The price of cement that recently hit all-time high of between N2,700 and N3,000 was
the handiwork of a cabal that was interested in making undue profits from the locally-made variety of the commodity, Sunday Tribune has learnt. Although the Federal Government has already issued a deadline within which the price of cement must come down, failure of that directive to have potency might spell doom for the Federal Government Housing Policy.
A cement manufacturer who is also the chairman, Cement New Entrants Forum, Prince David Iweta, disclosed this to Sunday
Tribune at the weekend, while speaking about the growing concern among the masses over their inability to buy the commodity.
Iweta disclosed that a particular cabal had, last year, hoodwinked the Federal Government into increasing the duty and levy on imported bulk cement from five to 15 per cent and introducing a certain Cement Technology Levy (CTL) of 20 per cent, adding that this caused the total levy on imported bulk cement to 35 per cent.
He said unknown to the Federal Government, the target of this cabal, members of which are major players in the cement industry as well as local manufacturers, was up the price of imported cement and surreptitiously increase that of locally-produced ones too so as to swindle unsuspecting consumers.
“I warned on this outcome when the Ministry of Commerce and Industry, in collaboration with the Ministry of Finance, recommended to the President to approve an upward review of duty on imported bulk cement from five per cent to 15 per cent and further introduce Cement Technology Levy (CTL) of 20 per cent; this made the duty and levy to go up to 35 per cent.
“This happened late last year and the effect came up this year. This is supposed to affect imported bulk cement only and not locally manufactured cement. The game plan by the cabal was to enable them to cash in on the increase on imported cement to hike the price of their locally-manufactured cement; to equate it to the cost of imported cement at N1, 700 at the factory gates of local cement manufacturers. “This would also enable them to make abnormal profit to enable them to pay off their bank loans within two to three years as against long-term repayment of capital project funds of 10 to 15 years,” he said.
The industrialist added that Nigerians should not listen to some stakeholders in the cement industry who attributed the exorbitant hike in the commodity’s price to problems of Low Power Fuel Oil (LPFO) from the Kaduna Refinery and the price of diesel that had gone up to about N140 per litre, disclosing further that the Federal Government had, long ago, approved exclusive importation of LPFO, with special duty concession, to cement manufacturers.
“They should not cite the problems of Low Power Fuel Oil (LPFO) from Kaduna Refinery and price of diesel at N140 per litre as reasons for sharp increase in price of cement. The Federal Government had long approved the exclusive importation of petroleum products, particularly LPFO, with special duty concessions for cement manufacturers. They should stop passing the buck over possible inability to bring cement price down to N1, 000 by local manufacturer before the 30-day deadline.
“I want to state here that with the deceitful plot by the so-called cement manufacturers and the fake figure given for local capacity in cement production, the Federal Government will not achieve 10 per cent of its programme of housing for all.
“Therefore, I make bold to say that such programme will end in futility, except the Federal Government makes deliberate efforts to discard the tissue of lies and misleading information coming from the so-called cement manufacturers.
“Our own association was empowered by late President Umaru Yar’Adua, who deemed it necessary to break the monopoly in the cement industry by granting six companies Special Cement Import Permit to crash the price from N2, 500 it was then to between N1, 400 and N1, 600.
“It remained at these prices before the appointment of the minister, who aided the cabal in what led to the current high price being experienced in the country. It was the good effort of the late president that supported many cement stakeholders who had been denied access to Cement Import Permit from 2002 when the cabal came into force in Nigeria and was supported by the government in power from 1999 to 2007. Therefore, our presence created fear in the minds of the cabal as price became stabilised and came as low as N1 400 per 50 kilogramme bag,” Iweta explained.
He, however, said there was hope that situation would come to normal, if government could reverse levies on imported bulk cement to five percent and approve the licence of some cement companies which applications were currently with the Ministry of Commerce and Industry, adding that it was even possible for Nigerians to buy cement for as low as N700, as obtained, according to him, in countries like China, Liberia and Turkey.
“The Federal Government’s directive that the price of cement must come down to N1, 000 per bag is very possible, particularly for locally-produced cement, while imported cement could be around N1, 400 per bag, if the duty remains at five per cent on bulk cement. The claim by cement manufacturers that price of LPFO and diesel for transporting cement from their factories to consumers is responsible for price hike is a bundle of lies.
“What is the price of diesel in China? What is the cost of diesel in Liberia? What is the price of diesel in Turkey? What is the price of cement in these countries? It ranges from equivalent of N500 to N700 per bag from their local plants. “Therefore, the so-called cement manufacturers have no business selling locally-manufactured cement above N700 per 50 kilogramme bag. I stand to be challenged and I am ready, willing and able to defend this position. There are facts and figures to support my position. The cement manufacturers are robbing Nigerians by over 100 per cent.
“To prove my case, only a few days ago, a member of the Cement Manufacturers Association declared financial statement for a three-month period and there was a gross profit of over 60 per cent as well as a 51 per cent net profit. Let the economic advisers to the president analyse this account and come up with a report on whether or not this is good for the country.
“There is nowhere in the world today where this kind of profit is recorded and even from a product over which the masses are crying of high price. It has taken government a very long time to issue this directive because the cabal, with the aid of the ministry, has continuously told the public and the president that the country has attained self-sufficiency in local cement manufacturing and will start exporting by 2011 to African countries; these are in all national dailies and are lies.”
tribune.com.ng/sun/index.php/front-page-articles/3967-cement-shouldt-cost-more-than-n700-manufacturer-exposes-cabal-behind-price-hike
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