At the 8th Annual General Meeting of BUA Cement in Abuja, Chairman Alh. Abdul Samad Rabiu disclosed how the company’s N3,500 per bag policy was undermined by dealers.
The policy, introduced last year, aimed to make cement affordable by selling over a million tonnes at N3,500 per bag to dealers. However, the dealers exploited the situation, selling to consumers at prices as high as N7,000 and N8,000 per bag.
Rabiu explained that BUA Cement intended for the benefits of the low price to reach end-users, but the dealers’ actions made the policy unsustainable.
The company was forced to discontinue the initiative as it became clear that it was indirectly subsidising the dealers. Despite the Naira devaluation and the removal of fuel subsidies, which further complicated the situation, BUA Cement struggled to maintain price stability in an increasingly volatile market.
The chairman noted that despite these challenges, the company continued its efforts to prevent significant price hikes, ensuring that cement prices did not escalate in line with the percentage increase in the Naira’s devaluation.
Rabiu highlighted that energy costs, which are dollar-denominated, have significantly impacted production expenses, with one of BUA’s plants now incurring monthly energy costs of up to N16 billion Naira, a sharp rise from previous costs.
According to the financial report presented by the board, BUA Cement recorded a 27.4% revenue growth, reaching N460 billion in 2023.
However, the devaluation of the Naira and increasing inflation led to a 39.5% rise in production costs, amounting to N276 billion. Despite these financial pressures, the company reported a net profit after tax of N69.5 billion and declared a N2 dividend per share.
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