Despite the promise of a price reduction, the price of BUA Cement still retails at the old price between N5,300 and N5,500 in Lagos, according to findings by Nairametrics.BUA Cement Plc through its Group Chairman, Abdul Samad Rabiu, announced a reduction in the ex-factory cost to N3,500 for every 50kg bag, starting from October 2, 2023.
He said this after a meeting with President Bola Tinubu at the State House, Abuja on Friday, September 15, 2023. recentlyOne week after it was expected to take effect, the revised price is yet to be implemented, with reports from several retailers and cement distributors confirming that the price remains unaffected.
Narametrics conducted a market survey on 17 cement retail stores in the Ikorodu region of Lagos revealing that BUA cement is presently available at prices ranging from N5,300 to N5,500 per bag.
News continues after this adWhat Retailers Are SayingWhen we inquired why the current retail price of BUA cement deviates from the price announced by the manufacturer, cement retailers noted that the costs of raw materials and production had not changed significantly enough to justify such a substantial reduction.
A cement vendor located at Parafa, Ikorodu, revealed that even though he heard about the announcement, the current price from the distributors remains the same.
According to this vendor, the prices are yet to trickle down to the retailers due to logistics as well as other operating costs on the part of the distributors.News continues after this adHe stated.
“Truly, we heard that the price of BUA cement has been reduced to N3,500 per bag, however, that is most likely the price sold at the cement factory located in Okpella, Edo State.
“As cement retailers in Lagos, when you factor in the logistics costs of bringing the product down here (Lagos), along with other costs, the price goes up”.
The retailer, who sells at the rate of N5,400, also noted that BUA cement is not a competitive cement in Lagos compared to contemporaries such as Dangote and Elephant Cement.
Responding to the same question on why the price remains the same at the market, another retailer, whose depot is located beside Taramed Filing Station, Ikorodu, explained to Nairametrics that the prices have not reflected on the side of the distributor, forcing them to buy at the old price rate between N5,300 and N5,500. She stated,“
There is the issue of the cement stock sold at the reduced price not being sufficient to meet the demand for the product.“And because of this, the distributors of BUA cement aren’t able to readily provide us with the quantity of cement we need.
“The delay in getting our cement stock also contributes to the addition to the retail price of the cement”.
Meanwhile, the same seller alleged that the announcement might only be for optics, citing that BUA might be attempting to “gain public favour with the announcement.”She stressed that ever since the announcement of the reduction in the price of BUA cement, people have asked for the cement. However, they become disappointed when they find out that the price is still the same.
“I don’t think the manufacturers intended to truly slash the price of the cement, instead, I think the announcement of price reduction was to gain favour from the public and make the cement more popular,” she added.The third cement dealer located at Marvelous Estate, Itokum Road pointed out the patronage of BUA cement is rather low in the rainy season due to the time it takes to consolidate when used in making bricks.
According to her, people prefer to opt for other products during the rainy season.What You Should KnowBUA Cement Plc made an announcement last week regarding its decision to reduce cement prices to N3,500 per bag, starting from October 2nd, 2023.
The cement giant disclosed this via a press release on its official X (formerly Twitter) account as seen by Nairametrics.Here’s an excerpt from the press statement:
“We refer to our previous pronouncements regarding our intent to reduce cement prices upon the completion of our new lines at the end of the year, to spur development in the building materials and infrastructure sectors.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 3,500 Naira per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.”
Meanwhile, prices in the retail market do not reflect the stated price by the company a week after the announcement.At the time of this publication, Nairametrics attempted to obtain clarification by contacting BUA Cement Plc via email, the company has remained unresponsive and has not offered any comments or responses regarding the deviation from the initially announced N3,500 retail price.