From Ayodele Samuel, Lagos
Cement price in Nigeria is still selling at 300 per cent above what same product is selling in countries like Egypt, China, Taiwan, India, Japan, Norway, Turkey, Indonesian, Pakistan, Iran, Iraq where self sufficiency in cement production has been attained.
In a protest letter addressed to President Goodluck Jonathan, the President, Cement Producers Association of Nigeria (CPAN), who is also a member of Nigeria Chambers of Commerce, Industry, Mines and Association (NACCIMA), Mr David Iweta, said the price of cement in countries that has attained sufficiency in cement production, like Nigeria, is N500.00 per 50kg bag, while cement in Nigeria is still selling at 300 per cent above what same product is selling in other countries. He said a local manufacturer has constantly declared Annual Profit After Tax (APAT) in the region of N120billion –N130billion for over three years running.
Iweta said the international best practice for cement manufacturing is for investors to earn IRR (internal rate of return) in region of 25 per cent, but experience has revealed that Nigerian cement investors
are earning over 150 per cent IRR in cement investment such that investors recoup their investment within two years of their investment.
“By this token, all such local manufactures claiming large investment have since recovered their investments. It is regrettable that the price of the product is hovering within N1, 800 – N2, 000 per bag. We strongly recommend that Mr. President should revisit this strategy by allowing unexhausted licenses to be fully utilized and consider granting more licenses and abolish the introduced levy of 20 per cent with 15 per cent duty but retain the five per cent duty and five per cent vat on imported cement.
“This will force the local cement manufacturers that are hiding under the high cost of imported cement which attract 45 per cent extra cost comprising duty, levy, NPA, NIMASA , in addition to cost of freight in region of$50.00 per metric tone. The total extra cost paid on imported cement is in the region of N 900.00. Per bag. Imported cement will sell for N1,000 per 50kg bag if the Federal Government retain duty and vat at five per cent each on imported cement.
“The local manufacturers are still at a better position to make N500.00 profit per bag owing the fact that they make use of free local limestone and could sell cement for N500.00 per 50kg bag,” Iweta said.
Iweta said the housing deficit in Nigeria is estimated at 17million, adding that housing like agriculture is a major provider of labour in many economies.
He said if the Federal Government is committed to filling the gap in the housing sector, this sector alone is capable of providing employment for 34million Nigerian.
“ Mr. president should seek the co-operation and support of the National Assembly to save Nigeria from the hands of these CABAL parading themselves in the name of Cement Manufacturers Association of
Nigeria (CMAN) particularly if the government is determined to provide 17million homes to create employment for 34million Nigerians.
“The road block that will make this project and target to fail is the ever rising price of cement in Nigeria which is claimed to have attained self sufficiency in cement production yet Nigeria is classified as country with the highest price of cement in the world,” he said.
