Manufacturers of cement, builders’ most common material have warned that if the Naira is further devalued, the price of cement will be increased further because they need a substantial amount of forex to pay expatriates, buy diesel, fuel, spare parts and mining machinery.
This was disclosed by Alhaji Abdulsamad Rabiu, Chairman of the Cement Company of Northern Nigeria (CCNN), in Abuja, at the 37th Annual General Meeting (AGM) of the company as the board approved the payment of a gross dividend of 10k per share, compared to last year’s 35k per share.
“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.
“CCNN will continue with production and make a little bit of money even if it is not much, to keep running. In fact, a competitor has posted N30 billion loss for this year.
“The cost of energy is doubling and the current economic environment is dire. The costs of procuring LPFO, diesel, fuel etc have gone up because of the difficulty in accessing forex.
“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.
“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.
“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 and a profit after tax of N1,201,108,049 compared to N1,918,361,854 in 2014.