How to start cement business in Nigeria (detailed guide)


Cement business is a very lucrative buying and selling business in Nigeria, there are different ways of doing this business, you can either be a distributor, a sub-distributor, or a retailer. Distributors earn their income from monthly commission they get from the number of trailers they sold per month. There are secret in every business but then you should be smart too, and because income is from commission for distributors, they sometimes sell cheaper than factory price in other to meet up with their monthly expectations. This happens towards the end of the month, once you cross the threshold you will get paid and commission ranges from ₦100,000-₦150,000. Once you reach company monthly target for distributors, commission is guaranteed. As a beginner you need to start as a retailer to gain experience and gather enough customers before going into distributorship.


Types of cement in Nigeria

  • Dangote cement
  • BUA cement
  • Reagan
  • Eagle cement
  • Portland cement
  • UNICEM cement

Starting as a retailer

You can start with as low as 100-200 bags even without a shop but having a shop is ideal(so others can see you) but your shop should be mobile, because you can't continue staying in a place that has been fully developed with only a few persons patronizing your business maybe for renovation. So you may not necessarily need a shop just get pallets and tampoline then get a supplier that supplies directly from the company, instead of going for a sub-distributor.

Place your business in areas that are just developing where there are lots of construction works, arrange for mobility: motorbike, wheelbarrow, van etc. Customers most likely leave the transportation of the cement to sellers and if you don't deliver, they will move to another trader who is ready to take advantage.

So on the other hand if you have 1.5 - 2 million and a good site to position your business, especially along the road and in a place were people know you then you will sell.

Dangote factories are located in: Gboko (Benue state), Ibese (Lagos state), Obajana (Kogi state), (for your distribution instead of sub-distributor).


Marketing process

Make sure to sell more than one product because some bricklayers consider certain brand fo0r pestering and another for moulding (know this).

Meet with block industries, contractors, builders, agencies etc. for marketing , make sure you have more than one supplier to avoid disappointment. Don't cheat by refilling or re-bagging a bag in other to have more gains (cause this will damage your image which is not good for business growth and it kills trust and make you lost customers).


Profitability

There is a good profit in cement business as a distributor or a retailer, there is profit in the business. Using Dangote cement as a case study, a bag of Dangote cement from factory cost ₦2570 and the price fluctuates almost every week and if you are not delivering by yourself, you will pay ₦2700. Company sells 900 bags for a full truck but a distributor will sell 600 bags for you.

A truck from the factory is ₦900,000, if you supply the 900 bags at a retail price of ₦2800 then 2800-2700=₦100.00 balance. Therefore, 900 × 100 = ₦90,000 from a single trip as profit, when you remove the cost of expenditures it may reduce to ₦80,000 as profit from one trip. This is without much stress  or extra expenses, if you can supply up to 5-10 trip/trailer a month you will make a whopping sum of ₦500,000-800,000😮 in a month. There are days of promo during that time you will make more profit, with this you can see how profitable cement business is, it's only require you to take the risk and invest in it.


How to become a Dangote cement distributor in Nigeria

To get Dangote's approval as a distributor is very easy but there are requirements in other to get registered, you must have a registered business name because when presenting your application letter you will have to submit it along, and a bank registered reference letter which should be obtained from your bank where you opened a cooperate account. Before you open a cooperate account with a bank you have to present Tax Identification Number (TIN) which you got from tax office.


Registration requirement

You have to provide a soft copy of the following documents before applying as a distributor.

  • Your Certificate of Company Registration issued by CAC.
  • Application letter to become a distributor
  • A scanned copy of the reference letter
  • A passport photograph of the company's owner.
  • A passport photograph of the company's representative.
  • This is with a guaranteed period of 48 hours registration.
  • No application or registration deposit is required.
  • You must have the financial capacity to acquire a truckload of Dangote cement.


You should know that the amount you sell in your state is determined by the distance from the factory, let say the price of cement sold at Lagos State maybe different or cheaper than Edo State. The price you get your trailer loads depends on who you buy from, this is why you buy from the distributors.


Latest Prices of Cement in Nigeria Today

  • BUA cement price is 2550 (one bag).
  • Dangote cement is 2570 (one bag).
  • UNICEM cement price is 2550 (one bag).
  • Eagle cement price is 2550 (one bag).

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