BUA Cement Plc, a renowned cement maker led by Nigeria’s third richest man, Abdul Samad Rabiu, revealed a critical difficulty in the cement sector during the company’s 8th Annual General Meeting.
He ascribed the increase in cement pricing to the actions of middlemen in the supply chain. Despite BUA Cement’s efforts to keep pricing stable at N3,500 per bag, these intermediaries have substantially increased rates, with consumers paying as much as N7,000 to N8,000 per bag.
Rabiu revealed that, while his company sold over a million tons of cement at the targeted reduced price, dealers took advantage of the chance to raise their profit margins.
“We introduced the N3,500 price as part of our commitment to make housing more affordable,” Rabiu told lawmakers. “However, the greed of middlemen has significantly undermined this initiative.”
The chairman emphasized that rising prices have larger consequences for the housing market and affordability.
“When the base cost of cement doubles, it affects all aspects of construction and ultimately, the cost of housing,” remarked the architect.
Rabiu also acknowledged external economic forces that exacerbated the pricing issue, such as the naira’s depreciation and the elimination of gasoline subsidies, making the low-price policy unsustainable.
“We had to adjust our strategy because continuing the policy under these conditions would essentially mean subsidizing the profit margins of dealers, not aiding consumers,” according to him.
In response to these issues, Rabiu advocated for stricter regulation and supervision of the supply chain to guarantee that future pricing plans do not fall victim to similar exploitative activities. He underlined the importance of using a collaborative strategy that involves all stakeholders in order to address the issue efficiently and sustainably.
Rabiu reiterated BUA Cement’s commitment to affordable homes, but emphasized that accomplishing this goal will be difficult if middlemen’s negative behaviors are not controlled.
BUA Cement, Nigeria’s second-largest cement producer and a vital subsidiary of the BUA Group, continues to play an important role in the industrial sector. Rabiu, who owns 97.67 percent of BUA Cement, is one of Africa’s richest billionaires, with $5.2 billion.
