At the 8th Annual General Meeting of BUA Cement Plc, Chairman Abdulsamad Rabiu shared insights into the company’ s failed attempt to stabilize cement prices at ₦3, 500 per bag last year. Rabiu explained that the initiative, which aimed to make cement more affordable for Nigerians, was derailed by the actions of profiteering dealers who exploited the situation for personal gain. ..Read Full Article
Rabiu revealed that BUA Cement had initially implemented the pricing policy to help reduce the financial burden on consumers. However, instead of passing on the reduced prices to customers, many dealers took advantage of the situation by significantly marking up the prices. ” Some dealers were selling cement at ₦7, 000 to ₦8, 000 per bag, effectively doubling the price at which we sold it to them. They capitalized on the opportunity to make substantial profits with very high margins, ” Rabiu stated.
The chairman noted that the company had already sold over a million tons of cement at the ₦3, 500 price point before it became evident that the dealers were not adhering to the intended policy. The widespread profiteering not only undermined BUA Cement’ s efforts but also prevented consumers from benefiting from the lower prices.
Rabiu also pointed out that external economic factors further complicated the situation. The devaluation of the naira in 2023 and the removal of fuel subsidies made it increasingly difficult for the company to maintain the lower pricing strategy. ” Given the economic challenges at the time, including the naira devaluation and fuel subsidy removal, it became unsustainable to continue with the policy, ” he explained.
He emphasized that the company’ s goal was to keep cement prices affordable, but the combination of dealer profiteering and economic instability forced them to reconsider. ” We wanted to keep the price at ₦3, 500, but the dealers’ refusal to cooperate and the broader economic conditions made it impossible. We didn’ t want to find ourselves in a situation where we were effectively subsidizing the dealers instead of benefiting the consumers, ” Rabiu concluded.
This situation underscores the complexities and challenges faced by companies like BUA Cement in navigating market dynamics, especially in a volatile economic environment. Despite the setback, BUA Cement remains committed to exploring ways to make cement more accessible and affordable for Nigerians……..Read Full Article