BUA CEO Explains Reasons Behind Soaring Cement Prices

BUA CEO Explains Reasons Behind Soaring Cement Prices

AbdulSamad Rabiu, Chairman of BUA Cement, revealed at the company’s 8th Annual General Meeting in Abuja that cement dealers undermined efforts to sell cement at N3,500 per bag last year. Despite BUA Cement’s intention to benefit consumers by selling over a million tons at this price, dealers sold the cement to customers at N7,000 to N8,000 per bag…….CONTINUE READING 

Rabiu explained that the company abandoned this pricing policy because it did not want to subsidize dealers, who profited significantly from the high margins. The devaluation of the Naira and the removal of fuel subsidies further complicated the situation, making the policy unsustainable.

Rabiu noted, “Dealers took advantage of the policy, selling at double the price we offered. Despite our efforts to maintain the lower price, we faced challenges due to currency fluctuations and increased fuel costs.”

He also mentioned that, despite the challenges, cement prices today are relatively lower than last year, considering the significant rise in the dollar exchange rate. BUA Cement has worked to limit price increases, with current prices reflecting only a 50% rise from early last year.

The company has faced substantial cost pressures due to the Naira’s devaluation, rising energy costs, and inflation, with monthly expenses for one of its plants rising to N15-16 billion from N3-4 billion. BUA Cement reported a 27.4% increase in revenue to N460 billion for the year, up from N361 billion in 2022. However, the company experienced a 39.5% increase in production costs to N276 billion and a net foreign exchange loss of N70 billion, with N52.5 billion attributed to finance costs. Despite these challenges, BUA Cement posted a net profit of N69.5 billion and declared a N2 dividend per share.