Cement sellers frustrated BUA from selling at N3500 per bag – Rabiu

Cement sellers frustrated BUA from selling at N3500 per bag – Rabiu

AbdulSamad Rabiu, the Chairman of BUA Cement, has said the
intention of his company to sell cement at N3,500 in 2023 was frustrated by the
actions of cement dealers.

 

Rabiu said BUA sold over a million tons of cement to dealers
at N3,500 per bag, intending for these to be transferred to the end-users.

 

Speaking in Abuja, Rabiu noted that the dealers were selling
each bag of cement to consumers for prices ranging from N7,000 to N8,000.

 

He mentioned that the company needed to discontinue the
policy since its involvement was not intended to support dealers financially.

 

He mentioned that BUA Cement was unable to regulate the
dealers who, he claimed, were earning substantial profits due to the high
margins, as the company lacked influence over pricing in the open market.

 

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 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.”

Source: Cement sellers frustrated BUA from selling at N3500 per bag – Rabiu

 - NigerianEye

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