BUA’s chairman discusses the frustration and challenges in implementing a plan to cut cement prices to N3,500. Get the full story on the setback.
Last year, Abdul Samad Rabiu – the Chairman of BUA Group disclosed that his company’s attempt to decrease cement prices from N4,500 to N3,500 per bag was obstructed by the actions executed by cement dealers.
At the 8th yearly general assembly of BUA Group held in Abuja on Thursday, Rabiu elucidated that a surplus of one million metric tons of cement had been vended to merchants at an abridged rate of N3,500 per bag.
Instead of transferring these savings to consumers, the dealers extensively increased the prices and charged between N7,000 to N8,000 for each cement bag.
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With the naira devaluation and petrol subsidy removal, Rabiu highlighted that keeping the lower price was impractical due to added complexities.
He said that their intention was to maintain the price at N3,500, however, the dealers exploited the policy and sold cement for twice its original price resulting in significant earnings.
He stated that the swift decline in value of the naira resulted in a significant fluctuation of exchange rates ranging from N600 to approximately N1,800 per US dollar. This made it increasingly difficult for BUA Group to maintain their discounted pricing strategy. As a result, they were compelled to discontinue this approach and prevent subsidizing distributors at the company’s expense.
