Cement Company Competing with Dangote Shares N67bn After Selling Cement for N3,500
- Chairman of BUA Cement Plc Abdul Samad Rabiu claims that the nation's cement pricing are still the lowest
- The BUA CEO claims that electricity usage, which costs billions of naira, remains the biggest barrier to the cement sector
- The BUA chairman also discussed how the removal of gasoline subsidies and the depreciation of the Naira made price reductions untenable
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
In comparison to other African nations, the country's cement prices are still the lowest, according to Abdul Samad Rabiu, Chairman of BUA Cement Plc.
Source: UGC
This is despite significant energy issues faced by the manufacturing sector.
At the company's 2023 Annual General Meeting (AGM), which was recently conducted in Abuja, Rabiu said shareholders approved a dividend of N67 billion, or N2 per share, for the fiscal year.
According to the BUA CEO, energy consumption continues to be the cement industry's largest obstacle, costing billions of naira.
He claimed that dealers who purchased the product at a significantly lower cost at the company's factory and then sold it to end users at a higher price had defied the company's promise to induce a drop in the price of cement.
According to him, the company had sold more than a million bags of cement to dealers for N3,500 each, but the dealers then marketed the product to customers for between N7,000 and N8,000.
The BUA chairman also mentioned how price reductions were unsustainable due to the devaluation of the Naira and the elimination of petrol subsidies.
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.”
He said,
“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.”
SON sends message to Dangote, BUA, other
Legit.ng reported that Dr. Ifeanyi Chukwunonso Okeke, the Director General/Chief Executive of the Standard Organization of Nigeria (SON), has instructed building engineers, cement manufacturers, and block makers to uphold standards to reduce the number of building collapse incidents in the country.
He said this during a one-day sensitisation training for block moulders in Abeokuta, Ogun State, on Thursday, April 18.
The DG, represented by the Director of Southwest Talatu Ethan, noted that building collapses pose a severe risk to Nigeria since they jeopardise the country's construction industry and overall progress.
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Source: Legit.ng
