BUA Group Chairman Abdul Samad Rabiu revealed that his company’s attempt to reduce cement prices from N4,500 to N3,500 per bag last year was thwarted by cement dealers.
Speaking at the firm’s 8th annual general meeting in Abuja on Thursday, Rabiu stated that while BUA sold over a million tons of cement to dealers at N3,500 per bag, the dealers sold it to consumers for N7,000 to N8,000 per bag.
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He also noted that the naira devaluation and removal of the petrol subsidy further undermined the price reduction policy.
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Rabiu 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 N8,000 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 were subsidising dealers.
“I’m 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 for us to sustain that price policy.”
