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BUA Cement Chairman Abdulsamad Rabiu has disclosed how his company's attempt to reduce cement prices to ₦3,500 per bag was thwarted by unscrupulous dealers.
During the 8th Annual General Meeting on Thursday, August 29, Rabiu detailed how the dealers exploited the company's price reduction policy to gain profit.
Rabiu explained that many dealers failed to pass on the savings to customers despite BUA Cement's decision to lower prices. Instead, they capitalised on the situation, inflating prices to as much as ₦7,000 or ₦8,000 per bag while purchasing from BUA at ₦3,500.
"A lot of the dealers took advantage of that policy. Rather than pass the low prices to the customers, they were selling at even double the price we sold to them," Rabiu stated.
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Naira devaluation effect
The chairman further noted that the manipulation was so widespread that BUA had already sold over a million tons of cement at the reduced price before realising the extent of the issue.
He revealed that external economic factors, including the devaluation of the naira and the removal of the fuel subsidy, also contributed to the pricing policy's unsustainableness.
Rabiu emphasised, "We wanted that price to stay at that level, but dealers refused. So, we could not sustain that simply because we did not want to be in a situation where we are subsidising dealers."