BUA Cement Chairman, AbdulSamad Rabiu, disclosed that his company’s initiative to sell cement at a reduced price of ₦3,500 per bag in 2023 was undermined by dealers who exploited the plan by selling the product for as high as ₦8,000.
BUA had sold over a million tons to these dealers at the target price, intending to make cement affordable.
However, due to factors like the Naira’s devaluation and fuel subsidy removal, the company could not sustain the initiative and regulate the dealers’ price hikes effectively.
“Some were selling at ₦7,000 and ₦8,000 per bag. They made a lot of money with a very high margin. I think we had sold more than a million tons at ₦3,500 before we realised what the dealers were doing,” he said.
“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 are subsidizing dealers.
“I’m referring to the point when the foreign exchange rate moved from about ₦600 to maybe ₦1,800 to the US Dollar. So, it became even more challenging and more difficult for us to actually sustain that price policy.”
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