The management of BUA Cement Company has provided an explanation for the apparent failure to sustain its promised ex-factory price of N3,500 per 50kg bag of cement for end-users. While acknowledging that it initially honored the pledge to reduce the price, the company has squarely blamed intermediaries and wholesalers for obstructing the intended beneficiaries from accessing the discounted rate.
The controversy surrounding BUA Cement’s pricing strategy resurfaced recently when civil society organizations threatened to picket the company for failing to deliver on its commitment to Nigerian consumers. This move came after reports that cement prices had skyrocketed to an unprecedented N12,000 to N13,000 per 50kg bag, casting doubts on the purported reduction initiated in October 2023.
In response to the impending protests, Mr. Timothy Sogbeinde, who oversees Creatives & Visual Identity management at BUA Group, stated that the company had indeed honored its promise to sell cement at N3,500 per bag for several months before discontinuing the offer. His remarks came in the wake of a seven-day ultimatum issued by two civil society groups, demanding that the company either sell cement at the promised N3,500 per bag or face picketing.
Sogbeinde’s assertion was corroborated by BUA’s Executive Director, Mr. Kabir Rabiu, who revealed that the company had sold cement at the reduced price of N3,500 for three to four months. However, Rabiu acknowledged that BUA was unable to sustain the discounted price due to the actions of intermediaries and wholesalers, who prevented the intended end-users from benefiting from the reduced rate.
“We thought other players in the cement industry would join us in making the price of cement affordable,” Rabiu explained, indicating that BUA had anticipated a broader industry-wide effort to make cement more accessible to consumers.
The company’s decision to temporarily implement the N3,500 ex-factory price was prompted by its earlier promise to reduce prices upon the completion of new production lines at the end of 2023. This move was intended to spur development in the building materials and infrastructure sectors, as announced by BUA Cement in October 2023.
At the time, the company had issued a statement on its official social media account, affirming its commitment to reviewing pending and undelivered orders, which had been paid for at the old prices, downwards to N3,500 per bag, effective from October 2, 2023. BUA had also cautioned its licensed dealers to ensure that end-users benefited from the reduced ex-factory prices, warning that field sales would be monitored for compliance.
However, the subsequent surge in cement prices to unprecedented levels raised questions about the effectiveness of BUA’s price reduction initiative and its ability to fulfill its commitment to Nigerian consumers.
As the controversy escalated, civil society organizations stepped in, issuing a seven-day ultimatum to BUA Cement, demanding that the company either sell cement at the promised N3,500 per bag or face picketing actions.
In response, BUA Cement has maintained that it did indeed honor its pledge for several months but was ultimately forced to discontinue the discounted price due to the actions of intermediaries and wholesalers, who prevented end-users from accessing the reduced rate.
The company’s explanation highlights the complex dynamics of the cement industry supply chain and the potential challenges faced by manufacturers in ensuring that price reductions are effectively passed on to end-users. As the debate continues, both consumers and industry stakeholders will be closely monitoring BUA Cement’s actions and the potential impact on cement affordability in Nigeria.
Source BUA Blames Wholesalers For Preventing Nigerians From Buying Cement Bags For Approved N3500. Published in Sahara reporters.