BUA plans cement price crash as Obu,Sokoto plants near completion

By Onome Amuge. 

AbdulSamad Rabiu, chairman of BUA Group,has assured Nigerians that the completion of the company’s Obu Line 3 and the Sokoto Line 5 cement plants by the end of the year would lead to a reduction in the price of cement across the country.

Addressing journalists  on the sidelines of the company’s seventh annual general meeting held recently in Abuja,Rabiu said  that the two production lines will give a combined capacity of six million tonnes,boosting the company’s total production capacity to 70 million tonnes per annum.

This, he noted, would boost availability of the product and consequently drive down prices.

The BUA chairman explained that the planned price reduction is in a bid to support the economic plans of the federal government to drive down the price of cement in the country.

Dave Umahi, the newly appointed minister of works, had in a television programme, expressed displeasure over the hike in cement prices.

Umahi  said contractors had complained over the high cost of cement in the country and made claims that importing the product would be cheaper.

To address the situation, the minister said he would dialogue with cement manufacturers over reducing the prices of their products.

In response to the minister’s statement, the BUA Cement chairman argued that though the price of cement is high, it will not be cheaper if imported.

He said, “I understand that the minister is quite concerned, that the price of cement is high at almost N5,000 per tonne. I appreciate where the government is coming from and the frustration from all the issues in the country.

“The price of cement at N5,000 is not high. If we look at the rate of the US dollar today, importing cement will be at N5,000. The cement cost, insurance and freight to any port in Nigeria will be in the region of about $100 a tonne. So, at $100 per tonne, if you take N800 to $1 then it will be N4,000 per bag. Then the port cost, and transportation from the port.

“It’s not that the government wants to import cement, but they are frustrated that the price of cement is high. What we told our shareholders is that we will engage with the government to support it.”

Rabiu disclosed that  BUA Cement is currently increasing its production capacity to enable it drive down prices, oscillating between between N4,500 and N4,800, depending on the location.

“The idea of increasing production capacity is to see how we can be able to drop prices on our part to support the government’s efforts because importation will not be the best solution,” he explained.