The Chief Executive Officer of BUA Group, AbdulSamad Rabiu, has disclosed that there is an agreement between BUA and Dangote Group to “freeze” the price of cement for retailers who are willing to support President Bola Tinubu’s Renewed Hope Agenda movement in the country.
Mr Rabiu made this known in an interview with journalists on the outcome of his meeting with President Bola Tinubu on Thursday at the Presidential Villa in Abuja.
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He said he was approached by the Chairman of Dangote Group, Aliko Dangote, and they have both agreed to do everything to support Mr Tinubu’s Renewed Hope Agenda.
“We have decided that we are going to freeze the price of cement for any contractor that is involved with the renewed hope project, or projects,” Mr Rabiu said.
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He explained further that it means “any company or anybody that is involved or that is doing a project that is under renewed hope, the price of cement will be frozen. There will be no increase for the foreseeable future.”
A Dangote Group spokesperson could not immediately confirm the deal Friday morning. When reached for comment, Anthony Chiejina, spokesperson of Dangote Group, said he was not aware of the deal and would need to clarify from top officials of the company. He was yet to provide further details as of press time Friday afternoon.
Due to the cost-of-living crisis in Nigeria, the price of a bag of cement—a major material required for construction—has increased to about N10,000 per bag in many parts of the country.
The harmonious move to stabilise prices for retailers in support of the current administration projects by the makers of BUA and Dangote cements—the largest cement-producing groups in the country—comes after over a year of back and forth with the government over fluctuating prices of cement that has led to a significant spike in the prices of goods and services, and uncertainty about project proposals.
In February last year, the government threatened major cement manufacturers in the country to allow massive importation of cement if the price was not reduced across the country. Prior to that, PREMIUM TIMES had reported that major cement manufacturers (Dangote, BUA, and Lafarge) agreed that the price of a bag of cement would not exceed N7,000 and N8,000.
The resolution was reached following a meeting between the Minister of Works, David Umahi, the Minister of Industry, Trade and Investment, Doris Uzoka-Anite, as well as representatives of BUA Cement, Dangote Cement, Lafarge, and the Cement Producers Association at the time.
“Cement at N9000/bag is not high”
On Thursday, Mr Rabiu explained that cement being sold at N9000 per bag is not too high due to the high production costs incurred in the country, and that the devaluation of the naira also has a huge impact on the current price of their product.
“The prices are not really going much higher than what they should. Look at it this way. $1 is N1600. Cement’s main price today, even if you take it at N9000 per 20 bags, which is one ton, we are looking at N180,000 per ton. N180,000 is $110, maybe $120 per ton,” Mr Rabiu said.
“The devaluation happened two years ago, and it was necessary. We needed to do that. And the price of cement at N9000 is not high because it’s about $110 and $120 per ton. N10,000 maybe retail,” he added.
The BUA boss explained that even if cement is selling for N10,000 per bag, it is still not too high because all their inputs and energy costs are paid in dollars.
“One of my factories, the Obu Plant, I’m paying N15 billion every month, just for the gas that we consume on a monthly basis, to NGML; two, three years ago, we were paying N5 billion,” he said.
Also, Mr Rabiu explained that spare parts, expert hiring costs, mining, and other expenses are paid in dollars. Yet, he said they have still managed to keep the price of cement at about $110 and $120.
He commended the Minister of Works, David Umahi, for the initiative to ensure that all the ongoing roads are concrete roads because concrete roads are more durable, and that they take much longer and are cheaper than even bitumen.
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“So that is what we are doing. And we are going to continue to support His Excellency. Aliko, as I said, came up with this idea, and we keyed into the idea, and we are going to do that. And what we have done is also to reconstitute the board of CEMAN, which is the Cement Manufacturers Association of Nigeria.
“So what we have decided again with Alhaji Aliko Dangote is that we are going to be setting aside between N20 and N30 per bag every year, and that should bring in about N15 to N20 billion a year. And this money is going to be channelled towards addressing or supporting the training of artisans within the construction industry,” he noted.
