- Marketers are selling the price of Bua cement above N5,000 even after the company said it is slashing the price.
- They say the price of the cement would not be sold for N3,500 even if Bua slashes its ex-factory price
- They said manufacturers must further bring down the ex-factory price to reflect a significant change
The ex-factory price of BUA cement was recently reduced by 30% to N3,500, but the cement has continued to be sold for N5,000 and above in several regions of the country.
In an earlier report, the company said the changes were to be reflected starting Monday, October 2, 2023.
According to Legit.ng's finding, the cost of a bag of BUA cement is as high as N5,500 in some regions of the nation.
Cement price continues to sell above N5,000
Legit.ng chatted with Baba Seki, a well-known bricklayer in Lagos' Iyana-Iba neighbourhood. He described the announcement to lower cement prices as simply a media spin.
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He claims that ever since the announcement, the bricklayers have continued to expect this to reflect, but no marketer has managed to lower the price.
Here, we have not seen any price deduction. It is only in the news that they mentioned the price of Bua cement will be slashed. I am still buying the cement for N5,200.
A distributor Shola Mufta in Lagos claimed that Dangote cement is sold for N5,100 while BUA Cement is sold for N5,200.
Cement price has not gone below N5,000 for a very long time. Even last year, it was sold for like N4,500. So it is not true that cement prices went down. It is what they say but it is not like that.
Business Hallmark discovered that the BUA brand costs an average of N5,400 in Ibadan, the capital of Oyo State. Additionally, the brand averaged N5,450 in Osogbo, N5,500 in Akure, and N5,500 in Ado-Ekiti.
Cement traders who spoke to the news outlet explained why cement prices might not be offered for so cheap.
A major cement distributor Alhaja Shakira Folarin, told BH that even if BUA gives out a bag of cement at the rate of N3,500 from its plants in Kalambaina, Sokoto State, or Obu, Okpella, in Edo State, it doesn’t mean consumers will buy for the same amount.
While BUA is in charge of delivering the goods to its depots in Lagos and the South West states for large distributors to pick up, he said that the distributors are in charge of paying the costs of transporting the cement from BUA depots to their warehouses.
In her analysis, a flatbed trailer that can move up to 12 tonnes (240 bags) of cement at once costs N400,000. He stated that this would equal N1,667 if divided by 240 bags of cement and N400,000.
Add N1,667 to the sum of N3,500 BUA is selling to us, you will get N5,157 per bag. Already, the amount is above the N5,000 ma ,even though we have not added other costs like carriers' loaders fees, warehousing costs and traders’ margins.
We pay a loader/carrier the sum of N100 for every bag of cement he can offload. That is another N24,000 on a trailer load of cement and N100 on each bag.
She continued by saying that either producers further reduce the ex-factory price of the product or there is a significant drop in transportation costs before Nigerians witness a notable drop in the price of cement.
Toyin Abodunrin, another speaker, discussed the reasons why cement costs are still high in Apata, Ibadan. According to him, retailers do not receive the merchandise from distributors at the amount of N3,500 as stated by BUA.
How do Nigerians want us to sell at N3,500 since we are not buying at the rate? The last consignment I bought was at the old rate as my distributor told me that his price had not changed.
Yes, you can buy at the rate of N3,500 as a distributor when you go to Sokoto or Edo State where I learned the company has its plants. However, you will need to hire a trailer to bring the products to your warehouse.
He noted that if this is added to the cost of diesel now, it will sum up to more than two thousand naira on transportation.
He added that the distributors sell to them at N5,000 or N5,100. Hence they, as retailers, sell for N5,300.
He also added that the brand is more expensive than other brands because it is scarce.
Dangote Cement Reacts to Allegations of Selling Cement Cheaper in Other Countries
Dangote Cement Plc has clarified that its cement pricing aligns with, or even falls below, the prevailing prices along the West African coastline, Legit.ng had reported.
In addition, the company, in a statement, said that in contrast to widely circulated reports in various media, the cost of a bag of cement from its operations in Nigeria had not changed.
This is coming after the company received harsh criticism for the price difference between its cement in Nigeria and other West African nations.