BY TIMOTHY AGBOR, FESTUS OKOROMADU AND BRIGHT JACOB
Nigerians have expressed displeasure following the continuous sale of BUA Cement products at over N5, 000 per bag despite the firm’s announcement that the price has been reduced to N3, 500.
A survey on the price of the product in different markets in several states – Lagos, Ogun, Edo, Abia, Abuja and Port Harcourt, however, revealed that the commodity was still being sold at the old price of N5, 600
In Lagos, in over eight markets surveyed across four locations — Adeniji Adele in Lagos Island, Ketu in Kosofe, Ikotun-Egbe in Alimosho, and Suru Alaba in Ajeromi Ifelodun, some dealers said they did not have the product.
A dealer in Festac Town said that he was selling the product at the old price.
Another dealer, who introduced himself simply as Thomas, said, “Though BUA says it has crashed price to N3, 500, their nearest factory is in Edo State and when we calculate the cost of loading and off loading as well as haulage, particularly now that the price of diesel is over N1, 000, we that are in Lagos can only sell between N5, 050 and N5, 100 if we add up the cost of bringing it to Lagos from Edo.”
In Abuja, Monday Okafor, a major distributor at the Nyanya area of the city, noted that the price reduction had not been effected, adding that both BUA and Dangote brands were available but selling at old prices.
In Port Harcourt, some distributors said they did not have the product in stock.
In Benin City it was found out that the market was yet to see the new price as announced by BUA.
Osagie Imafidon, a dealer in Benin City, said the price of BUA cement still remained between N4, 300 and N4, 500, adding that he was yet to get new stock.
Aminu Mohammed, a dealer at Jattu in Etsako West local government and Dauda Ishaku from Auchi, said the price of BUA Cement still remained the same.
He said he bought the product from one of the major dealers at N4, 300.
At the building material market at Ojike Lane, Aba, a BUA distributor said that he was yet to get supply at the new price, disclosing that he still had old stock and would comply with the new price regime when they got new supply at the new price.
BUA Cement had disclosed that the ex-factory price of its product will be reduced to N3, 500 per bag from N5, 500, starting from October 2.
The company made the decision after Abdul Samad Rabiu, BUA Cement founder, met with President Bola Tinubu on September 16.
“In Benin City it was found out that the market was yet to see the new price as announced by BUA”
BUA Cement said its ongoing effort to increase production capacity to 17 million metric tonnes per annum (MTPA) before the end of 2023 made it possible for the company to reduce its ex-factory price for licenced dealers and end users.
Builders and other operators in the housing sector hailed the move, describing it as a courageous step towards stemming the tide in the building materials market, and also increasing affordability and home access by the country’s army of low-income earners.
However, about four weeks later, the price of BUA’s cement remained above N5, 000 in some retail stores.
A retailer in the Ikorodu area of Lagos, Olubukola Oluwabunmi said BUA sells the cement at N3, 500 at its factory in Benin, however, retailers will have to visit the production site to buy the product at that price.
According to Oluwadare, BUA Cement representative said the company does not have enough trucks to distribute its products, so retailers have to hire trucks to load the cement.
She said there was a partnership with another retailer to hire a truck, but the cost – N1,000 per bag – discouraged them, so she sells only the Dangote brand.
She said BUA does not have enough lorries, “what they do is within their vicinity there. He even said if I have a Dangote vehicle, that some of them are using it to bring their own down to here (Ikorodu)”.
According to Oluwadare, engaging a truck that belongs to Dangote Cement to load BUA’s products could create an issue.
Oluwadare, who was not comfortable with the suggestion, said hiring a truck meant she would bear the cost of the driver and the off loaders but “when we calculated all the money from that place to here, it is almost N5, 050”.
Another retailer in Ikorodu, who spoke on condition of anonymity, corroborated Oluwadare’s statement on purchasing the product directly from BUA’s factory to get it at N3, 500.
He said, “Transportation alone has covered the whole (discount), you will have to increase your money (price) to like N5, 000 or so.”
The retailer said Elephant brands cost N5,300 and Dangote is N5,400 — yet both brands are distributed to them — but they have to hire a truck, do the work of a distributor to stock BUA’s products and eventually sell them above N5,000.
Abdullateef Abayomi, another cement retailer and block maker, in Alagbole, Ogun State, said the new price can’t take effect immediately because many still have BUA’s cement bought at the previous price.
“If you say it should take effect, people that have already bought their market, they will lose a lot of money (sic). Imagine from N5, 300 to N3, 700,” Abayomi said.
“That’s about N2, 000 of shortage. That is why it has not taken effect.”
He said the new price would most likely take effect by December.
BUA Cement is Nigeria’s second-largest cement company, with a current installed capacity of 11 million metric tonnes per annum.
The company aims to reach 17 million metric tonnes annually by completing two new plants in Edo and Sokoto by early 2024.