By Elizabeth Toyon
Expectations are dashed – the widely reported ex factory price of N3500 per 50kg bag of BUA Cement has not made any impact in the market as the product is unavailable and could still sell at over N5000 for a long time.
Following the announcement of BUA cement on its decision to reduce the price of the cement to N3,500 at ex-factory price, cement sales outlets and distributors in Lagos have said that the price reduction is not effective.
BUA cement had earlier stated that their intention as regards the price reduction is to stimulate development in the building materials and infrastructure sectors and that the price reduction was to take effect from 2nd October, 2023.
While the announcement caused increased demand for the product, it has also served as an organic way to penetrate the market through unpaid adverts by social media users sharing stories of the N3500 ex factory price.
Findings by JournaNG revealed that the cement has not really been in circulation in Lagos and parts of Ogun States where there are ongoing construction works. in the past.It’s recent availability is as a result of the price reduction and it is available in just one distribution outlet.
However, cement outlets and distributors in Badagry have inferred that lack of proximity of the factory to Badagry has made the price reduction ineffective. The logistics of shipment from factory to distrributors to retailers and final consumers affects the retail price of each bag
Some retailers argue that the widely celebrated BUA price is the same thing with other brands as it costs an average of N1500 to transport each bag to the various distributors and retail outlets thereby bringing the price to N5000 or more.
Since most builders are not buying from the factories directly, it is looking impossible for them to get it at the N3500 price except for construction sites in Edo State, close to where the BUA factory is located
According to Alhaji Oladimeji, a cement outlet owner in Badagry, the price reduction has not created any change in market price in Badagry.
He said ” BUA cement is in circulation in Badagry but in very low quantity.We were told that the ex-factory price is N3,500 but transporting it from the factory in Edo state to Badagry will cost about N1,500 which will still be the same with other cement brands.In Badagry, only one distributor has BUA cement in stock.Customers started requesting for it lately because of the news of the price reduction and they expect us to sell at that exact N3,500 which is not possible, besides I don’t have it presently”.
” If 10 trucks of BUA cement is allocated to Lagos, just two trucks might come to Badagry and that is one of the reasons why it is available in very low quantity in Badagry.BUA cement cannot tell us that their cement price has reduced because it is just the ex-factory price.If it gets to me at N5,000, I can not sell it at that price because transporting it to the place of usage requires additional cost which could amount to a total of N5,300 and it is similar to the price of other brands.
Mr Alabi Akeem, a sales person at a cement outlet in Badagry also said his customers started requesting for BUA cement last week because of the price reduction but he does not have it in stock and he is not ready to buy it because the retail price is almost the same with other cement brands and customers prefer other popular brands like Dangote and Elephant cement.
” We don’t have BUA cement in our outlet.We sell Lafarge and Dangote cement majorly.We have not sold BUA cement before.BUA cement is available in just one depot in Badagry.The price reduction cannot work in Badagry.The factory is in Edo state and the truck that will transport 900 bags to Lagos state will charge N1.4 million.The retail price will still fall back to the former price”.
” It was after the price reduction some customers started requesting for it.Most customers buy Dangote cement and we sell for N5,100 per bag likewise other brands”.
Another cement sales outlet owner who pleaded anonymity said BUA cement was in circulation in Badagry but in very low quantity.
He said” BUA cement has been in circulation in Badagry but in very low quantity.We don’t have BUA cement in stock now Lafarge and Dangote cement are the most common in Badagry because their factories are closer and we sell N5,100 per bag.
With a similar opinion, another cement sales distributor who does not want her name in print said ” BUA was once in circulation in Badagry but we don’t sell it because customers do not request for it . Customers just started requesting for it since last week because of the news of the price reduction”.
During a visit to the said Distributor that has BUA cement in stock, the sales person who pleaded anonymity told JournaNG that they have not had BUA cement in stock this year and they made attempt to have it in stock because of the recent price reduction.
” We have BUA cement presently and we sell for N4,950.Because of the cost of transportation from the factory we do not buy the brand.We made attempt to have it in stock because of the recent price crash.We have not had it in stock since the beginning of this year.Since the announcement of the price reduction, the demand for BUA cement has increased but once we tell our customers the price, they will change their minds and go for other brands like Dangote which we sell for N5,000 because the price is almost the same”.
Speaking with one of the customers at a cement sales outlet, Mr Aminu said he prefers buying Dangote cement because he is familiar with the brand.
” I can’t buy BUA cement because the retail price is still the same with other brands.I know Dangote cement has been in the market for long and I am sure of it’s quality”.
Another customer, Mr Azeez said ” BUA sales price reduction was initiated to make the brand well known.He said it is a marketing strategy but it can not work in Badagry because of the cost of transportation from the factory compared to Dangote and Elephant cement which have their factories closer to Lagos”.
