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Nairaland Forum / Nairaland / General / Business / Dangote Cement Prices 17% Cheaper Than Global Average Data Shows (447 Views)
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Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by MCentral: 11:30pm On Aug 29, 2023 |
![]() The sales price of Dangote Cement is 17.22% cheaper on average when compared to prices set by global cement manufacturing giants from Cemex of Mexico to Holcim in Europe, research by MoneyCentral shows. The data suggests any opening up of borders to importation will not lead to lower prices but would decimate local manufacturing jobs. MoneyCentral looked at financial data from six of the world’s largest cement manufacturers from 5 continents: including Cemex of Mexico/USA, Dangote Cement of Nigeria, Holcim Ltd based in Europe, Anhui Conch of China, Votorantim Cimentos of Brasil and UltraTech Cement Limited India. It showed an average sales price during 2022 for cement of $90.61 per metric ton for the group. This compares with Dangote Cement which sold its cement 17.22% cheaper at an average of $75 per metric ton (see chart). However when compared to global cement manufacturing peers, Dangote Cement is at a disadvantage in nearly all metrics that is vital to profitable cement manufacturing, including finance costs, inflation, cement volumes and sales price. The only major advantage MoneyCentral saw for Dangote Cement was lower energy costs and efficiency of cement plants due to its investment in newer and more energy efficient plants across Africa. Some of the global peers such as Holcim have domestic subsidiaries in Dangote Cements operating locations, meaning the subsidiaries can tap the expertise, cheaper source of capital, of their global parent company, all while being in direct competition with Dangote Cement, a luxury Dangote Cement does not have. Our thesis is simple: opening the floodgates of cement importation will not lower Nigeria Cement prices as the major global cement manufacturers currently sell their products at a price point higher than Dangote Cement. It is however, more likely that given additional costs of shipping, port handling, demurrage, naira devaluation and haulage from ports on the coast to the hinterlands, prices will rise steeply just as we currently see with petrol, another fully imported commodity. However there would be lost jobs, lower taxes for the Federal Government (FG), negative impact on the domestic stock market, less innovation and lost manufacturing activity in the country if unbridled importation were to occur. ![]() Source: MoneyCentral Research, Company Financials Cemex (Mexico, USA) Cemex average sales price for cement during 2022 was $114.30 per metric ton. For the year ended December 31, 2022, Cemex had net sales of $15.6 billion, which were higher than those for the year ended December 31, 2021, mainly driven by price increases across its products and services in all of the regions where it operated from. During 2022, Cemex pricing and cost mitigation efforts were able to offset much of the impact of inflation. “As of December 31, 2022, 77% of our total debt plus other financial obligations was Dollar denominated, 13% was Euro-denominated, 2% was Pound Sterling-denominated, 5% was Mexican Peso denominated, 2% was Philippine Peso-denominated and 1% was denominated in other currencies,” Cemex said in its financials. Chief Financial Officer Maher Al-Haffar said the company would keep pushing forward with price increases in 2023. “More than 80% of our volume is being repriced in the early part of the year and we think there is very good traction,” Al-Haffar said in a call with analysts earlier in the year. Takeaway: Cemex raised prices in 2022, to mitigate impact of inflation and will continue to raise prices this year. Dangote Cement also can’t afford cheaper USD financing like Cemex due to extreme volatility of Naira vs dollar, such mismatch is risky because it will need to service dollar debt with revenues generated in Naira which becomes much more expensive in the event of a devaluation. Cemex sold 63.4 million metric tons of cement in 2022. Dangote Cement (Nigeria, Africa) Dangote Cement’s average sales price for cement during 2022 was $75.5 per metric ton. In 2022, Ethiopia one of Dangote Cements geographic locations of operations showed characteristics which indicates the existence of hyperinflation. Dangote Industries (Ethiopia) Plc is one of the subsidiaries of Dangote Cement Plc and accounts for ₦103.3 billion (6%), ₦33.3 billion (6%) and ₦270.6 billion (10%) of the Group’s revenue, profit before tax and total assets respectively. Takeaway: Dangote Cement deals with high inflation not just in Nigeria but in rest of Africa The only variable it controls is efficiency as macro variables such as inflation, interest rates, energy costs, and even pricing (due to competition) is largely outside its control. Cost of sales as a percentage of revenue is lowest for Dangote Cement due to massive investment in brand new plants across Africa (see chart). However, the firm has one of the lowest prices, combined with the highest inflation and finance costs among the peers. Average sales price during 2022 for Dangote cement was N58,282 per metric