Factors that influence the price of cement in Nigeria

Posted by james Oluwasegun paul on Monday August 24, 2015 at 13:20:58:

Cement is one of the most basic materials in Nigeria as it is vital for any construction. There are a lot factors that influence how much it is sold. Outlined below are some of the major factors.

Cost of Power used in production
This industry is very energy intensive - it relies so much on power. It is said that this constitutes about 30% of how much cement will be sold for. Any slight change in cost of fuel invariably affects the price of the cement too. By fuel I mean in its various forms like coal, lignite, diesel and pet-coke.

Cost of Raw Materials
Considered as second most important and major component in cement production is the raw material cost. Some are naturally occurring and others industrial byproducts. This is considered to make up about 40% of sold price. When these raw materials with limestone being the primary, are expensive to get, it sure will affect the price of the cement itself.

Cost of Transportation
This is typical of any business that involves transportation. Getting this cement from the manufacturing facilities to the end usually involves quite a distance. This is because the plants for cement production are usually located where limestone are gotten and this is usually in interior parts of the town.

Other expenses
The price of cement is also influenced by other expenses incurred, such as include administration cost, employee costs, cost of maintenance and repair. This doesn't account for much in the pricing - just about 15%.