Bua Cement announced the reduction of cement to N3,500 and got alot of reactions and celebrations But will the price actually go down?

LET'S ANALYSE TOGETHER :

Note that what was reduced was EX FACTORY PRICE.
What this means is that, the price reduction is only on SELF COLLECTION.

Self collection means a distributor using HIS PERSONAL TRUCK to transport the cement from the plant to his location.
Are You also aware that the old ex factory price was N4,000? before the reduction to N3,500.
Meaning only N500 was reduced.
Dangote Ex factory price is N4010. Meaning it was higher by only N10 per bag.

How much was the market /retail price when ex factory price of Bua was N4,000?
It was above N5500.

Why was it still expensive?
Because of AGO (Diesel) / Inflation.
The price of diesel has been skyrocketing and is between N900/N1100 per liter.

The farther the distance from the plants the more you pay to transport the cement.
Roads are bad especially in the South which means more days and diesel to get the cement to your market.
These factors made the price of cement high.
The distributors also do not find self collection profitable except the ones within the state of production.

Let's analyse the new reduction. Reducing N500 from the initial N4000 has insignificant impact because the price of diesel is still soaring.

It is important to note that 90% of cement sales come from direct delivery by the companies. Dan trans which is Dangote haulage company and Bua trucks. The prices for plant directs and company trucks hasn't changed. ONLY SELF COLLECTION (EX FACTORY PRICE) was adjusted.
Meaning the major source of getting cement which is the plant delivery method that includes transportation cost still remains the same.
Price wasn't reduced for that therefore distributors won't sell lower cos they still get cement from the company above N5030.

Bua plants are located in Okpella & Sokoto.
How many states are close to these places?
What is their production capacity?
Dangote cement has been the major company bridging supply gap for now. Bua will only come half close after the completion of his plant. This means the product for now will still not be enough.
Check your markets, only a few bags of Bua can be seen compared to Dangote. This is because that is what is readily available.

Benefactors of the ex factory price reduction are ;
1. Major distributors operating close to the plant who have fleets of trucks. Distributors who are faraway won't find this profitable

2. Markets within production states might to a little extent buy cement a little less. Maybe N5000 retail.
This is because when it was N4000 ex factory price. Same market bought at N5,500 per bag. I am factoring in the N500 reduction to arrive at N5000 but surprisingly it might not even reflect because of the constant diesel price increment. A distributor might decide to cushion the effect of the increment with the new N500 incentive. After all the major mode of supply which is direct deliveries still maintain old price.

If prices were still N5500 and above when ex factory price was N4000.
What makes you feel a N500 reduction will change alot?
Inflation rates on diesel will simply take the N500 reduction from the ex factory price cos the prices are going up by the day and when you add cost of transportation to the ex factory price. You will also arrive at the same plant delivery prices of N5030 - N5050 or slightly less if closer to the plant and more if far away from the plant.

Reason for the reduction in my opinion is this.
Bua wants to mop up cash from distributors who buy through self collection means all over the country instead of getting loan to finish his factory. Loans have high interest rates of 18 to 20+%
That's huge for billions or millions to be loaned.

This strategic price reduction only on ex factory prices is targeted at big distributors closer to the plant who have the financial muscle like the likes of a big distributor called Chinedu and Sons, Lafenax. Etc... This is a means of getting distributors to push more money into Bua Cement to facilitate his project without taking loans.
It is a common practice especially within cement companies.
I can tell you this for free.

Most of the increment recently was largely due to this. Dangote did same to get cash for his refinery.
The first company to increase or decrease price gains more because others have to react. Before they react, the first person has gotten a lion share of payments into their systems.
In cement companies. The pay in advance and raise ATCs (authority to collect) papers which are used to collect the goods in batches of either 300,600 or 900 bags till you finish your ATCs.
So this is a deliberate act to gather cash and that's why he was very strategic to reduce only the EX FACTORY PRICE.

If the reduction was done in the interest of Nigerians, they should be reducing the prices for plant deliveries which constitutes the major supply channel to all States within and outside the country which will in turn reduce the wholesale and retail price.
You cannot tell a distributor to incur alot transporting cement and reduce prices for you. Running at a loss. The N500 is just a little addition to help balance up the transportation cost.
If he adds the cost of Tp to the ex factory price. He will arrive at almost the same amount charged for plant deliveries.

