BUA Cement Slashes Price to N3,500, Shakes Up Market Competition
BUA Group, a leading cement producer in Nigeria, has announced a significant price cut for its cement products, from N5,000 to N3,500 per 50kg bag. This move has sparked a fierce price war in the building materials and infrastructure industry, where BUA Group competes with Dangote, Lafarge and other players.
The price reduction by BUA Group came as a surprise to many industry watchers, as it is expected to have a huge impact on the profitability and market share of the cement sector. The Nigerian cement market has been dominated by Dangote, BUA Group and Lafarge, in that order.
The Minister of Works, Dave Umahi, had earlier expressed concern over the high cost of cement in Nigeria compared to other parts of Africa. He had urged the cement producers to lower their prices to make housing and infrastructure more affordable for Nigerians.
However, more than 24 hours after the BUA price reduction announcement, its major rivals, Dangote and Lafarge, have not reacted to the development. When Newsflash Nigeria contacted the spokesperson for Dangote Group, Anthony Chiejine, on Monday, he declined to comment on the matter.
It could be recalled that Chiejine had previously denied claims that circulated on social media a week ago that Dangote cement price was reduced to N2,700 per bag. Similarly, Lafarge cement, another key player in the building materials market, has not issued any statement on the price cut by BUA cement.
Meanwhile, a survey of cement sellers- wholesalers and retailers in Abuja showed that the new price change by BUA is yet to take effect. In Dawaki, an area near Gwarinpa, Eze Onyekachi said he still sells BUA cement at N5,000 per bag. He said he has not received any new stock at a lower price from the depot.
Abdul Adamu, another dealer in Gwarinpa said he still sells at the old price of N5,000 per bag because he has not changed his stock. He said he expects the new price to reflect in a week’s time.
The development has elicited mixed reactions from different stakeholders. Speaking with Newsflash Nigeria on Monday, Wumi Iledare, a Professor Emeritus in Petroleum Economics and Executive Director of Emmanuel Egbogah Foundation, stated that the situation may be beneficial for consumers in the short run.
He said that the fact that one seller can single-handedly determine the cement price shows that the market is anti-competitive and regulators must be vigilant of such behaviour. He warned that if the seller is a dominant firm, it may drive others out of the market in the long run. He added that reducing the price of any raw material for productivity activity is good.
On his part, Kunle Olubiyo, the President of Nigeria Consumer Protection Network said the BUA cement price review would help reduce the 20 million housing deficit in Nigeria. He said it would also create jobs, wealth and peace by engaging the productive energy of idle youths.
He commended the Federal Government for its interest in using cement materials for road construction where it is more suitable than bitumen. He said this would reduce the cost of construction of road, housing and other products that require cement as feedstock.
Others, however, believe that the price reduction is a positive development for the Nigerian economy, as it will make cement more affordable and boost construction activity. They also argue that it will put pressure on other cement producers to lower their prices, which would benefit consumers even further.
Only time will tell whether the BUA Cement price reduction is a genuine effort to make cement more affordable for Nigerians, or simply a ploy to gain market share. However, one thing is for sure: it is a significant development that is sure to shake up the Nigerian cement industry.
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