Cement
manufacturers have warned that if the Naira is further devalued, the price of
cement will be increased further.
Cement
manufacturers need a substantial amount of forex to pay expatriates, buy
diesel, fuel, 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.
Abdulsamad
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,
Abdulsamad Rabiu said the cost of procuring LPFO, diesel, fuel etc, have gone
up because of the difficulty in accessing forex.
According to
him, “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 revealed that “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 was
also epileptic. The company had to, at intermittent periods during the last
quarter of 2015, shut down the plant due to scarcity and cost of energy.”
He also
disclosed that “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.
During the
year, the company recorded a turnover of N13,037,847,294 compared to
N15,119,050,874 in 2014. The profit after tax was N1,201,108,049 compared to
N1,918,361,854 in 2014. Weak demand for cement particularly in the second half
of the year, mainly contributed to the low turnover and lower profits compared
to 2014.
The board
approved the payment of a gross dividend of 10k per share, compared to last
year’s 35k per share. THENATIONONLINENG
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