Following calls by relevant stakeholders in the construction industry for the cost of cement to be downwardly reviewed, the Chairman of BUA Cement Plc, AbdulSamad Rabiu, has expressed optimism that the completion company’s two new factories by the end of the year would trigger a reduction in the price of cement.
According to The Punch, Rabiu said this during an interview with journalists held on the sidelines of the company’s seventh annual general meeting on Thursday in Abuja.
He disclosed that the two factories are the Obu Line 3 and the Sokoto Line 5, which would give the company a combined capacity of six million metric tons.
The BUA chairman also said that the company would support the efforts of the federal government to drive down the price of cement in the country.
According to the BUA Cement chairman, the company is currently increasing its production capacity, noting that once that is achieved by the end of this year, it will boost the availability of the product and drive down prices.
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 caused by 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 cost 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 there are the port costs and transportation from the port.”
Recall that the Minister of Works, Dave Umahi, said last week that he would dialogue with cement manufacturers to reduce the prices of their products.
The minister, who spoke on Sunrise Daily, a Channels Television program, said contractors had complained over the high cost of cement in the country and made claims that importing the product would be cheaper.
“I’m going to be running figures with them (cement manufacturers) to check the cost of cement if we import it and the cost they are giving us here,” he said.
On his part, the CEO of Sharlotte Group and former governorship candidate of the Action Peoples Party, APP, in Abia state, Mascot Uzor Kalu (KSJI), blamed the federal government for the high cost of cement in the country, saying the government’s overprotection of local manufacturers is responsible for the high cost.
Speaking with MUK TV in an exclusive interview about the high cost of cement in Nigeria, the real estate expert said the variation in the cost of the product here where it is produced compared to neighboring African countries where it is exported is inconceivable and incomprehensible, noting that the government’s decisions to protect local manufacturers have always taken the price of any product in question to the ceiling.
Kalu, using rice as his reference point, recounted how the price of the commodity skyrocketed from N8,000 a bag to N40,000 after the government announced the ban on rice importation because it wanted to protect local rice producers.
He added that the government, instead of exclusively reserving the production of a product to local manufacturers and producers, should allow importation for competitiveness but add a sub-charge to the imported product from which a fund can be created and made accessible to the local producers to encourage local production.
