BUA Cement Chairman AbdulSamad Rabiu Criticizes Dealers for Frustrating Efforts to Lower Cement Prices
Abuja, August 29, 2024 — AbdulSamad Rabiu, Chairman of BUA Cement, has revealed that the company’s attempt to reduce the price of cement to N3,500 per bag last year was thwarted by the actions of cement dealers, who instead sold the product to consumers at inflated prices.
Speaking at the 8th Annual General Meeting of BUA Cement in Abuja, Rabiu explained that the company had sold over a million tons of cement to dealers at the reduced price, with the intention that the savings would be passed on to the end-users. However, he expressed disappointment that dealers were instead selling each bag for between N7,000 and N8,000, effectively doubling the intended price.
Rabiu highlighted that the company had to discontinue the pricing policy, as it became clear that the initiative was not benefiting consumers but rather enriching the dealers. He pointed out that BUA Cement lacks the ability to regulate dealer pricing in the open market, which allowed the dealers to take advantage of the situation.
“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,” Rabiu stated. “Some were selling at N7,000 and N8,000 per bag. They made a lot of money with the very high margin. I think we had sold more than a million tons at N3,500 before we realized what the dealers were doing.”
The Chairman also noted that the economic challenges faced by Nigeria last year, including the devaluation of the Naira and the removal of the fuel subsidy, made it impossible for BUA Cement to continue the pricing 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,” Rabiu explained. “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.”
Rabiu’s comments underscore the difficulties faced by manufacturers in ensuring that price reductions reach the end consumers, especially in a market where middlemen have significant control. BUA Cement, one of Nigeria’s leading cement producers, remains committed to finding ways to make its products more affordable, despite these challenges.
