement since December 2019 despite increase in production costs.

The company clarified that the price of a cement bag from its factories as of Monday, April 12, was N2,450 in Obajana and Gboko and N2,510 in Ibese, inclusive of VAT.

The clarification was made in view of recent insinuations that the company sold cement in Nigeria at significantly higher prices relative to other countries, particularly Ghana and Zambia

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Edwin said in the statement that while a bag of cement sold for an equivalent of $5.1, including VAT, in Nigeria, it sold for $7.2 in Ghana and $5.95 in Zambia ex-factory, inclusive of all taxes.

He said it was important to distinguish Dangote’s ex-factory prices from prices at which retailers sold cement in the market, noting that the company had no control over the prices charged by other cement manufacturers or the prices charged by retailers.

Edwin further explained that over the past 15 months, DCP’s production costs had gone up significantly as about 50 per cent of its costs were linked to the dollar.

According to him, the devaluation of Naira and VAT increase had led to an increase in cost of critical components such as gas, gypsum, bags, and spare parts.