The Chairman of BUA Cement, Alhaji Abdul Samad Rabiu, has disclosed how cement dealers undermined his company’s initiative to sell cement at a reduced price of N3,500 per bag last year.
Speaking at the company’s 8th Annual General Meeting in Abuja, Rabiu recounted how the policy, intended to benefit end-users, was instead exploited by dealers who sold the cement at exorbitant prices.
According to Rabiu, BUA Cement sold over a million tons of cement to dealers at the reduced price, expecting these savings to be passed on to consumers. However, the dealers instead sold the cement at prices as high as N7,000 to N8,000 per bag, doubling or even tripling the intended price.
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A ton of cement is equivalent to 20 bags, each weighing 50 kilograms. The chairman emphasized that BUA Cement had no control over the open market prices, which allowed dealers to make substantial profits at the expense of the company’s policy goals. Consequently, the company had to discontinue the initiative as it was not sustainable and was effectively subsidizing the dealers rather than benefiting consumers.
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Rabiu also cited the Naira’s devaluation and the fuel subsidy’s removal last year as factors that further complicated the policy’s sustainability. He explained that the exchange rate had shifted dramatically from about N600 to between N1,800 and N1,900 to the US Dollar during that period, making it increasingly difficult to maintain the reduced price.
“We aimed to keep the price at N3,500 to benefit end-users, but the dealers refused to cooperate, forcing us to halt the policy. We didn’t want to be in a position where we were effectively subsidizing dealers who were exploiting the situation for huge profits,” Rabiu stated.