KEY POINTS
- BUA Chairman lays cause of high foodstuff prices at the doorsteps of greedy distributors.
- BUA Foods enters new deal to boost pasta output capacity.
- Market capitalization at BUA has expanded from ₦5.8 trillion to ₦7.11 trillion.
The Chairman of BUA Foods Plc Abdul Samad Rabiu blamed the continuous increase in food prices in Nigeria to the act of some distributors and producers. He disclosed this during the 7th annual general meeting of the company held in Abuja where also expressed his support for the presidential candidate of the All Progressive Congress, Bola Tinubu move to grant duty free waiver on imported food items.
Rabiu explained that while BUA has continued to source for ways of keeping its foodstuff prices low, however competitors in the industry only moved out of the production line with the aim of causing scarcity of foodstuff and thereby inflating the prices further. “BUA products are currently among the cheapest out here,” Rabiu spoke adding that at one time BUA was selling flour at ₦50,000 per bag while others were selling at ₦70,000. But distributors took advantage of the price disparity and increased the prices at which they sold their goods while making large margins.
Speculation which make the prices in food to be high
Rabiu explained how distributors raised the price of flour to the retailers by putting ₦20,000 more to the cost of each bag of flour, making it unprofitable. This manipulation, he alleged, leads to creation of artificial shortage in the market thereby leading to further increase in prices. Looking at this trend we said it was worth stopping selling at ₦50, 000. We still produce considerably, nonetheless, two other companies are larger than we are. But that is of course with the understanding that we will be able to beat them next year,” Rabiu said.
Business strategies namely, expansion strategies and growth in the market
According to The Punch, In order to meet increasing demand, BUA Foods recently entered into an order production deal with FAVA, an Italian manufacture of pasta equipment. BUA Foods’ Managing Director, Ayodele Abioye, said that the necessity of the company’s expansion was long overdue and emphasized that BUA Foods is determined to support food security in Nigeria.
Abioye also emphasised impressive growth in the market share of BUA Foods stating that while the company’s market capitalisation hit ₦7.11tn when compared to the market cap of ₦5.8tn when it was listed in Nigerian Exchange three years ago. “From having only 377 shareholders, serving over 5,000 at present. That growth is an attestation to the company’s success and the public confidence in our functioning, he adds.
