One of Nigeria's three cement giants, BUA Cement Plc, has said there are no plans to increase the price of its cement for the "foreseeable future" despite the recent 10% price hike by their main competitor.
In a letter sent to the company's distributors, customers, and seen by our reporter, the company called on the general public to ignore any rumour of a price increase.
It said that the timing was not right and there were no justifiable business reason for any increase whatsoever.
"We are compelled to release this statement following requests from our distributors and customers seeking clarification as to whether BUA also intends to increase the price of its cement.
"This is in view of a purported increase of N260 by another major Cement producer.
"This other cement producer alluded to by BUA is suspected to be a close rival, as our quick market survey showed.
"We are now aware that the firm has increased the price of its Cement (ex-factory) by N260 effective Monday, June 14.
"BUA is not a part of this increase and will not seek to increase the price of its cement (ex-factory) in the foreseeable future.
"BUA, therefore, restates its earlier position communicated on April 24, that it will not join in any increase in the prices of Cement for the foreseeable future.
"Whilst we believe it is the prerogative of any company in a free-market economy to determine the prices of their products as they deem fit, based on their urgent business needs, our position not to increase our own prices is anchored on the following:
"We are aware of the feedback and outcry from the public, and the government on the high retail price of cement in a period of economic recovery.
"BUA is also of the firm belief that the current retail prices of Cement are higher than normal, hence our earlier communication not to increase ex- factory prices in the foreseeable future."
"Since our last communication to our customers and the public, we have noticed a slight decline in the price of cement due to the commencement of the rainy season - during which demand is reduced.
"We believe that any further increase in prices will hamper a continuous downward trend as well as hamper a normalization/stabilization of prices of the commodity.
"As a responsible corporate entity, we refuse and reject associations with any actions that are deemed capable of projecting any industry we operate in as a cartel.
"Hence, whilst we respect that the said company has decided to increase their prices, we are not questioning the reason(s) why, but would like to make clear BUA's position on a price increase.
"The timing is not right for any increase on BUA's part, and we do not have any justifiable business reason to increase our prices (ex-factory) anytime soon.
"We hope that despite this producer's price increase, the overall retail price of cement and the current downward trend in prices will not be affected negatively."
Vanguard News Nigeria
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