James Emejo in Abuja
The Chairman, BUA Cement Plc, Abdul Samad Rabiu, said the current price of cement in the country remained the cheapest compared to other African countries.
He said this was in spite of severe energy challenges in the manufacturing sector.
Rabiu disclosed this during the company’s 2023 Annual General Meeting (AGM) held recently in Abuja, where shareholders also approved the sum of N67 billion as dividend for the financial year, translating to N2 per share.
The BUA boss said energy consumption remained biggest challenge in the cement industry gulping billions of naira.
He said the company’s promise to force a reduction in the price of cement was frustrated by dealers who bought the product at a much lower price at its factory only to sell at higher prices to end users.
He said the company had sold over a million tons of cement to dealers at N3,500 per bag, but the latter sold to consumers at prices ranging between N7,000 and N8,000.
The BUA chairman also pointed out that Naira devaluation and the petrol subsidy removal also made price reduction unsustainable.
Rabiu 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 N8,000 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.
“And then, because of the issues that Nigeria faced at the time about the devaluation of the naira last year and the removal of fuel subsidy, we could not continue that policy.”
He said, “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 were subsidising dealers.
“I’m referring to the point when the foreign exchange rate moved from about N600 to maybe N1,800 to the US dollar. So, it became even more challenging for us to sustain that price policy.”
