Why BUA Cement Fails To Sell For N3,500 – Chairman
The Chairman of BUA Group, Abdul Samad Rabiu, has revealed that the company’s efforts to reduce the price of cement to N3,500 per bag were thwarted by cement dealers.
Speaking on Thursday at the firm’s 8th annual general meeting held in Abuja, the BUA chairman said despite selling over a million tons of cement to dealers at the discounted price, they chose to sell it to consumers at inflated prices, ranging from N7,000 to N8,000 per bag.
Rabiu expressed frustration that dealers took advantage of the policy, making huge profits while consumers did not benefit from the intended price reduction.
He attributed the inability to sustain the policy to the devaluation of the naira and the removal of fuel subsidies, which made it challenging for the company to maintain the reduced price.
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.
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“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.
“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.”
