HALLMARK NEWS
Nigeria’s second largest cement producer, BUA Cement, has fired the opening shot in the latest episode of industrial hostilities between the three biggest players in the calcine limestone and clay mixing industry.
The Chairman of BUA Group, Abdul Samad Rabiu, had on Saturday, September 16, 2023, announced plans to reduce the price of cement in Nigeria from the current price of N5,500 to N3,500.
According to Rabiu, the price crash is part of his company’s contribution to supporting the efforts of the Federal Government to stabilise the prices of essential commodities.
“Let me thank his excellency Mr. President for graciously receiving me today. I came to intimate his excellency on the affairs of our cement business.
“We have two new lines of 3 million tons each that we will be commissioning by the end of the year.
“So, I explained to him that we want to support the efforts of the government in bringing down the cost of cement.
“By the time these lines are commissioned, BUA Cement will be producing about 17 million tons per annum and with that, we intend to bring down the cost of cement from its current level of N5,000 or N5,500 per bag to maybe N3,000 to N3,500 per bag”, he said.
The BUA chairman, however, clarified that the price reduction should not be expected until after the completion of two new plants of 3 million tons operating capacity his company is building at the end of the year.
However, just 14 days after his earlier announcement, Rabiu made a surprising volte-face when he announced that the planned price reduction of cement to N3,500 originally billed for December has been moved forward to October 2.
“We refer to our previous pronouncements regarding our intent to reduce cement prices upon the completion of our new lines at the end of the year.
“As per the commitment made to reduce prices and following a periodic review of our operations for efficiency, the management of BUA Cement Plc wishes to announce and inform our esteemed customers, stakeholders, and the public that effective October 2, 2023, we have decided to bring the price reduction forward.
“As a result, BUA Cement would now be sold at an ex-factory price of N3,500 per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.
“Upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17million metric tonnes per annum, BUA Cement intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024”, the company stated in a statement on October 1,
Expectedly, the announcement produced a massive shockwave, which ripped through the cement industry, with retailers of the product scampering for safety as a result of market distortion caused by the price adjustment.
Rather than it leading to the crash in the prices of cements as promised, the announcement produced an initial jump in prices of the commodity across the country.
