AbdulSamad Rabiu, Chairman of BUA Cement, revealed that his company’s plan to sell cement at N3,500 per bag in 2023 was undermined by cement dealers.
Rabiu stated that BUA sold over a million tons of cement to dealers at N3,500 per bag, with the expectation that the reduced price would be passed on to consumers.
However, speaking in Abuja, he disclosed that dealers were instead selling the cement to consumers for between N7,000 and N8,000 per bag.
He explained that BUA Cement had to abandon the policy as it was not designed to benefit dealers financially. Rabiu pointed out that the company had no control over the dealers, who were making significant profits by selling at much higher prices in the open market.
“A lot of the dealers took advantage of the policy,” Rabiu said. “Instead of passing on the lower prices to customers, they sold at double the price. Some were selling at N7,000 to N8,000 per bag, making substantial profits. We had sold more than a million tons at N3,500 before we realized what was happening.”
Rabiu added that due to the economic challenges Nigeria faced at the time, including the devaluation of the Naira and the removal of fuel subsidies, the company could not maintain the policy.
“We wanted to keep prices at that level, but the dealers refused. We could not sustain it because we did not want to end up subsidizing the dealers,” he explained. “When the foreign exchange rate went from around N600 to nearly N1,800 to the US dollar, it became even more difficult to continue with that pricing policy.”
