The country’s infrastructural sector is about to experience a huge competition following the announcement of the reduction of the price of cement products by BUA Cement PLC from N5,000 to N3,500 per bag starting from today monday, October 2, 2023.
This reduction was in line with its commitment to spur development in the “building materials and infrastructural sectors”.
The company announced the price reduction in a statement posted on its X (formerly Twitter) page.
This development is coming weeks after the company’s chairman, Abdul Samad Rabiu, after meeting with President Bola Tinubu, promised to review the price of the product.
In the statement, the company says, “We refer to our previous pronouncements regarding our intent to reduce cement prices upon the completion of our new lines at the end of the year, in order to spur development in the building materials and infrastructure sectors.
“As per the commitment made to reduce prices and following a periodic review of our operations for efficiency, the management of BUA Cement Plc wishes to announce and inform our esteemed customers, stakeholders, and the public that effective October 2, 2023, we have decided to bring the price reduction forward. As a result, BUA Cement would now be sold at an ex-factory price of 3,500 Naira per bag so that Nigerians can begin to enjoy the benefits of the price reduction before the completion of our plants.
“Upon completion of the ongoing construction of our new plants, which would increase our production volumes to 17million metric tonnes per annum, BUA Cement PLC intends to review these prices further in line with our earlier pronouncements by the first quarter of 2024.”
This is coming weeks after the Cement Producers Association of Nigeria warned that the plan of the federal government to introduce concrete roads will raise the price of cement to N9,000 per bag from the current price of N5,000.
Even as they called on the current administration to permanently address the perennial cement price hike problem by facilitating larger participation in the cement industry, noting that Nigerians have no business buying cement for more than N5,000 per bag.
The association, in a statement jointly signed by the National Chairman, Prince David Iweta, and National Secretary Chief Reagan Ufomba, on Sunday, commended the works Minister’s position on cement-made roads but warned of dire consequences if the supply end is not addressed properly.
As a solution, the cement producers urged the government to lay more emphasis on road design that allows both cement technology and asphalt pavement to run concurrently and provide ample time for a smooth transition that allows contractors to invest in commensurate and requisite equipment and retooling.
The statement reads, “Our findings from various parts of the country show that cement sells for as high as N6000 per bag in the rainy season. We predict that it will sell for over N9,000 per bag in the dry season, especially with the pronouncement of the Honourable Minister of Works, Engr Sen David Umahi on cement technology and the marching order on housing by Mr. President if the government does not take proactive steps.
“While we commend the Honourable Minister’s position on cement-made roads, we warn of the dire consequences if the supply end is not properly addressed. It would amount to a dereliction of duty not to intervene. And the time is now. To do otherwise is to continue in a worsening pipe dream that prices would suddenly drop on this essential input that will continue to drain the purse of Nigerians, render them homeless, encourage chaos between demand and supply, and worsen the infrastructure deficit it sets out to cure, and lead to an unprecedented price hike.
“We also call on the Honourable Minister of Works to lay more emphasis on the design criteria of roads that allow both cement technology and Asphalt pavement to run concurrently, in turn, will provide ample time for a smooth transition that allows contractors to invest in commensurate and requisite equipment and retooling. We must also as a nation regulate static and dynamic load traffic by introducing weighbridges at access points on our highways. Working in sync with contractors, and allied Ministries of Trade and Investment, Transport, Environment and Finance on realistic policy on cement is most desirable at this critical time.”
The association further requested the government to conclude the backward integration policy of the late Yar’adua administration that was already bringing availability and affordability of cement in the country.
It added, “There has been so much comment on cement and cement pricing of late. What our nation needs is the cement that is available and affordable. And this cannot be achieved by mere wishes, faulty policies, and programs, without breaking the chain of monopoly and favoritisms. Nigerians are tired of waiting for a downturn in the price of cement and decent and affordable housing.
“We call on the Tinubu government to permanently solve this perennial cement price hike problem by expanding participation in the sector with companies who have verifiable evidence of local investment, including greenfield licenses and quarrying. We call on the government to more specifically conclude the backward integration policy of the late Yar’adua administration which was already bearing availability and affordability fruits.
“As patriots, it is our view that the government reintroduces backward integration policy and the conclusion of old ones. Consequently, the government cannot be seen to approbate and reprobate by deregulating issues of petroleum products and foreign exchange on one hand and regulating on pricing of cement, essential goods, and services on another. There is a need for policy harmonization and convergence between fiscal and monetary policies.
“Finally, we call on the government to urgently intervene in the foreign exchange market, intervene in restructuring bad loans of manufacturers, and review palliative modules. The cry for elusive FDI will be drastically reduced if all manufacturing concerns are revived. The government must be decisive in the kind of economic policies it intends to foist on the people,” the statement concluded.