The Chairman of BUA Foods Plc, Abdul Samad Rabiu, has revealed that his company manufactures and sells the cheapest products in the Nigerian market.
Investors King reported that Abdul Rabiu recently announced plans to expand the pasta production unit of the company.
After signing an agreement with FAVA (Italy), one of the world’s leading pasta equipment manufacturing companies, BUA Foods renewed its planned expansion.
Rabiu announced the expansion in a statement signed on Wednesday by BUA Foods Director of Marketing and Corporate Communications, Adewunmi Desalu.
However, speaking at the 7th annual general meeting of the company held in Abuja on Thursday, Rabiu recounted how his firm maintained the price of flour at 50,000 Naira when it was sold for 70,000 Naira.
The businessman blamed manufacturers and distributors for the scarcity of food in the country.
He said, “BUA products are the cheapest in the market. And because we have other companies producing similar products, it is very difficult to price them low. For instance, a few months ago, the price of flour went as high as N70,000 per bag. We retained ours at N50,000 for quite some time to try and force other companies to also come down. But when they saw it was going to happen, they deliberately stopped production, and the prices kept going up.
“So when we were at N50,000, the distributors added N20,000 and were selling at N70,000 per bag. At one point, customers were making almost N20 million per truck of 75 tonnes of flour.
Yes, it happened. While we were there at N50,000, still puffing and praying for the prices to come down, some companies were not happy that we were keeping the prices low.
“That was why they suddenly stopped production to create scarcity. With that scarcity, the price kept going up. So that is part of the problem. When we saw that, we knew it did not make sense for us to continue selling at N50,000 when the market was at N70,000. Our production is substantial, but there are two other companies that are bigger than us.
However, we believe that by next year, we are going to be bigger than them.”
