Lafarge Africa blames Naira/$ exchange rate for production challenges as revenue dips

The Chief Executive Officer of Lafarge Africa, Khaled El Dokani, on Friday decried the exchange rate situation in Nigeria.

in a corporate document sent to shareholders on Friday, El Dokani said the exchange rate was affecting the company’s cost of producing cement in the country.

Lafarge is the third most valuable Cement firm in Nigeria, behind Dangote Cement and BUA Cement.

Ripples Nigeria had reported that the country was experiencing forex scarcity that had caused the exchange rate between the naira and dollar to significantly rise in the past years.

Before President Muhammadu Buhari assumed office in 2015, the exchange rate in the official market was around N200 but it has climbed to N444.5/$1 as of Thursday.

In the black market, the exchange rate was circling around N400 before Buhari came to power, but the exchange rate in the parallel market has risen to N775/$1 as of Friday.

This has increased the cost of production for companies operating in Nigeria and in need to import raw materials.

READ ALSO: Lafarge to pay $778m fine for financing Islamic terrorist groups

Due to the scarcity, firms have to wait longer to obtain forex in the official exchange market if they don’t want to pay exorbitant prices for the dollar.

But if in a hurry, they will have to pay a premium to buy dollars from the Bureau De Change operators in the black market.

“The worsening exchange rate situation impacted our Cost of Sales, specifically key supplies indexed to the United States dollar,” El Dokani said in the document.

Meanwhile, Lafarge Africa recorded 12.2 percent growth in Net Sales for Q3 this year, generating N83.26 billion to surpass the N74.18 billion grossed in the same period of 2021.

However, the Net income dropped from N12.07 billion in Q3 2021 to N7.48 billion in the corresponding period this year.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now