It was a wild excitement in the building materials markets across the country in the last quarter of 2023 when BUA Cement announced to the world that, beginning from October 2, 2023, x-factory price of its product would sell for N3,500 per bag, down from N5,500 per bag.
The reason for this, according to Abdul-Samad Rabiu, Chairman of BUA Group, was because BUA was determined to ensure the accessibility and affordability of the product for customers despite economic challenges in the country.
Though Kabir Rabiu, Group Executive Director of BUA Group, insisted recently that this price slash was carried out for five months, Nigerians can hardly recall where and when this product was sold for N3,500 per bag, excerpt perhaps, in the northern part of the country where company operates.
However, whether that ever happened or not is now history as BUA has joined the craze in the cement market across the country where the product is selling for between N10,000 and N11,000 per 50kg bag.
The reason for this, according to Rabiu, who spoke on an Arise News programme, is because “other players in the market took advantage of our gesture; BUA cement price reduction actually did happen; our chairman made the commitment, and we actually fulfilled the commitment by running it for five months; we reduced our cement across our plant to N3,500, but that was actually x-factory price.”
The executive director said they were expecting other players to come along because given that their market share in the industry is 30 -32 percent, for them to make this gestures when other players are not doing it, it turned out to be very difficult for it to be fully implemented.
He emphasized that because other players did not follow suit, the distributors and the middleman began to take advantage of the gesture they extended to the market and to also to help the economy.
What happened therefore, he added, was that even though they were selling their product at N3,500 in order to support the economy and the users, there was no direct benefits, at least, to the end users because other players were selling at previous higher prices.
This explains why, despite the meeting with the federal government where an agreement was reached that cement should sell for between N7,000 and N8,000, BUA along with Dangote and Lafarge still sell their products far above the agreed price.
Following public outcry, especially from Real Estate Developers Association of Nigeria (REDAN) that the government brokered price was still too high to encourage affordable housing development, President Bola Tinubu has directed that Dangote, Bua and Lafarge to revert to the old price of cement, but this too, has not changed anything as the manufacturers seem to be defiant of the presidential directive.
“We expect BUA to lead this price reversal based on their earlier commitment to help the economy by making the product accessible and affordable. I hope their action may encourage others to follow suit,” Sebastin Okafor, a builder, told BusinessDay in an interview, lamenting that most of his colleagues were now idle as a result of the rising price of cement and other building materials.
BUA had said that “upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17million metric tonnes per annum, BUA Cement Plc intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024.”
Okafor said that Nigerians, especially those of them in the building industry, were still hanging on to this promise and expect that either through government policy directive or moral suasion, the president should prevail on these manufacturers to make their products affordable and help the housing sector.
