• BUA Cement says cement prices will fall once production and logistics costs reduce
• The company blames FX volatility, diesel prices and energy costs for rising cement prices
• BUA plans to increase production capacity to 23 million tonnes annually

BUA Cement has said cement prices in Nigeria will reduce once production and logistics costs begin to ease, stressing that rising prices have largely been driven by foreign exchange instability, energy costs and transportation expenses.

Speaking during the company’s 10th Annual General Meeting held in Abuja on Thursday, May 21, Chairman of BUA Cement, Abdul Samad Rabiu, explained that manufacturers in the cement industry remain heavily exposed to exchange rate fluctuations because many production inputs and spare parts are imported.

According to him, recent reforms in the foreign exchange market have started improving business planning and easing pressure on manufacturers.

“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 added that although the naira devaluation created serious challenges for businesses, the reforms had helped create a more transparent foreign exchange market.

“Today, whatever rate I get, it’s the same rate anybody gets,” he stated, noting that manufacturers can now plan operations six to nine months ahead due to improved exchange-rate stability.

Rabiu maintained that cement prices in Nigeria are still competitive compared to prices in some neighbouring countries where Nigerian cement is exported.

The company chairman also disclosed that BUA Cement generated N1.2 trillion in revenue for the 2025 financial year, up from N876.5 billion recorded in 2024.

Profit before tax rose sharply by 367 per cent to N465.3 billion, while profit after tax climbed by 381.7 per cent to N356 billion.

He said the company remains optimistic about Nigeria’s infrastructure sector and plans to continue expanding production capacity while supporting national development.

During a question-and-answer session after the AGM, the Managing Director and Chief Executive Officer of BUA Cement, Yusuf Binji, explained that energy costs account for nearly 60 per cent of cement production expenses.

“As you know, the price of cement, rightly or wrongly, is a consequence of input costs,” Binji said.

He revealed that monthly natural gas costs at one of the company’s Edo State plants rose from about N4 billion to N16 billion following the naira devaluation.

“We were paying close to about N4bn for natural gas every month. At a point, it went up to N16bn a month. It became very difficult to absorb all these costs,” he said.

Binji also blamed rising diesel prices on growing tensions in the Middle East, saying diesel supplied to the company’s factories increased from about N930 per litre in March to N1,850 per litre within two months.

According to him, transportation costs now make up a significant portion of the retail price of cement because the company distributes products nationwide using diesel-powered trucks.

“If you consider that we have to deliver cement to our customers using our own trucks that are using diesel, even the price we are talking about, half of that price of a bag of cement is actually because of transportation,” he stated.

The BUA Cement CEO dismissed reports claiming cement sells for between N13,000 and N15,000 per bag in all parts of the country, insisting that prices in several northern markets remain lower.

“I have the prices from the northern region, and yesterday it was N11,100 a bag. So it is nowhere near the N13,000 or N15,000 a bag that was quoted,” he said.

Binji assured Nigerians that the company would continue reviewing prices based on prevailing economic conditions.

“As we have favourable economic conditions in Nigeria, especially costs that are related to our input costs, we will adjust accordingly. Whichever way it swings, we will try to make sure that we give prices that are fair and decent to Nigerians,” he added.

The company also confirmed that expansion projects in Edo and Sokoto states are progressing despite economic and security challenges.

According to Binji, the new production lines will add about six million tonnes annually to BUA Cement’s output, increasing total installed capacity to 23 million tonnes per annum by the end of next year.

He added that demand for cement remains strong due to ongoing infrastructure projects across the country, including the Lagos-Calabar Coastal Highway.

Binji disclosed that the company has invested heavily in bulk distribution by acquiring 500 specialised trucks for large-scale construction projects and may purchase an additional 500 trucks to meet growing demand.

He also said BUA Cement had reduced exports temporarily in order to prioritise supply within Nigeria as domestic demand continues to rise.

At the AGM, shareholders approved a final dividend of N10 per ordinary share for the 2025 financial year, amounting to a total payout of N338.64 billion.

BUA clarifies progress on Akwa Ibom refinery, denies misleading 90% completion report

Meanwhile, TheRadar earlier reported that BUA Group had issued a clarification regarding the progress of its 200,000 barrels per day crude oil refinery in Akwa Ibom, South-South Nigeria, denying claims that the facility was 90 per cent completed. 

The group assured that the refinery was progressing according to schedule and would be delivered on time in a statement released by the management on Sunday,  January 5, 2025.