We sold at 3500 per bag but marketers were selling to Nigerians at 8000 – BUA cement chairman, Rabiu speaks on his efforts to crash cement price

AbdulSamad Rabiu, the billionaire Chairman of BUA Cement, revealed that his company’s plan to sell cement at N3,500 per bag in 2023 was thwarted by the actions of cement dealers. Rabiu explained that BUA sold over a million tons of cement to dealers at this price to make it affordable for Nigerians, but instead, these dealers resold the cement to consumers at prices ranging from N7,000 to N8,000 per bag.

He noted that BUA Cement could not control the dealers, who were making substantial profits due to the high markups, as the company had no influence over the open market pricing.

He said;

So, a lot of the dealers took advantage of that policy. Rather than pass the low prices to the customers, they were selling at even double the price we sold to them.Some were selling at N7,000 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 N3,500 before we realised what the dealers were doing.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.Im referring to the point when the foreign exchange rate moved from about N600 to maybe N1,800 to the US Dollar. So, it became even more challenging and more difficult for us to actually sustain that price policy.