Abuja – January 15, 2024 – Viewpoint Housing News.
According to a recent report, the cement sector is expected to perform better in 2024 as a result of the President’s establishment of the Infrastructure Support Fund (ISF), an increase in the infrastructure budget to N1.32 trillion, the active implementation of the African Continental Free Trade Area (AfCFTA), and higher production capacity.
According to a research produced by Cardinal Stone, the Federal Government’s fixation on building concrete roads across the nation might result in a surge in cement prices, which are now N5,500 per 50 kilogramme bag, to N9,000.
It projected that cement makers may favour the delivery of the commodity to government contractors, who will employ the product for concrete building as against unit customers, if the new thinking in government cycle pulled through. The research states that manufacturers’ attempts to balance high operating costs, foreign market volatility, and high inflation will keep cement prices high in 2024.
In response to BUA Cement’s ex-factory price cut, it was stated: “We maintain that average cement prices would remain elevated in the first quarter of 2024 as players aim to protect their margins from rising operating costs occasioned by still-high inflationary pressures and strong volatility in the foreign exchange market, barring a potential price war between players.”
According to a new report titled “Nigeria Cement Rebounding from a Tumultuous Year,” the poorly executed naira redesign in June, which resulted in cash shortages and heavy rainfalls in the third quarter, made last year difficult for the country’s cement industry.
It said that cement prices in 2024 would remain high despite an official slash in prices from BUA cement in October, stressing that the slash remains mere academic paper as the price has refused to climb down.
Cement is a major component in building construction, serving as a binder substance, hardens and adheres to other materials to bind them together.
The Chairman of BUA Group, Abdulsamad Rabiu, had last year announced the intention of his brand to crash cement prices from over N5,000 per bag to N3,500 beginning from October 1. But the price has remained unchanged.
Major retailers have kept on with the old prices ranging from N5, 500 and N5, 700 in major locations even as distributors claim to have old stocks or logistics costs pushing prices up.
According to the report, increased adoption of natural gas in production kilns and distribution vehicles will significantly reduce operational costs for cement producers. This coupled with projected declines in natural gas prices globally will result in ease in cost pressures on cement producers and distributors.
The CardinalStone report also predicted that some of the current distribution cost pressure might ease as players increase the adoption of the relatively cheaper natural gas to AGO, especially for distribution of products.
