Contrary to expectations of relief in the volatile cement market in Nigeria following a reduction in the price of BUA cement, findings have shown that the product is not only scarce, but also yet to reflect the new price where available.
The management of BUA Cement, on Sunday, October 1, announced a reduction in the ex-factory price of its cement from ₦5,500 to ₦3,500, adding that the new price would commence take effect on Monday, October 2.
The announcement came a couple of weeks after Abdul Samad Rabiu, the company’s chairman, met with President Bola Tinubu and promised to review the price of the product. This move followed the company’s earlier hint on reducing cement prices upon the completion of its new lines at the end of the year, in order to spur development in the building materials, housing and infrastructure sectors.
Builders and other operators in the housing sector hailed the move, describing it as a courageous step towards stemming the tide in the building materials market, and also increasing affordability and home access by the country’s army of low-income earners.
A survey of the price of the product in different markets across the country, however reveals that the commodity still goes for the old price of N5,600 depending on location. And that is where it is available.
In the three major cities of Nigeria—Lagos, Abuja and Port Harcourt, nothing new has happened, according to our survey.
In Lagos, in over eight markets surveyed across four locations—Adeniji Adele in Lagos Island, Ketu in Ojo, Ikotun-Egbe in Alimosho, and Suru Alaba in Ajeromi Ifelodun, the product was nowhere to be found. However, a dealer in Festac Town who had the stock told our reporter that he was selling at the old price.
In Ojo, the dealer who identified himself simply as Sebastine, said Dangote, Purechem and Elephant brands were available in the market, but BUA was not. “It means the price reduction is a mere story. The prices of Dangote remain N5,200. Elephant cement goes for the same price,” he said.
Continuing, he said, “BUA has announced price reduction when its products are not in the market. This has affected the market a little as demand for cement generally has dropped because activity at construction sites hads slowed down because people are waiting for the new price to take effect.”
Another dealer, who introduced himself as Thomas, said a bag of Dangote cement sold for N5,200 in Lagos right now, adding, “though BUA says it has crashed price to N3,500, their nearest factory is in Edo State and when we calculate the cost of loading and offloading as well as haulage, particularly now that the prices of diesel is over N1,000, we that are in Lagos can only sell between N5,050 and N5,100 if we add up the cost of bringing it to Lagos from Edo.”
Thomas warned that cement dealers should be careful not to fall into the hands of fraudsters in the name of looking for cheap alternative. He cited an example of a woman paid for three trailer loads of BUA cement to an unknown people for them to bring the cement to Lagos for her, only for them to take off with her money.
“This is why most of us only deal with Dangote that is close to us. It will probably benefit those people within the South-South and some in the South-East states to buy from BUA,” he said
In Abuja, Monday Okafor, a major distributor at the Nyanya area of the city, told our reporter that the price reduction had not been effected, adding that both BUA and Dangote brands were available but selling at old prices.
In Port Harcourt, distributors don’t have the product in stock, according to our reporter who surveyed the building material markets in the Garden City, adding that other brands, particularly Dangote, was still selling at old price of N5,600/bag.
Our reporter in Benin City found out that the market was yet to see the new price as announced by BUA. Osagie Imafidon, a dealer in Benin City, said the price of BUA cement still remained between N4,300 and N4,500, adding that he was yet to get new stock.
Similarly, Aminu Mohammed, a dealer at Jattu in Etsako West local government and Dauda Ishaku from Auchi said the price of BUA still remained the same. Aminu said he bought the product from one of the major dealers on Monday at N4,300.
At building material market at Ojike Lane, Aba, a BUA distributor told our reporter that he was yet to get supply at the new price, disclosing that he still had old stock and would comply with the new price regime when they got new supply at the new price.
BUA Cement is Nigeria’s second-largest cement company, with a current installed capacity of 11 million metric tonnes per annum. The company aims to reach 17 million metric tonnes annually by completing two new plants in Edo and Sokoto by early 2024.
The company has promised that “upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17million metric tonnes per annum, BUA Cement intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024.”