Cement manufacturers have warned that if the naira is further devalued, the price of cement would be further increased.
Cement manufacturers need substantial amount of forex to pay expatriates, buy diesel, spare parts and mining machinery. It has also been disclosed that it is easier to import gypsum than to use local gypsum because of the poor quality and high price of local gypsum.
Addressing shareholders at the 37th Annual General Meeting (AGM) of the Cement Company of Northern Nigeria (CCNN) in Abuja yesterday, the Chairman of the company Alhaji Abdulsamad Rabiu, said “times are tough and difficult, and the availability of forex is a big problem. If the naira devalues further, the cost of anything that is imported will go up. Hanging in there to remain in business.”
Defending the recent increase in the price of cement to N2,000, Abdulsamad Rabiu said CCNN will continue with production and make a little bit of money even if it is not much, to keep running. He told shareholders that a competitor has posted N30 billion loss for this year.
Rabiu tied the increase in the price of cement to what he called “the cost of energy doubling.” Describing the current economic environment as dire, Rabiu said the cost of procuring LPFO, diesel, fuel and other consumables have gone up because of the difficulty in accessing forex.
He said: “The situation is dire, but going forward, we pray it gets better. Forex now is for oil production. The price of oil that has come down is also affecting forex and without forex it is not easy to do business. CCNN will continue to do its best, shareholders should be patient as the company is making efforts to access coal which is cheaper. The price of cement has not gone up as it should have been. It could have been worse at N2,000/bag. The price of cement in Nigeria compared to surrounding countries is reasonable.”
The CCNN chairman said “LPFO which is the main energy used by the company has not been supplied by the Kaduna Refinery since August 2014, hence it has to rely on other sources, mostly importers as supply from other refineries is also epileptic. The company had to, at intermittent periods during the last quarter of 2015, shut down plant due to scarcity and cost of energy.
“There is quite a lot of talk on providing forex for manufacturers and assisting them with forex involving the CBN. But we are waiting for modalities on the planned initiative to make forex easily accessible to manufacturers, a lot of manufacturers are suffering and it is not an easy situation at all” he said.
