The Chairman and Founder of the BUA Group, Alhaji Abdulsamad Rabiu, has attributed the high price of cement and sugar in the country to higher demand over supply of the product.
Speaking to reporters in Lagos, Rabiu explained that the price of cement, which presently sells for about N4,000 per bag, remains high in Nigeria because the few producers are not able to meet the country’s huge demand.
“That is a simple economics of supply and demand,” he said, just as he faulted the belief that the country is self-sufficient in cement production.
“That is a simple economics of supply and demand,” he said, just as he faulted the belief that the country is self-sufficient in cement production.
The billionaire explained: “Look at the numbers: Nigeria is over 200 million people today in terms of population. If you look at the production of cement, last year, we were under 30 million metric tonnes.
“In fact, last year was higher than the year before, which means that in 2019, we were doing between 26 and 27 million metric tonnes. I am talking about production, and not installed capacity, which is another thing entirely.
“Nigeria’s 200 million people make it about 130 kilograms per head. If you check, you will see that most countries in Africa are doing between 170 kilogrammes to 200 kilogrammes per head.
“So, Nigeria is actually producing less than other countries in Africa, apart from maybe Niger Republic. So, that means that we do not have enough capacity.”
According to Rabiu, whenever any of the plants of the few players in the industry develops a fault, the impact is immediately felt on the price of the commodity, which is passed on to buyers of the product.
According to him, “The moment you have any problem in any of the plants in Nigeria and there is a shut-down or any challenge, immediately, you will see the impact in terms of price going up.
“That is because we do not have any buffer whatsoever. So, it is like hand to mouth daily. The reason why the price of cement went up recently was simply because the was an issue at one of Lafarge’s plants and they had to stop production for few months to rectify that.
“So, as that had happened, the supply from Lafarge reduced by about 25 per cent in Ogun State. Also, one of the plants of Dangote Cement had a technical issue and briefly, they couldn’t load. But that has been resolved.
“But because that took about one month, the price of cement went up to about N4,000, from N2,800.”
The chairman went on to promise that he will reduce the price of cement and sugar produced by BUA if other companies do the same.
“Today, I am ready to reduce my cement and sugar prices, if other companies are ready and I challenge them. If you are posting 50 per cent as profit, and Nigerians are paying for that, why can’t you make 25 per cent profit, so that instead of N4,000, they would be paying N2,000 per bag of cement, and it can happen,” Rabiu said.
