Table of Contents
Key Points
- BUA Cement Chairman Abdul Samad Rabiu attributes high cement prices to middlemen exploiting the supply chain.
- Rising cement costs severely impact Nigerian families, halting construction and exacerbating the housing crisis.
- Community advocacy is growing as citizens demand transparency and regulation to combat unfair pricing practices.
BUA Cement Plc, a leading cement manufacturer led by Nigeria’s third-richest man Abdul Samad Rabiu has revealed a critical challenge in the cement industry during the 8th Annual General Meeting of the company.
He attributed the rise in cement prices directly to the actions of middlemen in the supply chain. Despite BUA Cement's efforts to stabilize prices at N3,500 per bag, these intermediaries have inflated the costs dramatically, with consumers facing prices as high as N7,000 to N8,000 per bag.
Rabiu explained that while his company had sold over a million tonnes of cement at the intended lower price, the benefits meant for end-users were usurped by dealers who saw an opportunity to increase their profit margins.
"We introduced the N3,500 price as part of our commitment to make housing more affordable," Rabiu stated. "However, the greed of middlemen has significantly undermined this initiative."
The chairman highlighted that the escalation in prices has broader implications 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," he noted.
BUA's response and the call for regulation
Rabiu also acknowledged external economic pressures that compounded the pricing issue, such as the devaluation of the naira and the removal of fuel subsidies, which made it unsustainable to continue the low-price policy.
"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," he clarified.
As a response to these challenges, Rabiu called for tighter regulation and monitoring within the supply chain to ensure that future pricing strategies do not fall prey to similar exploitative practices. He emphasized the need for a collaborative approach involving all stakeholders to address the issue effectively and sustainably.
Rabiu reiterated BUA Cement’s commitment to affordable housing but stressed that without controlling the detrimental actions of middlemen, achieving this goal remains a formidable challenge.
BUA Cement, Nigeria’s second-largest cement maker and a key subsidiary of BUA Group, continues to play a key role in the industrial sector. Rabiu, who owns a 97.67-percent stake in BUA Cement, is one of Africa’s richest billionaires with a fortune of $5.2 billion.
