FX Stability, Energy Costs Key to Future Price Reduction
BUA Cement Plc has said cement prices in Nigeria will decline when production and logistics costs reduce, stressing that rising costs, not excessive profit, remain the major driver of current market prices.
Speaking at the company’s 10th Annual General Meeting in Abuja on Thursday, Chairman of BUA Cement, Abdul Samad Rabiu, said recent economic reforms, especially foreign exchange stability, have started easing pressure on manufacturers.
He explained that the cement industry remains vulnerable to exchange rate fluctuations because it relies on imported spare parts, energy inputs, and other production materials.
Rabiu said the naira devaluation created serious challenges for manufacturers. However, recent exchange rate stability has improved business planning and lowered pressure on commodity prices.
“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,” he said.
Exchange Rate Reforms Improve Business Planning
Rabiu added that foreign exchange reforms have created a more transparent market. He said manufacturers can now access foreign currency under the same pricing conditions, unlike previous distortions in the market.
According to him, the improved stability allows businesses to plan between six and nine months ahead.
He also noted that cement prices in Nigeria remain competitive compared to some neighboring countries where local producers export products.
Revenue, Profit Rise Strongly in 2025
Rabiu said BUA Cement remains focused on reducing operating costs through investments in energy infrastructure, local production, and logistics expansion.
He added that the company’s growth strategy aligns with Nigeria’s industrial development agenda through capacity growth, market expansion, and stronger efficiency.
The company posted revenue of N1.2 trillion in 2025, rising from N876.5 billion in 2024.
Profit before tax jumped by 367 percent to N465.3 billion from N99.6 billion. Profit after tax also rose by 381.7 percent to N356 billion, up from N73.9 billion in the previous year.
Rabiu said the board remains optimistic about Nigeria’s infrastructure growth and BUA Cement’s ability to deliver long-term value to shareholders.
Energy Costs Still Drive Cement Prices
Providing more insight during a question-and-answer session, Managing Director and Chief Executive Officer, Yusuf Binji, said energy accounts for nearly 60 percent of cement production costs.
He said this makes the industry highly exposed to foreign exchange movements and rising fuel prices.
“As you know, the price of cement, rightly or wrongly, is a consequence of input costs,” Binji said.
He revealed that before the naira devaluation, natural gas expenses at one of the company’s Edo State plants stood at around N4 billion monthly. Later, the cost surged to N16 billion per month due to exchange rate pressure.
“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.
Middle East Crisis Pushes Diesel Costs Higher
Binji also blamed rising tensions in the Middle East for the sharp increase in diesel prices.
According to him, diesel delivered to company factories climbed from about N930 per litre in early March to N1,850 per litre within two months.
He said transport costs now account for a major part of cement pricing because trucks deliver products directly to customers.
“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 said.
BUA Rejects N15,000 Cement Price Claims
Binji dismissed reports that cement sells for between N13,000 and N15,000 per bag nationwide.
He said prices remain lower in many regions.
“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.
He assured consumers that the company will continue adjusting prices in line with changing 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,” Binji said.
Expansion Projects to Raise Capacity to 23 Million Tonnes
Despite economic pressure and insecurity concerns, Binji said BUA Cement continues to push major expansion projects.
He disclosed that a new production line in Ososo, Edo State, is nearing completion. He also said another line in Sokoto has already been announced.
The projects will add six million tonnes to annual production capacity. As a result, total installed capacity will rise to 23 million tonnes per annum by the end of next year.
“We are going to add about six million tonnes per annum to our capacity. That is going to bring us up to 23 million tonnes per annum,” he said.
Rising Infrastructure Projects Boost Demand
Binji said demand for cement remains strong due to road and infrastructure projects across Nigeria.
He added that the company has invested heavily in bulk cement transportation. BUA acquired 500 specialized trucks for major construction projects, and all are now fully deployed.
“We are even thinking of buying another 500 more,” he said.
He linked rising demand to key projects such as the Lagos-Calabar Coastal Highway and other large-scale road works.
He also said BUA temporarily reduced exports to focus on domestic supply as local demand continues to increase.
Despite insecurity in some areas, he stressed that the company remains committed to investment and expansion.
“Our major aim is to be able to deliver cement everywhere in Nigeria at affordable prices, and that is what we will continue to do,” he said.
Shareholders Approve N338.64bn Dividend
At the AGM, shareholders approved a final dividend of N10 per ordinary share for the 2025 financial year.
This brings the total payout to N338.64 billion.
The company said the dividend will go to shareholders whose names appeared on the register at the close of business on May 8, 2026.
