The second-largest cement producing company in Nigeria, BUA Cement Plc, has refuted claims about any purported increase in the ex-factory price of its cement by N300 per bag.
This is as BUA blames the huge difference between the ex-factory prices of cement and the retail prices of cement on the distributors and retailers who are taking advantage of increased cement demand and insufficient supply to make maximum profits.
This disclosure is contained in a statement issued by the management of BUA Cement and seen on its official Twitter handle on April 25, 2021.
While stating that it had no plans to increase prices of its cement in the near future, BUA, in the statement, noted that the solution to the current situation in the market did not lie in the increase of ex-factory price.
The company reiterated its stand that the timing was not right for any increase in the price of major commodities, stating that work was ongoing towards ramping up production capacity to ensure that commodities like cement remained accessible and affordable for consumers.
What BUA Cement is saying in the statement
The statement from BUA reads, “BUA Cement Plc, in the past two days, has been inundated with calls seeking clarification as to whether it is part of a purported price increase of N300 per bag.
“BUA Cement wishes to inform the public, its distributors, and stakeholders that it has not and does not intend to increase its price of cement now or in the near future, barring any material unforeseen circumstances.
Whilst we are aware that demand for cement is high with current supply levels not sufficient to meet this increased demand, we do not believe the solution lies in an increase in ex-factory price of cement, especially not at this period. It is our strong conviction that any increase in prices of major commodities at a time like this, is not right whilst Nigerians are still trying to recover from the economic consequences brought about by the Covid-19 pandemic – especially for a product for which all raw materials are locally sourced.
BUA Cement is very much aware of the fact that there is a huge difference in the ex-factory prices of cement and the retail market prices of cement, which is mostly because of retailers taking advantage of increased cement demand to make maximum profits. Thus, any increase in ex-factory prices will be inadvertently passed down to the consumers.
We stand by our previous statements that the timing is not right for any increase in the price of major commodities whilst we work towards ramping up our production capacity to ensure that commodities like cement remain accessible and affordable to our consumers.
BUA Cement, therefore, wishes to restate that it is not a part of the purported increase in cement prices and we once again enjoin and appeal to our distributors, who have been advised to ensure there are no further arbitrary increases or excessive profit-taking in the retail price of cement.”
What you should know
BUA Cement Plc is a publicly quoted company that produces and markets cement products across the country. It is the second-largest producer in Nigeria after Dangote Cement.
It was formed through the consolidation of the cement interest of the BUA Group, promoters of Obu Cement Company, and the Kalambaina Company majority owned Cement Company of Northern Nigeria.
The company was listed on the Nigerian Stock Exchange in January 2020 with a market cap of $3.2 billion and proposed a N70 billion dividend for the period ended December 31, 2020.
25th April 2021
BUA CEMENT DISSOCIATES SELF FROM PURPORTED INCREASE IN EX-FACTORY PRICES OF CEMENT.
BUA Cement Plc, in the past two days, has been inundated with calls seeking clarification as to whether it is part of a purported price increase of 300Naira per bag.
— BUA Group (@BUAgroup) April 25, 2021