CHAIRMAN of BUA Cement, Alhaji AbdulSamad Rabiu, has disclosed that his company’s intention to sell cement at N3,500 per bag last year was frustrated by the actions of cement dealers.
Speaking at the company’s 8th Annual General Meeting (AGM) held in Abuja, Rabiu said the company had sold over a million tons of cement to dealers at a price of N3,500 per bag, with intention of benefiting the end-users, but the effort was frustrated by dealers, who sold each bag to consumers for between N7,000 and N8,000.
He stated that the company had to discontinue the policy, as it was not intended to support dealers, who were earning substantial profits due to the high margins, as the company could not determine pricing in the open market.
“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 the very high margin.
“I think we had sold over 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 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 and more difficult for us to actually sustain that price policy.”
