Nigeria’s leading cement manufacturer, Dangote Cement has lamented the poor state of power supply in the country after it spent about N196.634 billion in 2021 from N146.342 billion in 2020.
This figure shows that the company spent an additional N50 billion on electricity in 2021 compared to what was spent in 2021.
Nigeria presently has grid sourced power generation capacity of 7,500MW, but only an average of 3,600MW gets to the end-users.
According to Guillaume Moyen, Company’s Group Financial Officer, at the firm’s 13th Annual General Meeting recently, the increase was due to the volume of growth and inflationary pressure on its costs.
According to Moyen, the cost of manufacturing went up by 25.8 percent to N551.0 billion from N437.9 billion in 2020, while fuel and power gulped about N196.6 billion from N146.342 billion and materials consumed about 30 percent, representing N175 billion from N134.91 billion.
The National Bureau of Statistics (NBS) says Nigeria’s inflation rate increased to 17.71 percent on a year-on-year basis in May.
Michel Puchercos, Managing Director, Dangote Group, said the biggest challenge the company had in 2021 was the increase in inflation across cost lines.
Puchercos said the company experienced a significant spike in its energy costs and spare parts, saying some of the cost pressures were due to the fall of the naira while others were due to macroeconomic pressures caused by inflation.
The company’s GMD said the firm experienced supply challenges in sea and freight costs and also the cost of clinker like in Cameroon and cement imports from Ghana.
Author
