Energy, transport pushing up cement prices- BUA’s Rabiu

By Emma Ujah, Abuja Bureau Chief

The Chairman of BUA Cement Plc, Abdul Samad Rabiu, has blamed the skyrocketing prices of cement in Nigeria on energy and transport costs.

He spoke at the 10th Annual General Meeting of BUA Cement in Abuja yesterday.

As of April 2023, a month before the current administration came into power, a 50 Kg bag of cement cost between N4, 700 and N5, 200- depending on the part of the country and the brand of cement.

However, a market survey across the country, yesterday, revealed that the same 50kg bag of cement has jumped to between N11, 600 and N12, 500, depending on the distance of the sales point from cement factories.

Rabiu said cement companies were faced with spending huge sums of money to generate their own electricity, as well as, the high cost of diesel for their trucks to transport their products from factories to the market.

His words, “We do everything to make cement affordable to the public but some factors are beyond our control. We spend a lot of money to generate our own electricity. The price of diesel has gone up very much.

“The Middle East War has also exacerbated the situation of fuel, as we all know. Don’t also forget that the Naira devaluation has affected the entire prices of the chemicals we import for cement production.

“The Naira unification policy of the CBN has affected the value of the Naira but it is a good decision because it has eliminated the distortion in the market. Before now, anyone connected could obtain FX from the CBN and come out to sell at a margin. That is no longer the case. We can now access FX and can now plan. This is good for business. This is what we need.”

Also speaking at the post-AGM briefing, the Managing Director, Yisuf Binji, said the prices of cement were reflective of input costs, especially with escalating prices of energy and transportation, which he revealed account for half of retail prices, as well as, the huge Naira devaluation in the last three years.

According to the MD, “The prices are cost reflective of the input costs, and we are all leaving witnesses to how prices of major raw materials have gone up substantially in Nigeria.

“If you look at before June 2023 a naira was exchanging for 406 461 naira to $1 and at some point it went up to close to 1600 naira to $1.

“Now, why I am giving you this example is that for those of us that are involved in the manufacturing of cement, you know it is a very energy-intensive process, and about 60% of the production cost is actually tied up to energy and all this energy and you can go and confirm this.

“For example, in one of our plants in Edo State, we were paying close to about 4 billion naira for natural gas bought from the state-owned company NNPC through their subsidiary called NGML, Nigerian Gas and Marketing Company Limited.

“The bill was about N4 billion a month. At a time, it went up to N16 billion a month. so you could see it became very difficult to pass on all these costs to the consumers.

“I can tell you this: in early March, we have AGO, that is diesel, delivered to our factory at N900. 30 naira per liter. Today, it is delivered at N1, 850 per liter, and this is just within the space of one to two months.”

Binji said despite the economic challenges of doing business in the country, his company was confident that it would continue to expand its operations through innovation and good corporate citizenship.

The company declared a dividend of 10Naira per ordinary share of 50 kobo, totaling N 338, 643 billion, out of its 2025 Profit After Tax of N356 billion.

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