BUA: Running with Hares and Hunting with Hounds
I have been an ardent advocate of free market where healthy competition can drive supply, demand, prices and general quality of services. In February 2021, when Chairman of BUA Group, Alhaji AbdulSamad Rabiu, called for liberalisation of cement industry to accommodate more investors, increase production capacity and drive down prices of cement, I was happy to hear such reassuring message from one of the big players in cement industry.
Rabiu was quoted as saying: “Even though this cement policy is a good one, it must be done in such a way that a lot of players must come in and participate. There is no point in making a policy that only one, two, or three people are able to benefit from that policy,” he said, adding: “That does not make sense. I am benefiting from this policy, but I know it is a bad policy. So, whilst the policy is good, the way it is being administered is not good. You can’t have a policy that restricts so many people from participating, at the end of the day, you are just creating a monopoly.”
While I was forming and painting an image of Alhaji AbdulSamad Rabiu in my mind as a “messiah” and a “saint” who had come to salvage cement industry and make the commodity cheaply affordable for the masses via BUA Cement, my curiosity arose; punctured the ballooned bubbles and the facade fell off my eyes. I took out take time, went on market survey, only to discover that BUA Cement was not cheaper than others in the market. Then I began to question the motive of such highfalutin propaganda, cloaked in an obviously insufferable hypocrisy, disguised as an interview.
I began to ask thought-provoking questions. You said you are not comfortable with a policy, though you’re benefiting from it. Thinking? Why refuse to excuse yourself from benefiting from such a “bad policy”? You said you want to see cement prices crash, yet your own cement; BUA
is one of the most expensive in the market. Who is deceiving who here? In the said interview, you alluded to a flawed impression that a cartel did not want the cement industry liberalised, in order to maintain hold on price of cement.
And I ask again, was it the same cartel that “forced” BUA Cement to sell cement at the similar price with that of the purported cartel members. You claimed to be fighting a “cartel” yet continue to benefit economically from the activities of the so-called oligopolistic group. You don’t want “monopoly” but keep profiting from prices allegedly fixed by the same monopolistic cartel. A clear case of running with the hares and hunting with the hounds.
Why can’t BUA Cement sell, at least, N500 cheaper than that of its competitors, to drive home the message, if Alhaji AbdulSamad Rabiu truly believes and practises what he is dishing out to the public? Why wait for potential manufacturers in the industry to reduce price of his own product under his sole control?
BUA ranks second in terms of market share, and with this position he can force the price down if he is sincere to Nigerians. For God’s sake, he should stop deceiving the populace
If truly he is hanging hope on non-existent new manufacturers to “force down” price of cement—including his own (BUA), it is either he is revelling in the reveries of hypocrisy or mistake Nigerians as being too gullible and undiscerning to notice his deception. Meanwhile, in a free-market economy, every producer or seller has power to influence prices of his goods and services, unless it is regulated. It is left for customers to make the ultimate choice of purchase.
Alhaji Rabiu’s BUA Cement has been surreptitiously engaging in public incitement against other players in the industry by trying to portray other his competitors as “anti-people cartel”, while projecting BUA Group as the saviour of cement industry. Why the incitement? Why can’t you paddle your own canoe and allow others paddle theirs? Why play mind games with Nigerians?
BUA Cement increased its ex-factory price by N200 on the 5th of July, (just barely 16 days after declaring no further increase in the price of BUA cement) making the Group’s cement the most expensive in the country as at this moment of writing. This is contrary to all the grandstanding, gerrymandering and hullabaloo of the company that it would not increase its cement price. Yet, the same company will always strive to hoodwink Nigerians that there is a “cartel” somewhere that does not want cement price to be cheaper than it is today.
In separately written two press statements released on April 24 and June 18 of 2021, respectively, BUA Group denied not having any intention to increase price of its cement; not even in the nearest future. As usual, it pointed accusing fingers at competitor(s) as instigators of the arbitrary increment in cement prices.
In the statement of June 18, 2021, it read: “As a responsible corporate entity, we refuse and reject associations with any actions that are deemed capable of projecting any industry we operate as a cartel. Hence, whilst we respect that the said company has decided to increase their prices, we are not questioning the reason(s) why, but would like to make clear BUA’s position on a price increase.
“The timing is not right for any increase on BUA’s part, and we do not have any justifiable business reason to increase our prices (ex-factory) anytime soon. We therefore urge our distributors not to panic as well as not engage in any arbitrary hike in the retail price of BUA Cement,”
As a discerning Nigerian, the question I will want to pose to BUA Group is: what changed—between 18th June, 2021 and 5th July 2021? Why increase the price then after all the denials cum shenanigans? Did the so-called cartel you alluded to force you to increase the price of your cement? What’s the role of said cartel in the choice of a producer to increase the price of its product? Why being hypocritical and conny about it?
As at today, in Abuja precisely, the retail price of BUA Cement is N3,700 while others are N3,500 a bag. Between BUA Group and other producers of cement, who is the “real” cartel and anti-people here? This is the same man who has been pussyfooting about crashing cement price for years. There’s limit to hypocrisy and its attendant deception. Nigerians are wiser. They can look beyond the noise of sanctimoniousness and recognise a double-dealer when they see one.