ton or $75.5 per metric ton, when using the most recent I&E rate of N772/$. Dangote Cement sold 27.76 million metric tons of cement in 2022. Holcim (Switzerland, Europe) Holcim average sales price for cement during 2022 was $96.87 per metric ton. The harmonised index of consumer prices (HICP) rose to 9.2% in 2022 for the EU, compared to 2021’s annual value of 2.9%. The EU Innovation Fund granted Holcim two awards for carbon capture projects in Germany and Poland, for a total of EUR 328 million. Net sales reached a record CHF 29,189 million for the full year of 2022, up by 12.9 percent on.... https://moneycentral.com.ng/markets/article/dangote-cement-prices-17-cheaper-than-global-average-data-shows/ |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by TheMensch(m): 11:34pm On Aug 29, 2023 |
Any write-up that is too long and clumsy mostly ends up being lies ![]() 2 Likes |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by DeLaRue: 11:56pm On Aug 29, 2023 |
The key data here is the 'cost of sale/revenue' which shows that of all the companies, Dangote makes the most profit per unit/bag of cement. With a cost of sale/revenue of only 41%, Dangote makes double the profit of Ultratech Cement of India per bag of cement ![]() ![]() Based on Dangote's current factory price, it means Dangote's total cost to manufacture each bag is around N2,000. Anything above that is gross profit. So, the company can reduce price per bag substantially and still make good profit. My opinions are based on my amateur understanding of what 'cost of sale/revenue' means. Any accountant reading can correct me. While the narrative being pushed by the publication is that Dangote 's price is cheaper in absolute terms than some foreign companies may be correct, such comparison is hiding the truth as the companies operate in different economies. The most relevant comparison is that Dangote makes far more profit per bag than any of the other companies. 2 Likes |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by Dreal1247: 12:16am On Aug 30, 2023 |
Story for the dogs. Damage control. Dangote is a major problem to the economic development of this country. The so-called refinery that he is building is with Nigeria money and not his personal money. Don't be surprised that he is one of the reasons why the modular refineries are not yet working. 1 Like |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by Dreal1247: 12:18am On Aug 30, 2023 |
Cement - prices by country, around the world, September 2023 Select indicator Based on 22 countries included in our data base, the average price is 0.23 USD. Looking at the latest data, the lowest price was 0.08 USD (Saudi Arabia) and the highest price was 0.40 USD (United Kingdom). (USD / 1 kg, Definitions, sources and data download)  Countries Cement prices, 1 kg Rank UK 0.40 1 Canada 0.39 2 USA 0.39 3 Australia 0.34 4 Netherlands 0.32 5 Mexico 0.29 6 South Korea 0.28 7 Sweden 0.28 8 Belgium 0.27 9 Italy 0.25 10 Switzerland 0.25 11 France 0.24 12 Germany 0.23 13 Spain 0.22 14 China 0.21 15 Japan 0.15 16 Poland 0.15 17 Brazil 0.12 18 India 0.09 19 Indonesia 0.09 20 Saudi Arabia 0.08 21 Russia 0.08 22 Definitions, sources and data download  Definitions, sources and data download UK Canada USA Australia Netherlands Mexico South Korea Sweden Belgium Italy Switzerland France Germany Spain China Japan Poland Brazil India Indonesia Saudi Arabia Russia 0.400.390.390.340.320.290.280.280.270.250.250.240.230.220.210.150.150.120.090.090.080.0800.20.4  Definition: The prices are for 1 kilogram of grey cement: Portland type cement which is the most common type, suitable for preparing concrete and mortar. The prices are collected from the largest hardware stores for each country. Cement is packed in bags with weight between 20 – 50 kg. ContactsAboutPrivacy policy www.GlobalProductPrices.com is licensed under a  Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License Copyright 2023 This site uses cookies. Learn more here PLEASE DO THE CALCULATION BY YOURSELF. 1 Like |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by Sirianese: 1:08am On Aug 30, 2023 |
MCentral: The same volatile (weak) naira you complain about makes Dangote to have cheaper operational and labour costs in Nigeria than in any other of those locations compared. As such you cannot use absolute market price to benchmark against their prices in all those other countries |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by Ohislee(m): 2:33am On Aug 30, 2023 |
This people like to be clever by half. Why not bench mark with the average price in Africa. Complaints by Nigerians is that the cost of cement in Nigeria is high compared to the cost in neighboring countries. 1 Like |
Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by mrvitalis(m): 4:49am On Aug 30, 2023 |
MCentral:
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Re: Dangote Cement Prices 17% Cheaper Than Global Average Data Shows by Nbote(m): 6:37am On Aug 30, 2023 |
Whenever you people want to cook up lies to sell to Nigerians, you start making baseless comparisons with other parts of the world but you won't make compare other economic factors and indices or compare infrastructure Nd other living conditions.. Nonsense |
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