Distributorship who do the self collection will only reduce price by 500 naira or not at all cos they could claim their supplies are not even self collection and you cannot argue it because the trucks look the same. Only insiders know what order is self collection and what order is direct delivery. If cement sold high (5500) when it was N4000 ex factory price yesterday. It won't sell for less today that ex factory price has been reduced to N3500.

It is like what the FG is doing.
Cost of goods are up by 200% and they are giving civil servants N35,000 only. What's the percentage increase compared to the increment in cost of living due to inflation from subsidy removal and naira floating.
Secondly how would the private sector which constitute major employer of labour be affected?
How would the unemployed also cope?

Exactly the scenario in the cement supply.
Just like the private sector, the direct delivery is the major route to supply.
You reduce only ex factory price like government giving only civil servants N35,000.
Will this affect the entire population?
Nope.

Only a few will feel the impact or not at all due to the cost of diesel for cement transporting.
Same way the N35k Palliative won't change much due to cost of living.

NOTE: DIRECT DELIVERY PRICES REMAIN N5030 - N5050 FOR ALL 3 GIANTS

OLD EX FACTORY PRICE BUA =N4000
NEW EX FACTORY PRICE = N3500

DANGOTE OLD EX FACTORY PRICE =N4010
NEW EX FACTORY PRICE = NOT DECIDED THEREFORE STILL N4010


Cc: Mynd44

Has monopolistic business man, Dangote reduced his own prices niii. BUA cement company about to blow in a big way in the Nigeria economy.

TruthsFM:
Has monopolistic business man, Dangote reduced his own prices niii. BUA cement company about to blow in a big way in the Nigeria economy.

Bua will blow but we will not feel the impact of the price reduction done today. That is my key point.

Until the plant delivery price reduces.
Ex factory price reduction is useless or insignificant.

It is not profitable for distributors therefore unattractive to alot of them. That is why when ex factory price was N4000 yesterday. Cement still sold for 5500 and above.

Dangote might also react by reducing ex factory price I assure you but ex factory price reduction doesn't affect you and I.

Distributors gain from it more. If at all the diesel prices doesn't take the N500 reduction.

They three giants Dangote, Bua and lafarge should reduce the plant delivery prices if they mean to help Nigerians.

Ex factory price reduction is not beneficial to you and I
Let me attach what ex factory price means so you could get a glimpse of what i am saying.

Nice analysis, thank you very much op.

As a man you suppose check my signature.
If after one week you do not get your desired result you are free to report my bank account for fraud.

joebeckz:

Bua will blow but we will not feel the impact of the price reduction done today. That is my key point.

Until the plant delivery price reduces.
Ex factory price reduction is useless or insignificant.

It is not profitable for distributors therefore unattractive to alot of them. That is why when ex factory price was N4000 yesterday. Cement still sold for 5500 and above.

Dangote might also react by reducing ex factory price I assure you but ex factory price reduction doesn't affect you and I.

Distributors gain from it more. If at all the diesel prices doesn't take the N500 reduction.

They three giants Dangote, Bua and lafarge should reduce the plant delivery prices if they mean to help Nigerians.

Ex factory price reduction is not beneficial to you and I
Let me attach what ex factory price means so you could get a glimpse of what i am saying.

hmm 🤔 you are right

Nigeria problems too much abeg. It is like we have no government. I bought cement 5100 this year, towards the end of that project I was buying 5400 and last week, I bought 5700. We don't have an economy, this is not an economy.

joebeckz:

Bua will blow but we will not feel the impact of the price reduction done today. That is my key point.

Until the plant delivery price reduces.
Ex factory price reduction is useless or insignificant.

It is not profitable for distributors therefore unattractive to alot of them. That is why when ex factory price was N4000 yesterday. Cement still sold for 5500 and above.

Dangote might also react by reducing ex factory price I assure you but ex factory price reduction doesn't affect you and I.

Distributors gain from it more. If at all the diesel prices doesn't take the N500 reduction.

They three giants Dangote, Bua and lafarge should reduce the plant delivery prices if they mean to help Nigerians.

Ex factory price reduction is not beneficial to you and I
Let me attach what ex factory price means so you could get a glimpse of what i am saying.

It was stated in their press release that it is the price to be sold at the market and they will monitor implementation.

Learnt at least something called ex factory price today

Sangoamadioha1:




It was stated in their press release that it is the price to be sold at the market and they will monitor implementation.

Sir,
Ex factory new price will be implemented.not plant direct price. Plant Direct price as at now is still N5000+ and this is the major supply chain.

