The price of a 50kg bag of cement in Nigeria has risen to N12,000 in several states, intensifying concerns over housing affordability and the rising cost of construction projects nationwide.
BUA Cement, a major player in the industry, has attributed the sharp increase mainly to persistent foreign exchange volatility and surging energy costs.
Speaking at the company’s 10th Annual General Meeting held in Abuja, Chairman Abdul Samad Rabiu explained that the continued weakness of the naira has driven up the cost of imported spare parts, machinery components, and other essential inputs. He noted that energy costs now account for nearly 60% of total production expenses.
Dramatic Cost Increases
Managing Director Yusuf Binji provided specific examples of the pressure. He disclosed that the monthly natural gas bill for one of the company’s plants in Edo State skyrocketed from N4 billion to N16 billion following the naira devaluation. Similarly, diesel prices jumped from N930 per litre in March to nearly N1,850 per litre within two months, partly fuelled by geopolitical tensions in the Middle East.
Binji also highlighted transportation as a critical cost factor, stating that logistics now make up roughly half the final price of a bag of cement.
Strong 2025 Performance
Despite the challenging operating environment, BUA Cement posted impressive financial results for 2025. Revenue increased to N1.2 trillion, up from N876.5 billion in 2024. Profit before tax surged by 367% to N465.3 billion, while profit after tax rose significantly to N356 billion from N73.9 billion the previous year.
Shareholders at the AGM approved a final dividend of N10 per share.
Expansion Plans Moving Forward
The company remains committed to long-term growth. A new production line in Ososo, Edo State, is nearing completion, and another has been announced for Sokoto State. These projects are expected to add 6 million tonnes to annual capacity, lifting BUA Cement’s total installed capacity to 23 million tonnes by the end of 2027.
Rabiu acknowledged that recent foreign exchange reforms, though initially painful, have brought greater stability to the market, allowing manufacturers to forecast costs more reliably for up to nine months.
Industry observers warn that the latest price hike from N11,000 to N12,000 per bag could further slow construction activities and make decent housing increasingly out of reach for many Nigerians. Experts identify high energy and logistics costs as the dominant factors behind the current price surge.
