By Ayo Yusuf
The fight between Africa’s richest man and founder of Dangote Group, Mr Aliko Dangote and billionaire group chairman of BUA Group, Abdulsamad Rabiu, for the largest share of the cement market rages as Mr Rabiu plans to crash cement price from N5500 to about N3000 at the end of the year.
Mr Rabiu who recently became Africa’s third richest man according to Forbes, has an estimated fortune of $8.2 billion, and his company, BUA Cement PLC owns 20 percent of the domestic market share for cement. Mr. Dangote, whose wealth is estimated at $14.2 billion, owns Dangote Cement PLC which is the largest cement producer in the country with 69 percent of the market share.
In the last six months, three companies; Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc have cashed in on the construction boom by taking in N1.37 trillion despite the vulnerability of the Nigerian market caused both by the naira scarcity of the first quarter and the removal of subsidy and floating of the naira in the second quarter.
Relations between both men have been frosty since June 2020 when BUA Cement got a restraining order against Dangote Cement after the police invaded its three sites in Obu Okpella, Edo State. Mr Rabiu alleged that Mr Dangote had engineered the whole thing.
In his meeting with President Bola Tinubu Friday, Mr Rabiu said his company has concluded plans to reduce the price of cement in Nigeria by as much as 40 per cent.
The group chairman of BUA Group said the price crash is part of his company’s contribution in support of Federal Government‘s efforts to stabilise the prices of essential commodities in the country.
He said the new prices will come into effect after its two new plants with a combined operating capacity of six million tons are commissioned at the end of the year.
Mr Rabiu who gave details of his meeting with the President to newsmen at Aso Villa said: “Let me thank his excellency Mr. President for graciously receiving me today, I came to intimate his excellency on the affairs of our cement business.
“We have two new lines of 3 million tons each that we will be commissioning by the end of the year.
“So I explained to him that we want to support the efforts of the government in bringing down the cost of cement, by the time these lines are commissioned BUA Cement will be producing about 17 million tons per annum and with that, we intend to bring down the cost of cement from its current level of N5,000 or N5,500 per bag to maybe N3,000 to N3,500 per bag.”
He said the company could only do this because it is producing cement locally.
“Eighty per cent of the raw materials that we are using to produce cement in Nigeria are mainly limestone and gypsum and of course, energy is part of it. Of course, we have gas in Nigeria.
“So we want to support the government, we want to support their efforts in ensuring that the prices of these commodities are brought down incidentally,” he said.
The 62-year-old BUA chairman is essentially into cement and sugar and the competition for the market shares of these products had seen him engaged in a running battle with Mr Dangote who, like Rabiu, is also from Kano State.
In one of their latest battles, Mr Dangote, who is also chairman of Dangote Sugar Refinery Plc, had written to warn the former Minister of Industry, Trade and Investment, Niyi Adebayo, that the establishment of a sugar plant by BUA International Limited, owned by Mr Rabiu, in the Port Harcourt free trade zone was out of tune with export laws.
“The mid-term review conducted by the NSDC (National Sugar Development Council) was clear in its conclusions – BUA has failed to invest substantively in local production or comply with its undertakings under its BIP,” Mr Dangote said in a letter jointly signed with John Coumantaros, chair of Flour Mills of Nigeria Plc, a fellow maker of the product.
“BUA intend only on importing and refining raw sugar whilst claiming to be investing in developing sugar plantations in order to qualify for quotas to import raw sugar,” he said.
In reply, the BUA Group said,
“BUA takes serious exception to the ludicrous claims by its two major competitors that it aims to circumvent the BIP of the sugar industry – an initiative in which it has invested billions of Naira and is almost nearing completion.”
“To thus claim that the BUA PH export focused refinery in an Export Zone will amount to an undermining of the NSMP (National Sugar Master Plan) is false.”
Analysts said they expect the Dangote Group to respond soon to this new plan by BUA to take a bigger share of the cement market by crashing the product’s prices.
