BUA CEO describes how dealers undermined a proposal to reduce cement costs to ₦3,500.

Written by on 30 August 2024

BUA CEO describes how dealers undermined a proposal to reduce cement costs to ₦3,500.

 

 

 

 

 

 

BUA CEO describes how dealers undermined a proposal to reduce cement costs to ₦3,500.

BUA CEO External economic variables, such as the naira’s depreciation and the elimination of the gasoline subsidy, also contributed to the pricing policy’s unsustainable nature.

BUA Cement Chairman Abdulsamad Rabiu revealed that his company’s attempt to lower cement prices to ₦3,500 per bag was blocked by unethical dealers.

During the 8th Annual General Meeting on Thursday, August 29, Rabiu explained how the dealers profited from the company’s price reduction approach.

According to Rabiu, many dealers neglected to pass on the savings to clients despite BUA Cement’s intention to decrease costs. Instead, they capitalized on the circumstance, increasing prices to as high as ₦7,000 or ₦8,000 per bag when purchasing from BUA for ₦3,500.

“Many of the dealers took advantage of that policy. Rather than passing on the low costs, they were selling for more than double the price we sold them,” Rabiu said.

Naira depreciation effect
The chairman went on to say that the manipulation was so prevalent that BUA had already sold over a million tons of cement at a discounted price before understanding the gravity of the situation.

He indicated that external economic issues, such as the depreciation of the naira and the elimination of the gasoline subsidy, also contributed to the pricing policy’s unsustainable nature.

Rabiu stated, “We wanted the pricing to stay at that level, but traders refused. So, we couldn’t keep doing it because we didn’t want to be in a situation where we were subsidizing dealers.


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