BUA Finally Explains Why Its Cement Sold Above N3,500/bag Despite Slashing Cost

BUA Finally Explains Why Its Cement Sold Above N3,500/bag Despite Slashing Cost

  • The Group Executive Director of BUA Group has explained why the slashing of cement price to N3,500 was not noticed
  • He affirmed that the company indeed brought down the cement price per bag as against the report that it was just a media propaganda
  • He also stated that the company had to draw back on the implementation after five months because it was no longer sustainable

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Kabir Rabiu, the Group Executive Director of BUA Group, said a price reduction from N5,500 to N3,500 per bag took effect from October 2, 2023.

BUA cement explained high cost of cement
Group executive director of BUA Group, Kabir Rabiu, stated that the price reduction was indeed carried out starting from October 2nd, 2023. Photo Credit: BUA Group
Source: Getty Images

He said this in an Arise TV news segment on the ‘macroeconomics of cement prices’.

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Recall that Abdulsamad Rabiu, the chairman of BUA Cement Plc, expressed confidence that a drop in cement prices would result from the completion of the company's two new factories by the end of last year.

According to Punch report, Rabiu revealed that its two plants, the Obu Line 3 and the Sokoto Line 5, would give the business a six million tonne combined capacity.

Despite this, Legit.ng reported that the cement continued to be sold for N5,000 and above in several regions of the country.

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In a recent development, Independent.ng reported that Kabir Rabiu stated that the price reduction was indeed carried out from October 2, 2023, in line with the commitment of Alhaji Abdul-Samad Rabiu to ensure the accessibility and affordability of the product for Nigerians.

He said:

“BUA cement price reduction did happen. Our chairman committed, and we fulfilled the commitment by running it for five months.
“We reduced our cement across our plant to N3500, the x-factory price.
“But, as you know, industries such as cement in Nigeria, when we do this kind of commitment, we were expecting other players to come along because if you look at the industry where we are operating, our market share of 30 -32% and for us to make this gestures, other players were not doing it, and turn out to be very difficult for it to be fully implemented."

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He added that the program, which ran for almost five months, was taken advantage of by the middleman because other players did not follow suit.

“So, what happened was that even though we were selling the cement at N3500 to support the economy and the users, there was no direct benefit, at least to the end users, because other players were selling at previous higher prices.
“And with that, it turned out to be increasingly difficult for us to continue, and whilst we were doing that, the cost began to go up, and we were forced to change our position a little bit."

In addition, he explained that it was also discovered that some of its plants had some issues that further put enormous pressure on its cement supplies to meet the increasing demand.

He said these factors led to an even wider gap between what cement was selling in the market and factory and what the market was.

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BUA Group approves 50% increase in workers' salaries

Legit.ng reported that in a significant step to prioritise employees' welfare, Abdul Samad Rabiu, the head of BUA Group, has approved a massive 50% rise in staff compensation across his conglomerate.

The decision was made public through an internal memo from BUA Group's head of human resources, Mohammed Wali.

It followed reports that the price of a 50kg bag of cement rose to about N9,500 in many parts of Lagos and around the country amid the biting effect of inflation in Nigeria.

Source: Legit.ng

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