Self collection constitute only 10% of total cement sales in the country.

Read the press release again and look out for Ex factory price.

A distributor who is far away from the plant will loose money.
If my truck goes to okpella. I will spend more bringing it to port harcourt or calabar. I rather stick to taking the direct delivery truck that will cost me N5030 or N5050 with transport included as a distributor than transport it myself or better still. I stick to the haulage contract with the cement companies where I get to transport the goods with my trucks and they pay me for haulage. Then I buy off the cement I transported.
This is the second major distribution chain within the cement industries.
Haulage for them but you must be a distributor and your truck must meet the standard of the company.
Most Dangote, Lafarge and Bua trucks you see on the road belong to individuals but with company stickers.
They are called CTS trucks.
Customers pay for the cement at 5030 - 5050 for those trucks.


Nothing will change.
I am speaking from within

Impressive analysis

joebeckz:

Sir,
Ex factory new price will be implemented.not plant direct price. Plant Direct price as at now is still N5000+

Nothing will change.
I am speaking from within

Read their release. It was market price that was stated and not ex depot price.

joebeckz:





NOTE: DIRECT DELIVERY PRICES REMAIN N5030 - N5050 FOR ALL 3 GIANTS

OLD EX FACTORY PRICE BUA =N4000
NEW EX FACTORY PRICE = N3500

DANGOTE OLD EX FACTORY PRICE =N4010
NEW EX FACTORY PRICE = NOT DECIDED THEREFORE STILL N4010

I don't think you're as knowledgeable on this subject because ex- factory price has never been as low as N4000 ( it has always been over N5000) and data on Dangote is available yet you claim its new ex-factory price is "not decided".

Dangote cement issued a press release just last week that it is not reducing any price so for now,there is nothing like new ex-factory price. The fake news that went round was that Dangote had reduced price by 50% but the company immediately denied it as fake news.

Before the price reduction, ex-factory price of BUA is N5250 based on the data sourced from the company and available in the public domain.

Only you know where you got the ridiculous N4000 you kept quoting without source. Most of you just have a negative mindset and thrive wishing ill luck even where there's none.Shikena. Eni a ki n jiri niyin gbogbo.

joebeckz:

Sir,
The 6000 I am seeing below and other prices not correct.
I have a complete list of cement prices for all cement companies but I won't share not to go against come policies. I am not speaking from Internet knowledge but from within.
Ex factory price for Dangote today is N4010
Bua was N4000 and now N3500

Plant delivery prices are N5030 to N5050.
DM me for more details on prices.

Sir, I know about margins on cement and it's ridiculous to suggest that Dangote and BUA gives 50% between ex-factory price and retail.

I still bought cement upper last week and I am aware that the profit margin can be as low as N100 even if it's divered for you in large volumes like 600 bags but here you're suggesting that it's about N2000 profit margin. Haba.
Again, Dangote has said it's not reducing prices. Please note that. BUA has reduced the ex-factory price and that takes off some prices from the retail price then it's good news

Op sounds like Dangote agent...at least something is reduced from Bua let Dangote do the same

Sangoamadioha1:




Read their release. It was market price that was stated and not ex depot price.

I got a personal message.
Attached is a press release also.

Thanks

FreeStuffsNG:
I don't think you're as knowledgeable on this subject because ex- factory price has never been as low as N4000 and data on Dangote is available yet you claim it's "not decided".

Before the price reduction, ex-factory price of BUA is N5250 based on the data sourced from the company and available in the public domain.

Only you know where you got the ridiculous N4000 you kept quoting without source. Most of you just have a negative mindset. Shikena. Eni a ki n jiri.

Sir,
The 6000 I am seeing below and other prices not correct except you mean retail prices in some markets but most markets sell between 5500 to N 5800 at retail.
I have a complete list of cement prices for all cement companies but I won't share not to go against come policies. I am not speaking from Internet knowledge but from within.
Ex factory price for Dangote today is N4010
Bua was N4000 and now N3500

Plant delivery prices are N5030 to N5050 from company.
You are referring to the retail prices. That's is totally in the hands of the distributors.
DM me for more details on prices

4000 naira was the ex factory price. Make your research. Try to understand before sharing your opinion sir.
Ex factory price was 4000 yesterday and today it is N3500 for Bua.

Google ex factory price Bua.

Bakrabas:
Op sounds like Dangote agent...at least something is reduced from Bua let Dangote do the same

I am not agent of one but all.


Dangote will react before the week runs out.

