BUA cement blames price hike on fx fluctuations

BUA Cement Plc has disclosed that prices of cement may not fall until production and logistics costs ease, noting that rise in prices has been driven largely by foreign exchange depreciation. The company added that surging energy costs and higher transportation expenses have also contributed to the high cost of cement Daily Trust reports that […]

BUA Cement Plc has disclosed that prices of cement may not fall until production and logistics costs ease, noting that rise in prices has been driven largely by foreign exchange depreciation.

The company added that surging energy costs and higher transportation expenses have also contributed to the high cost of cement

Daily Trust reports that cement prices have gone above N12,000 per 50kg bag, sparking outrage, with many Nigerians lamenting that the current price defies federal government’s efforts in bridging housing deficit and guaranteeing affordable housing.

Speaking at the company’s 10th Annual General Meeting in Abuja on Thursday, Chairman of BUA Cement, Abdul Samad Rabiu, said recent economic reforms, particularly the stabilisation of the foreign exchange market, were beginning to improve planning and reduce cost pressures for manufacturers.

Rabiu explained that the cement industry remained highly exposed to exchange rate movements because of its dependence on imported spare parts, energy inputs and other production requirements.

According to him, the foreign exchange reforms, though painful initially, created a more transparent market and removed distortions that had previously made access to foreign currency difficult for many businesses.

“Today, whatever rate I get, it’s the same rate anybody gets,” he stated, adding that manufacturers could now plan six to nine months ahead because exchange rates had remained relatively stable over recent months.

Rabiu disclosed that the company generated revenue of N1.2tn in 2025, up from N876.5bn in 2024, while profit before tax surged by 367 per cent to N465.3bn from N99.6bn.

Profit after tax also rose by 381.7 per cent to N356bn from N73.9bn recorded in the previous year.

He added that the board remained optimistic about Nigeria’s infrastructure outlook and the company’s ability to continue supporting national development while delivering long-term value to shareholders.

Providing further insight into the company’s pricing structure during a question-and-answer session after the meeting, the Managing Director and Chief Executive Officer, Yusuf Binji, said energy accounted for about 60 per cent of cement production costs, making the industry particularly vulnerable to foreign exchange and energy price shocks.

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

He explained that before the naira devaluation, natural gas expenses at one of the company’s plants in Edo State stood at about N4bn per month, but later rose to N16bn per month as exchange-rate pressures intensified.

Binji also pointed to the recent escalation of tensions in the Middle East as a major contributor to rising diesel prices.

According to him, diesel delivered to the company’s factories rose from about N930 per litre in early March to N1,850 per litre within two months, significantly increasing distribution costs.

“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.

He said the company’s new production line in Ososo, Edo state, was nearing completion, while plans for another line in Sokoto had already been announced.

According to him, the projects will add about six million tonnes to the company’s annual production capacity and increase total installed capacity to 23 million tonnes per annum by the end of next year.

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

The dividend is payable to shareholders whose names appeared on the company’s register at the close of business on May 8, 2026.