As the Bua Cement Price Reduction Continues to Dominate the Nigerian industrial sector, one may ask what model the Bua Cement Company would deploy to actualize such price reduction in this critical economic time in Nigeria. At Niger Investor, we seek to explore the potential exploits that the firm may deploy to bring its price reduction to reality, possibly without hurting their business, consumers or employees; whichever way, it does seem like a win-win situation could be possible if proper exploit is the case; however it doesn’t seem likely thereby prompting the making of this analysis to envisage what approach they could utilize in this delicate time to achieve such challenging objective otherwise, they could resort to exploitation.

The thing about exploits is once it fails, it could result in exploitation; in this case, it could go either white hat or black hat, and in another scenario then it could go grey hat; whichever way, It is tough to tell now if the news making rounds about the Bua Cement price reduction is mere speculation or reality however while we wait for this price reduction to take effect or be denied, Niger Investor seeks to examine the potential impact of this reduction move at a time where radical reforms by the Government are driving the cost of living and running a business higher in Nigeria; perhaps the news is true, how does the business hope to cope?

We would first look into the potential exploitation that could arise; even though we hope that there could be an ingenious exploit that the company may deploy to achieve an effective price reduction; still, we still understand that sometimes business could be a brutal terrain and usually monopolists have a way of making someone else pay for their cheap supply indirectly, making one ask how sincere the moves of Bua Cement price reduction are? As such, we would look into the potential exploitation before analyzing the possible exploits as there has been a series of exploitation of the Nigerian masses by the monopolists in recent times. The question is whether they are sincere or this is another cloudy move that could open up another channel of advanced exploitation.

Although Nigerians have lamented the actions of the duo cement monopolists (Dangote Cement and Bua Cement) whereby they sell cement at a higher price in Nigeria while selling cheaper in other countries, whereas since this cement is produced here then everything being equal, such cement price ought to be cheaper in Nigeria but earlier on, the reverse was the case.

Now that there’s a wave of public outcry making for consideration, especially following the outcry by the Nigerian Minister of Works  (David Umahi) on the high cost of cement in Nigeria, which may push his ministry to go for importation of cement for his numerous proposed concrete road projects, these series of events may have impacted the Bua Cement Price Reduction Decision hence the move.

But what is the business feasibility of such a price reduction now?

Given that there’s current naira devaluation, petrol subsidy removal and general economic hardship, price reduction doesn’t seem like sound economics, but is the company hoping to gain back the money through other means? Could this indirectly impact employee welfare? Could there be a wage reduction, could consumers get less value, or is the company willing to make less profit? What is the long-term objective of such a move at a time like this?

Price reduction has always been a sound business move sometimes, but not always; of course, price reduction could usually translate to more sales. However, several businesses have devised several shady methods to make up for their cheap products in the past, and in this case of Bua Cement price reduction, we seek to look first at several loopholes that the company may exploit should they go ahead with this price reduction when it is obvious that the cost of production has gone up and Labour Union is clamoring for increased wages.

We hope they are sincere and reduce their price without exploiting the public or their workers; let’s look at these potential exploitations that may arise.

Wages Reduction

Most likely, the company would appreciate that if this price reduction is going to materialize, everyone has to make a sacrifice one way or the other; this could translate to situations where workers’ wages have to be reduced, but a time like this when the Labour Union of Nigeria has been clamoring for wages increase, reducing worker’ wages could come with an adverse effect for the Bua Cement; however, we are looking at exploitations that the Bua Cement Price reduction moves may capitalize on to materialize.

Implementation of Longer Work Time

Very similar to wage reduction but altogether different. An increase in work time could be another exploit the company could make to see their price reduction move take effect. Increasing work hours, while likely increasing production, may also cause fatigue and long-term disinterest among workers, especially when such increased work hours do not translate to increased welfare.

