BUA Cement Plc has attributed the high cost of cement in Nigeria to rising production and transportation expenses, saying prices will fall once economic conditions improve.
Speaking at the company’s 10th Annual General Meeting in Abuja on Thursday, Chairman of BUA Cement Plc, Abdul Samad Rabiu, said exchange rate instability, energy costs and logistics challenges were the major factors driving cement prices upward rather than excessive profiteering by manufacturers.
Rabiu noted that recent foreign exchange reforms by the Federal Government had started easing pressure on businesses by improving stability in the currency market.
“The good news is that things are getting better because of the stability. You see, the price of certain commodities is coming down, especially shipping prices,” Rabiu said.
He explained that cement production relies heavily on imported spare parts and energy inputs, making manufacturers vulnerable to fluctuations in the naira.
According to him, the current exchange rate system has created a fairer environment for businesses.
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“Today, whatever rate I get, it’s the same rate anybody gets,” he stated.
Managing Director and Chief Executive Officer, Yusuf Binji, said energy accounts for nearly 60 per cent of cement production costs.
“As you know, the price of cement, rightly or wrongly, is a consequence of input costs,” Binji said.
He disclosed that monthly natural gas expenses at one of the company’s plants in Edo State rose from about ₦4bn to ₦16bn following the naira devaluation.
Binji also linked rising diesel prices to tensions in the Middle East, noting that transportation now makes up almost half the cost of a bag of cement.
Despite the challenges, he assured consumers that the company would reduce prices once costs ease.
“As we have favourable economic conditions in Nigeria, especially costs that are related to our input costs, we will adjust accordingly,” he said.