FG, BUA In Talks To Reduce Cement Price

The federal government and Chairman, BUA Cement PLC Abdul Samad Rabiu would be holding talks centering on reduction in price per bag of local cement in Nigeria.

The meeting at the instance of BUA Chairman, would entail him, meeting with Minister of Works, Senator Dave Umahi on strategies to reduce price of Cement in the country.

The two parties will take a holistic assessment of local cement production in the country, and what to be done to reduce the price.

This is against the backdrop of federal government decision to explore importation as option to beat rising cost of locally manufactured cement. A bag of cement currently sells between N5000 and N5, 100.

Speaking with journalists yesterday in Abuja at 7th Annual General Meeting ( AGM), Rabiu said local cement is cheaper than imported cement.

He elaborated plans by his firm to reduce cost of cement per bag effective from December this year when two plants lined up would come up. BUA Cement, he said will collaborate, work with government in achieving reduced cost of cement.

” I appreciate where the government is coming from. I can understand the frustration from all the issues we are having in the country. The price of cement is under N5000 per bag in Nigeria; is not really very high if you look at the rate of the dollar. To import into Nigeria today will be almost N5, 000 per bag. The cost of cement, CIF to any of the ports in Nigeria will be in the region of around $100 today per tonne and that is something that can be ascertained. But then you have the protocols-;the transportation from the ports to wherever you are taking them to. It’s not that the government wants to import cement, it’s just that they are frustrated that the price of cement is high”.

What I am going to do? what I told my shareholders is that, we will support the government because even though we know the price of cement is high, it cannot be cheaper if we import. But what we want to do is , because we have two lines that are coming on stream by the end of the year; Obu line3 and the Sokoto line7, which will give us a combined capacity of 6million tons and then by the time we have those two lines , we will be having a combined volume of 17million tons. So, what we want to do, is to support the government. Sit down with the minister to see how we can bring down the price of cement once we have those two lines up and running by the end of the year”.

“Am happy to support the government once these two lines are up and running. I can assure you that we’ll do everything to support the government and to support Nigerians. It is true that the price of cement is high maybe because of the devaluation issue that we are having in the country now, hence the reason why we decided that we are going to support and bring down the price of cement. This is the promise from myself. I know my price expertise is about N4000 and N4, 300 per bag. The target is to reduce that substantially when we start regardless of what other costs are. I will engage the minister and we are not doing that because we are worried that the government will allow imports because we know that imports will not be any cheaper. We are going to do that because we want to support the government and we want to support Nigeria and Nigerians. The reason why we want to wait until when we have the two lines that are going to come on stream by the end of the year, is simply because we will have additional volumes so that if we reduce the price, 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. If you have the volume and you reduce your price, and with the huge volumes that we have the price must come down”.

Rabiu said that with strategy mapped by BUA Cement, other cement firms would have no choice but to reduce cost of cement.

” If others are not ready to support the government, to support the reduction of the price of cement they will be compelled because if they don’t reduce they will not be able to sell. That is why we are going to wait till the end of the year when these two lines are on stream. I will discuss with the minister and see how we can do that”, he assured.

He said BUA Cement had gone green as its energy source, describing it the best to go.

” We are using more energy now than coal and we will continue to do that. It is important to go green because you have all the issues of climate change and what have you. It is not easy to go completely green especially if you are in Africa. To go completely green is not going to be easy, it is going to be a process and we have started that we are using NLG in Sokoto, which means that we bring in the NLG from P/Harcourt, so we are using less fossil, we will continue to do so but it will take a bit of time before”.

The firm recorded 40 per cent increase in its revenue within the last one year . Its Profit after Tax rose by 12.1 per cent to N101 billion in comparison to N90.1 billion recorded in 2021,” Mr Rabiu said.
It earnings per share recorded growth of 12 per cent to N2.98 from N2.66. The company’s board of Directors proposed total dividend of N2 . 80 per ordinary share compared to N2 .60 per share in the previous year.