The Chairman, BUA Cement, AbdulSamad Rabiu, has said that his company’s intention to sell cement at N3,500 per bag last year was frustrated by the actions of cement dealers.
Rabiu disclosed this while speaking at the 8th Annual General Meeting, AGM, of the Company, held in Abuja, on Thursday.
According to him, his company had sold over a million tons of cement to dealers at a price of N3,500 per bag, intending for these savings to be transferred to the end-users. However, he noted that the dealers were selling each bag of cement to consumers for prices ranging from N7,000 to N8,000.
Rabiu also noted that the company needed to discontinue the policy since its involvement was not intended to support dealers financially, adding that BUA Cement was unable to regulate the dealers who, he claimed, were earning substantial profits due to the high margins, as the company lacks influence over pricing in the open market.
He 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 the 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 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 subsidizing 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.”
Also, two new directors given an appointment during the AGM are; Ganiat Adetutu Siyanbola, an independent Non-Executive Director and Chikezie Ajaero, an Executive Director.
