Nigeria’s cement industry, where the laws of demand and supply come to die.
Installed capacity across the 3 major producers (Dangote, BUA, HBM) = 62.75 million tonnes annually.
Estimated domestic consumption = 30million tonnes annually.
That’s installed capacity at 2-2.5x the domestic consumption. (Could be as high as 3.5x when HBM and Dangote completes their expansion).
Yet, excess capacity has not produced the downward price pressure one would ordinarily expect.
The Nigerian cement prices at roughly 2.16x the midpoint average across Ghana, Kenya, South Africa and Egypt.
EXW cement price in Nigeria (N8500 per bag).
EXW— the base cost of cement at the factory gate or manufacturer's warehouse, excluding all transport, loading, and tax costs.
So here is the question:
If we have more than enough installed capacity to supply our domestic market, why are Nigerians still paying so much for cement?
Energy? Logistics? FX? Distribution margins? Market concentration? Pricing power? Is there something else?
I have always loved King Sunny Ade from my teenage years. I remember listening to his music on those old black records—similar to discs, but bigger. Those records were part of my growing up years.
As I grew older, my love for KSA’s music only grew stronger. His sound, style and timeless artistry have remained special to me.
This is one of my all time favourites.
#fypシ゚viral #reelsviral @AyoOguntade@Ayodele10824524@ToBiLeez@oMoTonsore
A most thoughtful thing KSA did at his 1984 Tokyo concert was to raise awareness about the Ethiopian drought crisis--slow-playing the already solemn 'Motimọ.' Band Aid's 'Do They Know it's Christmas' and USA for Africa's 'We are the World' were recorded a couple of months later.