Decreased Quantity

Another way the Bua Cement Price Reduction policy may see the light of the day without incurring heavy losses is by decreasing the product quantity. This may not be a noticeable difference, but packaging 49.7kg in what used to be sold as 50kg could be one of the many aspects that could be exploited. While a reduction by 0.3KG for the likely new price may seem like a very small quantity of cement when we consider a bag or even a few bags; however, when we consider it from an industrial production perspective, we could be looking at a huge difference.

Reduction in Quantity

Reduction of quantity could be another gift from this cheaper product when the cost of materials and production is at an all-time high; perhaps they may reduce the price and the quantity alone. It was easier to reduce the price earlier, so it is suspicious to reduce it at this critical moment. How do they seek to make up? Understandably, some raw materials in production are cheaper than others; what if they go for the cheaper materials or more of the cheaper materials to give us this cheaper product, which may result in lower quality? Lower quality in crucial construction materials like cement could result in disaster.

Tax Evasion or Manipulation

To reduce the cost of business, corporations have usually applied for tax waivers, official tax reductions, or fraudulently evading or manipulating taxation to reduce costs. The official channel, of course, would be applying for a tax waiver or reduction; however, this has to do with whether the Government intends to grant such. As seen with the Tinubu Government’s aggressive taxation system, it hints at even taxing the rich more. Perhaps there’s no official reduction or waiver; the corporation may also go the shady way of tax evasion or manipulation. Several businesses have done that, so it won’t be surprising if going that channel is one of the approaches the Bua Cement Price Reduction may explore or exploit to materialize.

Potential Exploits that could make the Bua Cement Price Reduction Effective

Now that we have looked at the potential exploitation, let’s look at the positive exploits that the firm may deploy to bring an effective price reduction without shortchanging the people or their employees. These positive exploits could lead to sustaining a business while significantly reducing price. It is important to look at these positive ways that the price reduction may be effectively pursued without much harm to the company or exploiting loopholes negatively; it is only when we don’t prejudice the company with bias that we can give reliable insight.

Enhanced Logistics

By enhancing logistics, costs may be reduced; this could be positive if a more effective distribution mechanism and methods were deployed.

Decentralized Production

Production can be taken closer to the consumers in different locations; instead of producing in one location and distributing nationwide, local production can be established in other locations where raw materials are available or accessible. Such locations that also meet other production requirements should be considered for production setup to take the goods closer to the people and reduce transportation and other costs. This business model would reduce the distribution budget, especially at a time when the cost of transportation is rising. Taking production closer to the consumer community would make distribution easier and impact production costs, as job creation could create local loyalty and patronage.

Tax Waiver or Reduction Appeal

The firm can also apply for tax reduction or waiver; the Government may consider granting such an appeal given the troubling economic meltdown across the country.

Energy Efficiencies System

Another way the Bua Cement could positively model their business to actualize the proposed Bua Cement Price Reduction would be to implement an energy-efficient system. Energy considerations are crucial in industrial production.

Shareholders Appeal 

Appealing to shareholders to make sacrifices and expect less profit is another exploit the company may utilize; the other side of the appeal is that when it doesn’t go well with shareholders, it could impact company trust, value and prospects from the shareholders’ perspective yet this is a much practical approach if the burden of the Bua Cement Price Reduction is distributed top-down.

Gray Hat Approach to Actualizing the Proposed Bua Cement Price Reduction

A combination or a deployment of all of the above could lead to a grey hat approach to pursuing this price reduction objective by Bua Cement. With the grey hat approach, the company may choose to deploy a combination of positive and negative approaches to sustain the business.

Conclusion

Whichever way the company chooses to achieve this price reduction in this critical time remains to be seen; we also hope they don’t deny such a move in the coming days; it is not unusual for corporations in Nigeria to release contradictory statements. Some other times, news like the “Bua Cement Price Reduction” could be mere speculations of rumor mongers, while in another twist of event, they may realize how impossible it could prove to implement the price reduction at the current state of things and jettison the idea altogether. Whatever the case, we keep watch; we hope the interest of the masses, the employees, and the business can be protected. However, a situation where everyone wins while being the best isn’t always the case.

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