Dangote drives innovation into Nigeria’s cement space - CNBC Africa

Dangote drives innovation into Nigeria’s cement space

Western Africa

by Dara Rhodes 0

Dangote will sell the 52.5 grade for the same amount of the 42.5 grade. Photo: Cement.

Many believe that the numerous building collapses Nigeria has experienced is due to the popular lower grade cement in the market.

“It’s not an issue of the quality, it’s a case where you have builders or contractors who use for example, 42.5 grade of cement made for lightweight projects to carry out high weight construction project,” Oyinda Olarewaju, SSA Cement Analyst at Renaissance Capital told CNBC Africa.

Dangote Cement announced the achievement of its factories across the country to produce 52.5 grade making it the first on the continent to do so.

“The government needs to find a way to ensure that the stakeholders in the industry understand the different grades of cement, understand how to use it in terms of the ratios they add and they use the right grade of cement for the right project,” she said.

Dangote announced that they currently only produce 42.5 grade of cement when stakeholders had threatened to stage protests against manufacturing the lower grades.

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“I think innovation is definitely something we would see in the market because for a product like cement which is highly homogenous, you are going to need to constantly have some innovation to add value to your consumers so bringing in the 52.5 grade is good.”

Nonetheless, Olarenwaju added that before it was banned, Lafarge cement imported the 52.5 grade cement.

“They were the only ones who used to import it then, but now I guess it’s different with Dangote because they are actually manufacturing it as opposed to importing it and bagging it, so that’s the difference but it’s something that is creating a leeway to carve out a niche to make cement for higher weight or heavy weight projects,” she explained.

Despite the extra costs that producing the higher grade cement may procure for Dangote Cement, the company also announced that it will be sold for the same amount as the 42.5 grade.

“I think the cost is largely marginal which is why I think it will be easier for a low cost producer like Dangote Cement to maintain their costs across the different grades of cements,” she added.

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