Many Nigerians are disappointed that BUA Cement has not followed through on its promise to lower the price of cement in the country. This comes after BUA Cement’s Chairman, Abdul Samad Rabiu, claimed that cement dealers prevented the company from selling cement at N3,500 per bag to Nigerians.
Speaking at the 8th Annual General Meeting of the company in Abuja, Rabiu said that while his company sold over a million tons of cement to dealers at N3, 500, per bag, with the intention that they would pass the benefits to end-users, the dealers sold a bag of cement to consumers at between N7000 and N8,000. According to him, BUA Cement could not stop the dealers whom he said made huge profits from the high margin because the company had no control over prices in the open market. He added that the Naira devaluation and the fuel subsidy removal also played roles in making the policy unsustainable.
However, some stakeholders criticized the BUA Cement chairman for making an unrealistic statement about selling cement at N3,500 per bag.
According to Kayode Animashaun, a key figure in the cement industry, he mentioned that cement manufacturers in the country have intentionally refused to lower the prices of cement and instead opted to prioritize public perception.
“ The recent excuse advanced by the chairman of Bua Cement is unacceptable. There is no way dealers would buy at N3,500 and sell at N8,000. It is a feeble attempt at giving a dog a bad name to hang it. We understand that gimmick they play most time. It is indeed a regime for de-marketing among the major players in the industry. The big players want to outshine each other and one of the ways they do it is to make statements in the public that are not in tune with the reality on the ground.”
“ It is a fraudulent regime and one that is laced with deceit. I can bet that Bua Cement played to the gallery and possibly gained market share. They knew they were not going to implement the proposed price regime but they saturated the media space with the falsehood that cement was going to be sold at 3,500 per bag.
This was corroborated by Ahmed Magaji, a stakeholder in the cement distribution value chain across the country. According to him, what is happening is a price war between the major players in the sector.
“ There is no way dealers would buy a bag of cement for N3,500 and sell it for N8,000. It is absurd. Don’t forget that most of us dealers buy on credit and remit the money when we come for a new stock. Now here is the trick: do you think the manufacturer would continue to sell to us when they know that we are selling at N8,000? The position of Bua cement does not add up. They are trying to shift blame, which is very common with these businessmen.”
According to a source who works for one of the major cement companies in Nigeria, he stated that there is an ongoing price war between the major players in the sector. He further added that these players are out to maximize profit and it is common for them to push certain narratives in the public space.
“The case of BUA cement is one. They played a fast one on unsuspecting members of the general public, and they succeeded. The preference for BUA cement rose astronomically. But now, people are beginning to ask questions and the chairman had to come up with a statement blaming the cement dealers. We know how it works in this industry. BUA Cement played a fast one. But let’s see how long they can sustain it.”
A group of dealers interviewed believe that BUA Cement should apologize to Nigerians for not keeping their promise of selling cement for ₦3,500 per bag. An anonymous source stated that BUA Cement‘s stance seems disrespectful to the current administration.
“I had expected the management of BUA Cement to come out clean instead of shifting blame. They knew they were playing games when they made the announcement that cement was going to be sold for the amount they quoted. Now that the chicken has come home to roost they are in a tight corner and the best they could do is to shift blame to cement dealers.”
“I think the management of BUA Cement owes Nigerians apologies if they can’t achieve the 3,500 price for a bag of cement. That is the rational thing to do in this circumstance.”
It would be recalled that BUA Chairman Abdul-Samad Rabiu in 2023 promised that his company would sell a bag of cement at 3500 in 2024 after meeting President Bola Ahmed Tinubu.
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