They always react.
The last increment was done by lafarge from 4700 to N5030 and they all reacted within a week. Bua took almost two weeks to react though. So they will also adjust their ex factory prices within a week but I am saying it has no impact at all.
The distributors will still use the same N500 reduction to buy diesel.

A true price reduction should be reduction on company price for plant deliveries. That means factoring transportation cost in before a reduction.

joebeckz:

I got a personal message.
Attached is a press release also.

Thanks

The authorized dealers are given rebates by the company so that they can sell at the factory price.
Rebates are commissions( usually on purchase and sales basis) given to dealers by a company so as to maintain ex factory prices in the market.

FreeStuffsNG:
I don't think you're as knowledgeable on this subject because ex- factory price has never been as low as N4000 ( it has always been over N5000) and data on Dangote is available yet you claim its new ex-factory price is "not decided".

Dangote cement issued a press release just last week that it is not reducing any price so for now,there is nothing like new ex-factory price. The fake news that went round was that Dangote had reduced price by 50% but the company immediately denied it as fake news.

Before the price reduction, ex-factory price of BUA is N5250 based on the data sourced from the company and available in the public domain.

Only you know where you got the ridiculous N4000 you kept quoting without source. Most of you just have a negative mindset and thrive wishing ill luck even where there's none.Shikena. Eni a ki n jiri niyin gbogbo.

Sir, I know about margins on cement and it's ridiculous to suggest that Dangote and BUA gives 50% between ex-factory price and retail.

I still bought cement upper last week and I am aware that the profit margin can be as low as N100 even if it's divered for you in large volumes like 600 bags but here you're suggesting that it's about N2000 profit margin. Haba.
Again, Dangote has said it's not reducing prices. Please note that. BUA has reduced the ex-factory price and that takes off some prices from the retail price then it's good news

You still don't understand.
N2000 is not profit.
Cost of transportation takes the ex factory price high.
They spend more than a million naira transporting. So you will add cost of liters of diesel to ex factory price.
For example it takes a truck over 800 to 1000 liters to bring cement from okpella to port and calabar.

You will factor that in. So you cannot make 2000 per bag Sir.

Distributor are making N400 per at the moment.
DM me for evidences. I don't wanna spill so much here.
I didn't just wake up to Google information and post here.
I hardly create threads but this is something I know too well cos I am......... ............
.

Sangoamadioha1:




The authorized dealers are given rebates by the company so that they can sell at the factory price.
Rebates are commissions( usually on purchase and sales basis) given to dealers by a company so as to maintain ex factory prices in the market.

Incentive given is N100 per bag Sir.
Before the scarcity ongoing at the moment. Distributors sold a bag for N 5000 but not anymore. They are presently making N400 or more depending on the market in the south. My friends from the North are making similar margins too.
But after the rains when roads are better. Price will reduce a little below the company price.

Company price is N5030 to N5050.
Forget the newly announced ex factory price.
It will not gonna change price.

If price falls below N5300. I owe you.
I mean it.. Drag me if i don't live up to my word.

Let me also correct you. Distributors are not given incentives to maintain ex factory prices.
They are given incentives to cushion loss effect.
If you say they are given incentive to sell at ex factory prices. You simply mean companies are making losses cos ex factory price doesn't include transportation.
So you mean a company will give you incentive that includes the transportation cost?
No now...
Incentives are given to help distributors sell at plant delivery prices not ex factory price.

Ex factory price doesn't include transporting
Plant delivery price includes transportation cost

So they give you N100 incentive to less from company price of N 5030. So you don't run at a loss.

Fantastic analysis.... The thing is more and more efforts still needs to be put in place if we are going to have a headway

Now inflation will take out that reduction, and price might still not go down

FreeStuffsNG:
I don't think you're as knowledgeable on this subject because ex- factory price has never been as low as N4000 ( it has always been over N5000) and data on Dangote is available yet you claim its new ex-factory price is "not decided".

Dangote cement issued a press release just last week that it is not reducing any price so for now,there is nothing like new ex-factory price. The fake news that went round was that Dangote had reduced price by 50% but the company immediately denied it as fake news.

Before the price reduction, ex-factory price of BUA is N5250 based on the data sourced from the company and available in the public domain.

Only you know where you got the ridiculous N4000 you kept quoting without source. Most of you just have a negative mindset and thrive wishing ill luck even where there's none.Shikena. Eni a ki n jiri niyin gbogbo.

