BUA Cement Promises Price Relief As Costs Ease Amid Massive Profit Surge

(Chairman of BUA Cement Plc, Dr Abdul Samad Rabiu. Photo Credit: Punch News)

BUA Cement Plc has said that cement prices will come down once production and logistics costs ease, maintaining that the increase in prices has been driven primarily by foreign exchange depreciation, rising energy costs and higher transportation expenses, and not by excessive profit-making on the part of the company.

The company's Chairman, Abdul Samad Rabiu, made this known at BUA Cement's 10th Annual General Meeting held in Abuja on Thursday.

He noted that recent economic reforms, particularly the growing stability of the foreign exchange market, were beginning to ease cost pressures and improve planning conditions for manufacturers.

Rabiu explained that the cement industry is highly sensitive to exchange rate fluctuations due to its heavy reliance on imported spare parts, energy inputs and other production requirements.

He acknowledged that the devaluation of the naira posed serious challenges for manufacturers but said the recent period of exchange rate stability had already contributed to price reductions in some commodities, including shipping costs, and had made it possible for businesses to plan several months ahead with greater confidence.

He also noted that cement prices in Nigeria remain competitive when compared to prices in several neighbouring countries where Nigerian producers export their products, and that the foreign exchange reforms, despite their initial pain, had created a more transparent and accessible market for businesses.

Adding further detail during a question-and-answer session after the meeting, the company's Managing Director and Chief Executive Officer, Yusuf Binji, explained that energy accounts for roughly sixty percent of cement production costs, making the industry especially vulnerable to foreign exchange and energy price shocks.

He gave a striking example of how the naira's devaluation affected the company's natural gas expenses at one of its plants in Edo State, where monthly costs climbed from around four billion naira to as high as sixteen billion naira as exchange rate pressures mounted.

He also pointed to escalating tensions in the Middle East as a key factor behind surging diesel prices, with the cost of diesel delivered to the company's factories rising from approximately nine hundred and thirty naira per litre in early March to one thousand eight hundred and fifty naira per litre within just two months.

He noted that transportation alone accounts for roughly half the cost of a bag of cement when factoring in delivery by diesel-powered trucks.

Binji also pushed back against reports that cement was selling for between thirteen thousand and fifteen thousand naira per bag across the country, insisting that prices in many regions remained significantly lower, citing a northern market price of eleven thousand one hundred naira per bag recorded the previous day.

He assured consumers that the company would continue to adjust prices in line with prevailing economic conditions and would strive to keep prices fair and reasonable for Nigerians.

On the subject of expansion, Binji disclosed that BUA Cement is pressing ahead with major capacity projects despite economic headwinds and security challenges.

A new production line in Ososo, Edo State, is nearing completion, while another line in Sokoto has already been announced.

Together, these projects are expected to add six million tonnes to the company's annual production capacity, bringing total installed capacity to twenty-three million tonnes per annum by the end of next year.

He added that demand for cement remains strong, buoyed by ongoing road and infrastructure projects across the country.

The company has invested heavily in bulk cement distribution, acquiring five hundred specialised trucks that are currently fully deployed, with plans to procure an additional five hundred under consideration.

BUA Cement has also temporarily scaled back exports in order to prioritise meeting rising domestic demand.

In terms of financial performance, the company recorded revenue of one point two trillion naira in 2025, up from eight hundred and seventy-six point five billion naira the previous year.

Profit before tax surged by three hundred and sixty-seven percent to four hundred and sixty-five point three billion naira, while profit after tax rose by three hundred and eighty-one point seven percent to three hundred and fifty-six billion naira.

At the AGM, shareholders approved a final dividend of ten naira per ordinary share for the 2025 financial year, amounting to a total payout of three hundred and thirty-eight point six four billion naira, payable to shareholders on the company's register as of May 8, 2026.