BUA’s Price Reduction on Cement Stirs Competition

Nigeria’s infrastructure and building materials industry is experiencing a new wave of price wars among major players, including Dangote, BUA Group, and Lafarge, to control the lucrative cement market.

BUA Group announced a reduction in cement prices from N5,000 per bag to N3,500 and renegotiated deals with stakeholders. This move is seen as a strategic move by BUA Group to dominate the market, but it has received mixed reactions from consumers and industry analysts.

Some see it as a short-term relief for consumers who are currently bearing the brunt of the high cost of cement, which is a major component in the building sector. However, industry analysts see this move as potentially anti-competitive and capable of stifling the growth of other players in the market in the long run.

Some, like Kunle Olubiyo, the President of Nigeria Consumer Protection Network, view this development positively, believing that it would lead to reduced costs of construction, job creation, and stimulate demand for cement, ultimately helping reduce housing deficits in Nigeria.

However, Prof Godwin Oyedokun, President of the Association of Forensic Accounting Researchers, cautions that the effect of this development would depend on various factors and circumstances of the market.

Bode Fadipe, a Global Power and Energy analyst, sees the reduction in cement prices by BUA as cosmetic and transient, only having a sustained effect if there is a corresponding reduction in other parameters like land and labor costs.

Idakolo Gbolade, CEO of SD & D Capital Management, believes that the government should create an enabling environment for more competition in the cement market, leading to lower prices for consumers and stimulating industry growth.