The Chairman of BUA Group, AbdusSamad Rabiu has revealed that the company’s attempt to lower cement prices from N4,500 to N3,500 per bag last year was thwarted by the actions of cement dealers. Speaking at BUA’s 8th annual general meeting in Abuja, Rabiu explained that the company had supplied over a million tons of cement to dealers at the reduced price of N3,500 per bag. However, dealers were selling the cement to consumers at prices between N7,000 and N8,000 per bag.
Rabiu noted that the naira devaluation and the removal of the petrol subsidy made it impossible to maintain the low price. He said, “Many dealers exploited this policy. Instead of passing on the lower prices to customers, they sold the cement at double the price we provided it to them. Some were charging N7,000 and N8,000 per bag, resulting in high profit margins. We had already sold over a million tons at N3,500 before we realized what was happening.” noted that the naira devaluation and the removal of the petrol subsidy made it impossible to maintain the low price. He said, “Many dealers exploited this policy. Instead of passing on the lower prices to customers, they sold the cement at double the price we provided it to them. Some were charging N7,000 and N8,000 per bag, resulting in high profit margins. We had already sold over a million tons at N3,500 before we realized what was happening.”
He added, “Due to the devaluation of the naira and the removal of the fuel subsidy, we could not sustain this pricing strategy. We wanted to keep the price at that level, but dealers refused to comply. We faced significant challenges as the exchange rate soared from about N600 to N1,800 to the US dollar, making it unsustainable to continue this policy.
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