By Publisher
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AbdulSamad Rabiu, the Chairman of BUA Cement, has given reasons the company could not continue with its intention to sell cement at N3,500 in 2023.
According to Rabiu, BUA discontinued the plan after selling over a million tons of cement to dealers at N3,500 per bag because the benefits were not transferred to the end-users.
He noted that the dealers were selling each bag of cement to consumers at between N7,000 to N8,000, thereby making a mess of its intention since the company did not have power to influence pricing in the open market.
“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,” he lamented.
“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 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 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 and more difficult for us to actually sustain that price policy.”
