Some cement retailers in Lagos state and Ogun state have given reasons BUA Cement products are still sold above N5,000 per bag despite the company announcing a 36.4 percent cut in price on October 1.
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.
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.
However, three weeks later, the price of BUA’s cement has remained above N5,000 in some retail stores in Lagos and Ogun state.
Speaking to Olubukola Oluwadare, a cement retailer in an area in Ikorodu, Lagos, she 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.
Oluwadare told TheCable that she partnered 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 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 offloaders 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 buy their market, they will lose 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 didn’t respond to enquiries sent to the company.