Sir, I know about margins on cement and it's ridiculous to suggest that Dangote and BUA gives 50% between ex-factory price and retail.

I still bought cement upper last week and I am aware that the profit margin can be as low as N100 even if it's divered for you in large volumes like 600 bags but here you're suggesting that it's about N2000 profit margin. Haba.
Again, Dangote has said it's not reducing prices. Please note that. BUA has reduced the ex-factory price and that takes off some prices from the retail price then it's good news

Drop your Phone if you don't know what to type.

You went online and get some laughable prices.

Cement price is what every Dick, Tom and Harry knows, whether you're into building Projects or not.

Spot on.

Analysis.

Sangoamadioha1:




It was stated in their press release that it is the price to be sold at the market and they will monitor implementation.

Go and read it again seven times.

ambale:
Fantastic analysis.... The thing is more and more efforts still needs to be put in place if we are going to have a headway

Now inflation will take out that reduction, and price might still not go down

You get the point.
Diesel price will take out that N500 reduction.

Alot of persons think. The N3,500 is a general reduction. The key word ex factory price is of importance.
Add the transportation cost to the ex factory price.

You still arrive at same plant delivery price of N5000+
So how does it affect us?
Until inflation reduces, prices remain same.
Or until actual company price inclusive of transportation reduces.
Cement will still be sold way above N5000k per bag at retail since company prices are still between N5030 & N5050

jmoore:


Go and read it again seven times.

😂 i guess he didn't see the ex factory price stated boldly.

joebeckz:

Incentive given is N100 per bag Sir.
Before the scarcity ongoing at the moment. Distributors sold a bag for N 5000 but not anymore. They are presently making N400 or more depending on the market in the south. My friends from the North are making similar margins too.
But after the rains when roads are better. Price will reduce a little below the company price.

Company price is N5030 to N5050.
Forget the newly announced ex factory price.
It will not gonna change price.

If price falls below N5300. I owe you.
I mean it.. Drag me if i don't live up to my word.

No i won't bet with you but i believe Bua would reduce to ₦4800. I get where you are coming from but pessimism is affecting your analysis.

joebeckz:

I am not agent of one but all.


Dangote will react before the week runs out.

They always react.
The last increment was done by lafarge from 4700 to N5030 and they all reacted within a week. Bua took almost two weeks to react though. So they will also adjust their ex factory prices within a week but I am saying it has no impact at all.
The distributors will still use the same N500 reduction to buy diesel.

A true price reduction should be reduction on company price for plant deliveries. That means factoring transportation cost in before a reduction.

Forget about this your Diesel matter.

Five hundred naira reduction is not a small money in Cement business and if you're into building Projects.

Rarely, one goes to the Market to buy just one bag of cement.

The price will still be reduced by that five hundred.

If the ex factory price as you're emphasising here was increased by five hundred yesterday, today Cement price will add the same all over the Country.

jmoore:


Go and read it again seven times.

Shift from here make i talk with reasonable people. No be only seven times na seventy seven times 🙄

Sangoamadioha1:





Shift from here make i talk with reasonable people. No be only seven times na seventy seven times

When you don't know the meaning of ex factory price and you still insist you are right after being corrected. Confidence in ignorance.

Clap for yourself!

jmoore:


When you don't know the meaning of ex factory price and you still insist you are right after being corrected. Confidence in ignorance.

Clap for yourself!

Hey I said shift, if you don't understand my argument that is not my problem 😏

joebeckz:

I am not agent of one but all.


Dangote will react before the week runs out.

They always react.
The last increment was done by lafarge from 4700 to N5030 and they all reacted within a week. Bua took almost two weeks to react though. So they will also adjust their ex factory prices within a week but I am saying it has no impact at all.
The distributors will still use the same N500 reduction to buy diesel.

A true price reduction should be reduction on company price for plant deliveries. That means factoring transportation cost in before a reduction.

Okay bro.Joe quote me when it happens as I am anticipating for your aforementioned reaction by DanCement and elephant

joebeckz:

You get the point.
Diesel price will take out that N500 reduction.

Alot of persons think. The N3,500 is a general reduction. The key word ex factory price is of importance.
Add the transportation cost to the ex factory price.

You still arrive at same plant delivery price of N5000+
So how does it affect us?
Until inflation reduces, prices remain same.
Or until actual company price inclusive of transportation reduces.
Cement will still be sold way above N5000k per bag at retail since company prices are still between N5030 & N5050

💯