“They Suddenly Stopped Production”: Nigerian Billionaire Finally Explains Why Food Price is High
- The Chairman of BUA Foods has given reasons why food prices continues to increase across the country
- The business mogul commended President Bola Tinubu for eliminating import taxes on food
- BUA Foods announced that it had extended its pasta manufacturing facility by partnering with FAVA
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Abdul Samad Rabiu, the Chairman of BUA Foods Plc, attributed the shortage and escalating expenses of food items in Nigeria on the actions of a few greedy distributors and manufacturers on Thursday.
Source: Getty Images
At the same time, the business tycoon praised President Bola Tinubu for waiving import duties on groceries.
At the company's third annual general meeting in Abuja, Rabiu made this revelation.
He said:
“BUA products are the cheapest in the market. And because we have other companies producing similar products, it is very difficult to price them low. For instance, a few months ago, the price of flour went as high as N70,000 per bag. We retained ours at N50,000 for quite some time to try and force other companies to also come down. But when they saw it was going to happen, they deliberately stopped production, and the prices kept going up.
“So when we were at N50,000, the distributors added N20,000 and were selling at N70,000 per bag. At one point, customers were making almost N20 million per truck of 75 tonnes of flour. Yes, it happened. While we were there at N50,000, still puffing and praying for the prices to come down, some companies were not happy that we were keeping the prices low.
“That was why they suddenly stopped production to create scarcity. With that scarcity, the price kept going up. So that is part of the problem. When we saw that, we knew it did not make sense for us to continue selling at N50,000 when the market was at N70,000. Our production is substantial, but there are two other companies that are bigger than us.
However, we believe that by next year, we are going to be bigger than them.”
The news of the expansion was made just a few days after BUA Foods declared that it had expanded its pasta production plant through an arrangement with FAVA, one of the top manufacturers of pasta equipment worldwide.
According to Rabiu in a Punch report, the partnership with the multinational corporation aligns with the business's strategic plan for enhancing food security in Nigeria.
Ayodele Abioye, the managing director of BUA Foods, highlighted the company's planned growth, stating that it was long needed.
Abioye said that the company has persevered in growing and has reached a peak market capitalization of N7.11 trillion, despite the economic downturn and a halt in business activity.
BUA CEO exposes those behind rice cost
Legit.ng reported that Abdul Samad Rabiu, the chairman of the board of directors of BUA Cement, disclosed that his company crashed the price of a bag of cement to N3,500.
Speaking at the 8th Annual General Meeting of the company in Abuja, Rabiu, however, revealed that the pricing was thwarted by dealers who exploited the situation, selling the same product at inflated prices of N7,000 and N8,000 per bag to Nigerians.
He revealed that BUA Cement sold over a million tons of cement to dealers at N3,500.
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Source: Legit.ng
