The chairman of BUA Cement, AbdulSamad Rabiu, has disclosed how avaricious dealers undermined his company’s attempt to sell cement to Nigerians in 2023 at a discounted price of N3500 per bag.
Rabiu claims that even though BUA Cement wanted to lower the cost of cement for Nigerians, dealers seriously hampered the company’s efforts by selling the material for much more than N8,000 per bag.
Rabiu explained that BUA Cement had sold over a million tons of cement to dealers at the targeted price of N3,500 per bag, aiming to make the product more accessible to the public.
The pricing strategy was abused by numerous dealers and wholesale merchants, who marked up the prices significantly, frustrating the plan.
Instead of passing the savings on to consumers, these dealers sold the cement at prices ranging from N7,000 to N8,000 per bag.
Rabiu mentioned that BUA Cement had trouble controlling the dealers who were making large profits.
In addition, he mentioned the depreciation of the Naira and the elimination of fuel subsidies as extra challenges in keeping the subsidized price in place.
In his words:
“So, a lot of the dealers took advantage of that policy. Instead of passing on the reduced prices to the clients, they were even selling our products to them for twice as much.
“Some were selling at N7,000 and 8,000 per bag. They made a lot of money with a very high margin. I believe that before we realized what the dealers were doing, we had sold over a million tons at N3,500.
“And then, we were unable to maintain that policy due to the problems Nigeria was facing at the time regarding the devaluation of the Naira the previous year and the elimination of fuel subsidies.
“We wanted that price to stay at that level but dealers refused. In other words, we were unable to continue that for the simple reason that we did not want to be supporting dealers.
“I am talking about the moment when the exchange rate to the US dollar changed from roughly N600 to maybe N1,800. So, it became even more challenging and more difficult for us to actually sustain that price policy.”
Published by Ejoh Caleb
