As the cost of building materials increase, the chairman of BUA Cement, Abdul-Samad Rabiu, has revealed that his company is in talks with the Federal Government to see ways of crashing the price of cement.
Shareholders of the company also approved the proposal of the board of directors to pay N2.80 per share in 2022 compared to N2.60 per share paid in the previous year of 2021.
Speaking at the seventh Annual General Meeting of the company in Abuja on Thursday, Rabiu disclosed that revenue rose by 40.3 per cent to N361.9bn in 2022 as against N257.3bn recorded in 2021.
He said the figure showed BUA cement outperformed its peers in cement volume growth during the period under review.
He added that the company’s profit after tax rose by 12.1 per cent to N101.1 billion, in comparison to N90.1 billion recorded in 2021.
Rabiu, while reacting to the frustrations of the Minister of Works, Dave Umahi, on contractors’ complaints of high cost cement, assured that the company is currently increasing its production capacity to enable it drive down prices, oscillating between between N4,500 and N4,800, depending on the location.
Rabiu said, “I understand that the Minister is quite concerned that the price of cement is high at almost N5,000 per tonne. I appreciate where the government is coming from and the frustration from all the issues in the country.
“The price of cement at N5,000 is not high. If we look at the rate of the US dollar today, importing cement will be at N5,000. The cement cost, insurance and freight to any port in Nigeria will be in the region of about $100 a tonne. So, at $100 per tonne, if you take N800 to $1 then it will be N4,000 per bag. Then the port cost, and transportation from the port.
“It’s not that the government wants to import cement, but they are frustrated that the price of cement is high. What we told our shareholders is that we will engage with the government to support it.
“Even though we know that the price of cement is high, it will not be cheaper if imported. We have two lines coming up by the end of the year, the Obu line 3 and the Sokoto line 5 that will give us a combined capacity of six million tonnes. By the time we have those two lines active with the current one, we will have about 17 million tonnes per annum. We are going to reduce the prices of cement once these two lines are up and running. This is the promise we are making to Nigerians.
“But you shareholders will have to expect less dividends. It’s a sacrifice you have to make to ensure cement is cheaper.”
I’ll reach out to the Minister and sit with him”, Rabiu assured.
He further revealed that his company has imported 1,000 trucks in anticipation of the two new lines coming on stream.
“We target 75-80% capacity utilisation”, he added.
