The BUA Group Chairman, Abdul Samad Rabiu, has decried how his company’s intention to slash the price of cement from N4,500 to N3,500 per bag last year was frustrated by the actions of cement dealers.
Speaking Thursday at the firm’s 8th annual general meeting held in Abuja, the BUA chairman said the company had sold over a million tons of cement to dealers at a price of N3,500 per bag.
However, the BUA chairman said the dealers were selling each bag of cement for prices ranging between N7,000 and N8,000 to consumers .He noted that the naira devaluation and the petrol subsidy removal also made the policy unsustainable.
Rabiu 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 N8,000 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 were subsidising 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 for us to sustain that price policy.”
