Cement sellers defy BUA’s price slash announcement, sell at old price of N5,500 per 50kg bag

Cement marketers in the Southwestern part of the country have refused to adhere to the recent price reduction of the product announced by the management of BUA Cement, Business Hallmark can report.

The cement manufacturer, it would be recalled, had in a statement last week, announced that from Tuesday, October 2, 2023, it will slashed the ex-factory price of the commodity by 30 percent, with a bag selling for N3,500 per bag.

However, BH findings showed that the price of BUA branded cement had largely remained the same in the South West, especially in Abeokuta, Osogbo, Ibadan and other states capital.

For instance, while cement traders in Lagos have continued to sell the BUA brand for between N5,100 and N5,400, the brand goes for an average of N5,400 in Ibadan, the Oyo State capital.

In the same vein, the BUA cement brand sells for N5,450 in Osogbo, N5,500 in Akure and N5,500 in Ado-Ekiti on the average, contrary to the expectations of many buyers that they will get the product a the reduced rate recently announced by the BUA management.

Reacting to the development, some cement traders who agreed to speak on the matter described the announcement of price reduction by BUA as a mere media propaganda.

According to the traders, the announcement has failed to to have direct effect on the price of the product, maintaining that it will take more than words of mouth to effect a noticeable price crash.

A major cement distributor in Agege, Lagos, Alhaja Shakira Folarin, said the cement manufacturer (BUA) only played to the gallery when it announced the price slash.

According to Folarin, there is a wide gulf between the ex-depot price of cement and the actual market price.

“Let’s even agree that BUA gives out a bag of cement at the rate of N3,500. But does that mean that the real market price should also be N3,500 as those ignorant of how the cement and commodities market works would like to believe?

“For those who don’t know, BUA has two cement plants, one in Kalambaina, Sokoto State and the other in Obu, Okpella, in Edo State.

“The nearest of the plants to Lagos is Obu in Edo State. While BUA is responsible for getting the products to its depots in Lagos and the South West states for major distributors to pick up, distributors are responsible for the cost of moving the cements from BUA depots to their warehouses.

“The least you can get a flatbed trailer than can convey maximum 12 tons (240 bags) of cement at a go is N400,000. If you divide N400,000 by 240 bags of cement, that gives you N1,667.

“Add N1,667 to the sum of N3,500 BUA is selling to us, you will get N5,157 per bag. Already, the amount is above the N5,000 mark, despite the fact that we have not added other costs like carriers/loaders fee, warehousing costs and traders’ margins.

“We pay a loader/carrier the sum of N100 for every bag of cement he can offload. That is another N24,000 on a trailer load of cement and N100 on each bag.

“You can now see why the price of a bag of cement will continue to hover around N5,500 for now despite the price reduction announcement by BUA.

“For Nigerians to see a remarkable crash in the price of cement, manufacturers must further bring down the ex-factory price of the product, or there is a major crash in transportation cost”, Alhaja Folarin explained.

Also speaking on why cement price is still high in the city, a cement seller in Apata, Ibadan, Toyin Abodunrin, explained that contrary to the announcement by BUA, sellers don’t get the product from distributors at the rate of N3,500.

“How do Nigerians want us to sell at N3,500 since we are not buying at the rate? The last consignment I bougth was at the old rate as my distributor told me that his price had not changed.

“Yes, you can buy at the rate of N3,500 as a distributor when you go to Sokoto or Edo State where I learnt the company has its plants. But you will need to hire a trailer to bring the products to your warehouse. I hope you know the cost of diesel now, so you will be spending more than two thousand naira on transportation and you know that our roads are not good.

“The distributors sell to us at N5,000 or N5,100. So, as retailers, can we sell at the rate of N3,500. The price now is N5,300. It is even more expensive than other brands because it is scarce. That is why we want the media to help us tell Nigerias that we cannot sell at N3,500”, Abodunrin pleaded.