AbdulSamad Rabiu, the Chairman of BUA Cement, has disclosed that his company’s efforts to offer cement at an affordable price were undermined by market dealers. In 2023, BUA Cement aimed to sell cement at N3,500 per bag, hoping to make it more accessible to Nigerians. The company sold over a million tons of cement to dealers at this price with the intention of keeping costs down for consumers.

He said;

“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.

“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 the 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 subsidizing 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.”

However, this plan was thwarted as dealers and wholesale merchants chose to mark up the price significantly. Instead of the intended N3,500, consumers ended up paying between N7,000 and N8,000 per bag. Rabiu explained that BUA Cement was unable to regulate these dealers’ actions due to a lack of control over the open market. The dealers profited by taking advantage of the high margins, leaving BUA Cement powerless to enforce its pricing strategy.