Chairman of BUA Cement Plc, Abdulsamad Rabiu, has revealed how cement dealers frustrated his company’s plan to bring down the price of cement to N3,500 per bag in 2023.
Speaking at the 8th Annual General Meeting of the company on Thursday, Rabiu said his company had plans to sell cement for as low as ₦3,500 per bag but dealers frustrated the move by not passing the low price to customers. He said the dealers were interested in making large profits, hence selling at double the price they bought from his company.
Join our WhatsApp ChannelHe said: “So, a lot of the dealers took advantage of that policy. Rather than pass the low prices to the customers, they were selling at even double the price we sold to them.
“Some were selling at N7,000 and 8,000 per bag. They made a lot of money with a very high margin. I think we had sold more than a million tons at N3,500 before we realised what the dealers were doing.”
The BUA chairman also stated that the depreciation of the naira and fuel subsidy removal last year also affected their operations.
“And then, because of the issues that Nigeria faced at the time about devaluation of the naira last year and the removal of fuel subsidy, we could not continue that policy.
“We wanted that price to stay at that level but dealers refused. So, we could not sustain that simply because we did not want to be in a situation where we are subsidising dealers,” he added.
Prime Business Africa recalls that the BUA cement company had announced plans to begin selling a bag of cement at N3,500 by October last year. However, that did not come to fruition as the price for a 50kg bag of cement for different brands later went up, selling as high as N15,000 before coming down to about N7,500.
READ ALSO: Real Estate Crisis: How BUA Cement Price Rose 150% In 4 Weeks, Mgt Jerks Up Staff Salary By 50%
In February, the Federal Government through the Minister of Works, David Umahi, and the Minister of Industry, Trade and Investment, Doris Uzoka-Anite, had a meeting with cement producers to address the high price of cement.
After the meeting, the Federal Government and Major cement manufacturers in Nigeria, such as Dangote, BUA and Lafarge agreed that the price of a bag of cement will not exceed between N7,000 and N8,000.
The high price of cement has affected the cost of building and construction across the country.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
