A cross-section of Nigerians has expressed reservations about the inability of BUA Cement to keep to its promise of reducing the price of cement in the country. This is coming on the heels of the statement credited to the Chairman of BUA Cement, Abdul Samad Rabiu, where he stated that cement dealers frustrated his company’s plan to sell cement at N3,500 per bag to Nigerians.
Speaking at the 8th Annual General Meeting of the company in Abuja, Rabiu said that while his company sold over a million tons of cement to dealers at N3, 500, per bag, with the intention that they would pass the benefits to end-users, the dealers sold a bag of cement to consumers at between N7000 and N8,000. According to him, BUA Cement could not stop the dealers whom he said made huge profits from the high margin because the company had no control over prices in the open market. He added that the Naira devaluation and the fuel subsidy removal also played roles in making the policy unsustainable.
However, some stakeholders faulted the position of the chairman of
BUA Cement stating that he played to the gallery when he made the statement
that cement would be sold at N3,500 per bag.
According to Kayode Animashaun, a major player in the cement
business, he stated that cement manufacturers in the country have deliberately
refused to bring down the prices of cement and instead elected to play to the
gallery.
“ The recent excuse advanced by the chairman of Bua Cement is
unacceptable. There is no way dealers would buy at N3,500 and sell at N8,000. It
is a feeble attempt at giving a dog a bad name to hang it. We understand that
gimmick they play most time. It is indeed a regime for de-marketing among the
major players in the industry. The big players want to outshine each other and
one of the ways they do it is to make statements in the public that are not in
tune with the reality on the ground.”
“ It is a fraudulent regime and one that is laced with deceit. I
can bet that Bua Cement played to the gallery and possibly gained market share.
They knew they were not going to implement the proposed price regime but they
saturated the media space with the falsehood that cement was going to be sold
at N3,500 per bag.
This was corroborated by Ahmed Magaji, a stakeholder in the cement
distribution value chain across the country. According to him, what is
happening is a price war between the major players in the sector.
“ There is no way dealers would get a bag of cement for 3,500 and
sell for N8,000. It is absurd. don’t forget that most of us dealers buy on
credit and remit monies when we come for a new stock. Now here is the trick, do
you think the manufacturer would continue to sell to us when they know that we
are selling at N8,000? The position of Bua cement does not add up. They are
trying to shift blame, which is very common with these businessmen.”
According to a source who works for one of the major cement
companies in Nigeria, he stated that there is an ongoing price war between the
major players in the sector. He further added that these players are out to
maximize profit and it is common for them to push certain narratives in the
public space.
“The case of BUA cement is one. They played a fast one on
unsuspecting members of the general public, and they succeeded. The preference
for BUA cement rose astronomically. But now, people are beginning to ask
questions and the chairman had to come up with a statement blaming the cement
dealers. We know how it works in this industry. BUA Cement played a fast one.
But let’s see how long they can sustain it.”
In a similar vein, a cross-section of dealers interviewed thought
that BUA cement owes Nigerians apologies for their inability to keep to their
words with regards to cement selling for N3,500 per bag. A source who pleaded
anonymity stated the position of BUA cement smacks of a mockery of the present
administration.
“I had expected the management of BUA Cement to come out clean
instead of shifting blame. They knew they were playing games when they made the
announcement that cement was going to be sold for the amount they quoted. Now
that the chicken has come home to roost they are in a tight corner and the best
they could do is to shift blame to cement dealers.”
“I think the management of BUA Cement owes Nigerians apologies if
they can’t achieve the N3,500 price for a bag of cement. That is the rational
thing to do in this circumstance.”
It would be recalled that BUA Chairman Abdul-Samad Rabiu in 2023
promised that his company would sell a bag of cement at N3,500 in 2024 after
meeting President Bola Ahmed Tinubu.
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