AbdulSamad Rabiu, the Multi-billionaire Chairman of BUA Cement, has said the intention of his company to sell cement at N3,500 in 2023 was frustrated by the actions of cement dealers.
Rabiu said BUA sold over a million tons of cement to dealers at N3,500 per bag, with the intention that Nigerians buy cement at an affordable price but that instead marketers and wholesale merchants sold each bag of cement to consumers for prices ranging from N7,000 to N8,000.
He mentioned that BUA Cement was unable to regulate the dealers who, he claimed, were earning substantial profits due to the high margins, as the company lacked influence over pricing in the open market.
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.
“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 and more difficult for us to actually sustain that price policy.”
