BUA Cement, a leading cement maker led by Nigeria’s second-richest man Abdul Samad Rabiu, has announced a significant reduction in ex-factory cement prices, effective Oct. 2, 2023. This is expected to benefit consumers and reshape the industry’s competitive landscape.
The price cut, which brings the cost of BUA Cement down to N3,500 ($4.55) per bag, marks a strategic shift in the company’s pricing strategy.
This decision comes just one month after Rabiu, who leads the BUA Group, a rapidly expanding manufacturing conglomerate in Africa, expressed optimism regarding the completion of two new cement factories by the year’s end, which he believed would lead to a reduction in cement prices.
In a statement released on Nigeria’s Independence Day, Oct. 1, BUA Cement announced: “As per the commitment made to reduce prices and following a periodic review of our operations for efficiency, the management of BUA Cement Plc wishes to announce and inform our esteemed customers, stakeholders, and the public that effective Oct. 2, 2023, we have decided to bring the price reduction forward.”
“As a result, BUA Cement would now be sold at an ex-factory price of N3,500 ($4.55) per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants,” the company disclosed in a press release signed by the management.
BUA Cement also disclosed that once the ongoing construction of its new plants is completed, increasing production volumes to 17 million metric tonnes per annum, the company will undertake another price review in line with its earlier pronouncements by the first quarter of 2024.
While this price reduction could potentially impact BUA Cement’s revenue per tonne, it is expected to bolster the company’s market share significantly. Leveraging its increased production capacity, BUA Cement aims to capture a larger portion of the cement market, which could translate into a substantial surge in the group’s revenue and earnings.
Under the leadership of Rabiu, BUA Cement presently boasts a total installed capacity of 11 million metric tonnes per annum, positioning itself as Nigeria’s second-largest cement producer. However, it still trails Dangote Cement, which maintains an extensive production capacity of 51.55 million tonnes annually across ten countries.
Recent financial reports from BUA Cement indicate a notable four percent increase in profits, rising from N63.62 billion ($82.01 million) in the first half of 2022 to N61.36 billion ($79.1 million) at the close of the first half of 2023.
This resilient financial performance is attributed to a remarkable 17-percent surge in the group’s revenue, which increased from N188.56 billion ($243.1 million) in the first half of 2022 to N221.06 billion ($284.9 million) in the corresponding period of 2023.
