Mixed remarks as BUA Group lowers prices by 30%
On Sunday, BUA Group stated that the cost of cement would drop from N5,000 per bag to N3,500.
The change, according to DAILY POST, is already intensifying a price war in the construction and infrastructure sectors.
Dangote, BUA Group, and Lafarge had, respectively, held the majority of the market share in Nigeria for cement.
states that the move made by BUA Group shocked the construction and infrastructure sectors.
The high cost of cement in Nigeria in comparison to other regions of the continent had been brought up by the Minister of Works, Dave Umahi.
Dangote cement, the company’s main rival, has been silent for more than 24 hours following the announcement of the price decrease by BUA.
Anthony Chiejine, a spokesman for the Dangote Group, was unavailable for comment when DAILY POST reached out to him on Monday.
However, it may be noted that Chiejine had previously refuted allegations that had been making the rounds on social media a week earlier that the cost of Dangote cement had been cut to N2,700 per bag.
Similar to this, Lafarge cement, a significant player in the building materials market, has not yet responded to BUA cement’s price reduction.
A survey of cement wholesalers and merchants in Abuja, however, revealed that the latest pricing change by the BUA has not yet taken effect.
Eze Onyekachi stated that his 50kg BUA cement price in Dawaki, a neighborhood close to Gwarinpa, has maintained at N5,000.
The price cut, according to him, is a publicity ploy; as of today (Monday), we continue to buy at the depot price and sell for N5000 per 50kg bag. I’m telling you to come back in a week; the pricing might not have changed.
“Several people have called me about the price reduction for BUA cement, but we haven’t seen it take effect yet,” the source said.
Abdul Adamu, a dealer who conducts business in Gwarinpa, claimed that because he hasn’t updated his inventory, he is still charging N5,000 for each 50kg bag.
“We are still selling at N5000 per bag at this time because we haven’t received any new stock,” he stated.
The development has drawn praise and criticism.
The scenario may be alleviating in the short term, according to Wumi Iledare, a professor emeritus of petroleum economics and executive director of the Emmanuel Egbogah Foundation, who was speaking with NAN on Monday.
“It is concerning that a single seller in a market may solely control the price of cement. It demonstrates how the market is anti-competitive and requires regulators to keep an eye out for such behavior.
“In this scenario, cement may initially appear to be quite relaxing to product users.
“However, if it is a powerful cement company, such a seller may eventually force out rivals from the cement market. In addition, lowering the cost of any raw material is beneficial for productivity activities, he added.
The 20 million housing need in Nigeria will be helped by the BUA cement pricing review, according to Kunle Olubiyo, President of the Nigeria Consumer Protection Network.
“In the spirit of market competition, the current price war in the cement subsector is a positive development.
The general public, product off-takers, and end-user customers will benefit as well.
You may recall that the Federal Government recently expressed interest in using cement materials to build roads, as cement is thought to be more valuable and appropriate given the varied climatic conditions found throughout Nigeria, where using bitumen may not be the best option.
“In the spirit of market competition, the current price war in the cement subsector is a positive development.
The general public, product off-takers, and end-user customers will benefit as well.
You may recall that the Federal Government recently expressed interest in using cement materials to build roads, as cement is thought to be more valuable and appropriate given the varied climatic conditions found throughout Nigeria, where using bitumen may not be the best option.
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