THE Chairman of BUA Foods Plc, Abdul Samad Rabiu, on Thursday, blamed the artificial scarcity and rising cost of foodstuffs in Nigeria on the activities of some greedy distributors and producers.
This was while the business mogul applauded President Bola Tinubu for granting duty waivers on food imports into the country.
Rabiu disclosed this at the 7th annual general meeting of the company in Abuja.
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.”
The development comes a few days after BUA Foods announced that it signed an agreement with one of the world’s leading pasta equipment manufacturing companies, FAVA, to expand its pasta production facility.
Rabiu said the collaboration with the Italian giant was in line with the company’s strategic roadmap towards contributing to food security in Nigeria.
Meanwhile, the Managing Director of BUA Foods, Ayodele Abioye, also emphasised the company’s proposed expansion, which he said was long overdue.
Abioye stated that despite the economic hardship and lull in commercial activities, the company has continued to thrive and now has a market capitalisation drive that has peaked at N7.11 trillion.
“Remember, this is a Nigerian business that has been in existence for the last 30 years. We debuted on the Nigerian Exchange three years ago because we wanted to democratise our wealth creation and have more public participation.
“We started listing with just 377 shareholders. Today, our shareholders’ count is 5,000. That is a very huge leap. When you also look at the market capitalisation, we started at N5.8 trillion. Today, we are around N7.11 trillion,” he stated.