BUA Cement Plc has slashed its ex-factory price for a bag of cement to N3,500, from about N5,000 previously.
The new price, which was announced yesterday, by the management of BUA Cement in a statement titled, “Reduction in Prices of BUA Cement,” would take effect all over the country from today.
The management also pledged to cut down the price of the product further by first quarter of 2024, when it would have increased its production capacity to 17 trillion metric tonnes per annum.
BUA Cement added that all pending undelivered orders, which had been paid for at the old prices, would be reviewed downwards to N3,500 per bag in line with the new pricing from October 2, 2023.
The company explained: “We refer to our previous pronouncement regarding out intent to reduce cement prices upon the completion of our new lines at the end of the year in order to spur development in the building materials and infrastructure sector.
“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 October 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 per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.”
The management of BUA Cement also stated that, “upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17 million metric tonnes per annum, BUA Cement Plc intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024.”
It added that, “all pending, undelivered orders which had been paid for at the old prices will be reviewed downwards to N3,500 per bag in line with the new pricing from October 2, 2023.
“Our licenced dealers are also enjoined to ensure that end-users benefit from this reduction in ex-factory prices as we will monitor field sales to ensure compliance.”
The Chairman of the BUA Group, Abdul Samad Rabiu, hinted recently that Nigeria might experience a significant drop in the price of cement in the short term.
Rabiu had said: “I appreciate where the government is coming from that the price of cement in Nigeria is high at almost N5,000 per bag. What do I intend to do? What I told my shareholders is that we will engage with the government because we know that the price of cement cannot be cheaper if we are to import cement today.
“We have two lines that are coming on stream by the end of the year: The Line 3 and Sokoto Line 5, which will give us the combined capacity of six million metric tonnes (mmts). And by the time we have those two lines we will be having about 17 million metric tonnes per year.
“So, what we want to do is to support the government by sitting down with the minister to see how we can bring down the price of cement once we have these two lines up and running by the end of the year.
“I am happy to support the government and we are going to reduce the cost of cement once these two lines are up and running. It is true that the price of cement is high now but that may simply be because of the devaluation (of the naira) and all the issues that we having now in the country.
“We are going to bring down the price of cement. This is a promise. Our ex-factory price of cement currently is about N4,000 or N4,300 per bag. The target is to reduce that substantially. We will do that. And we are not doing this because we are worried or concerned that government will allow importation of cement because we know that import is not going to be any cheaper.
“The reason we have to wait until the two lines come on stream by the end of the year is simply to have additional volumes so that we can reduce the price, and even if others have not agreed to reduce the price, the market will compel them to come down because if you do not have enough volumes and you reduce the price the market may not take it.”
“But if you have the volume and you reduce your price with the huge volume that you have price must come down. Even if others are not ready to support the government they will be compelled because if they do not reduce they won’t be able to sell. That is why we want to wait till the end of the year when these two new lines are on stream. I will discuss with the minister and see how we can do this.”