The inauguration of BUA Cement Plc’s ultra-modern three million metric tonnes per annum Sokoto line four factory and the groundbreaking of the company’s line five have been described as major investments that would boost cement production capacity.
Cement, a binding substance used in building and construction industries, is used in buildings which are expected to be exposed to constant high humidity or water. From available statistics, Nigeria is blessed with a wide range of raw materials used cement production, which are calcium from limestone, silicon, aluminium, iron and gypsum scattered across states in the country. It is on record that limestone formations cut across numerous states such as Abia, Anambra, Bauchi, Bayelsa, Benue, Borno, Edo, Enugu, Imo, Ogun, Ondo and Sokoto. The industry embarked on backward integration programme in 2002. The Nigerian cement sector has metamorphosed from being import-dependent to a growing hub for cement export in Africa. The installed capacity has expanded to outstrip estimated demand, with government policies such as tax relief programs and ban on cement importation among others, encouraging capacity expansion among players.
In 2020, BUA Group consolidated its cement operations and listed BUA Cement Plc on the Nigerian Stock Exchange with a total combined installed capacity of eight million mtpa and a market capitalization of N1.18 trillion ($3.3 billion), making it the second largest cement producer in the Nigerian market and the largest cement producer in the North Western region of the country.
BUA’s high quality products have consistently pulled Nigerians to the company as indicated in its 2021 financial results. The unaudited financial results for the year ended December 31, 2021 showed that the company’s revenue went up from N209.4 billion in 2020 to N257.3 billion in 2021, which is a 22.87 per cent improvement. Similarly, gross profit went up by 25.7 per cent to N120 billion in the year under review from N95.4 billion it was in the previous year. Profit before tax rose by 33 per cent from N78.87 billion in 2020 to N105 billion in 2021 just as Profit After Tax increased by 27 per cent from the N72.3 billion it was in 2020 to N91.74 billion in 2021. In the same vein, earning per share rose from N214 in 2020 to N271 in 2021. With this, BUA Cement has improved the worth of each of its shareholders by 27 per cent within a year.
President Buhari, BUA boss, Samad RABIU flanked by Sokoto, KEBBI and Katsina State Governors
But the founder and chairman of BUA Group, Alhaji Abdul Samad Rabiu, said BUA Cement was targeting to ramp up its total production capacity to 17 million metric tonnes of cement per annum next year in order to help lower the price of the product.
In his welcome address during the unveiling of the new plan and groundbreaking of the line five, the industrialist pointed out that in the past six years, BUA Cement has completed four plants; two in Obu, Edo State and two in Sokoto (of which the Sokoto line 4 is the fourth) with BUA’s total production capacity now standing at 11 million tonnes with the completion of this plant.
He disclosed that next year, BUA Group intended to complete the construction of two new plants of three million metric tonnes each, saying construction is already on-going, one in Edo and the other in Sokoto.
“We expect these plants to be completed next year, which will bring our total production capacity to 17 million metric tonnes. We look forward to Your Excellency coming to commission them by the first quarter of 2023,” he added.
Rabiu pledged that BUA would continue to invest in the cement industry until Nigeria becomes self-sufficient and cement was made available, accessible, and affordable for all Nigerians.
He stated, “There are many reasons one can attribute to the important nature of this plant. The attendant effect of these investments in new factories goes beyond the community and the state. It extends to the region and the entire country. From a job creation and economic standpoint, the Sokoto plant continues to be the largest private sector employer of labour in the North-western part of Nigeria.
“Also, by adding value to resources mined in Nigeria, Nigeria is being saved billions of US dollars in foreign exchange that would have been spent on importation, whilst also ensuring product availability.
“In fact, 95 per cent of all the raw materials used in our cement manufacturing process are sourced locally. In addition to this, and our investment in social impact and CSR programmes for the community and Sokoto State at all levels, we are also committed to environmental sustainability.
“We have diversified our energy sources by introducing greener alternatives, in this case, LNG to power the kiln and 48 megawatts power plant. Our power plants are now running on 100 per cent LNG, leading to reduced carbon emissions. This is the first of its kind at any cement factory in Nigeria.”
Rabiu said this meant also that as soon as the AKK gas project came on stream, BUA would be ready to be one of the first off-takers. This would also encourage further industrialisation within the region, open new industries and ensure greater development and prosperity for this region and the country in general.
He added, “As a proudly Nigerian company, we will do our best to continue to support those efforts. The support of the CBN and its governor in setting up this gigantic project is also worthy of mention.
“So far, we have invested over a billion dollars in the past four years and we urge the CBN to continue to support industries like ours that use locally sourced raw materials to add value because, as mentioned earlier, these industries potentially save the country billions of dollars yearly and also ensure products are readily available across the length and breadth of the country.”
President Mohammedu Buhari commended the company for the strides in supporting the government’s economic diversification and job creation agenda.
He noted that the company, which had completed four new cement plants of similar capacity in the last five years in different parts of the country and was set to complete two more plants soon, had
completed four new cement plants of similar capacity in the last five years in different parts of the country and was set to complete two more plants soon, had shown through these investments that they believed in Nigeria and its potential.
Commending BUA and other entrepreneurs for making Nigeria self-sufficient in cement and a net exporter of the strategic product, the President said, “I am pleased that through these investments, BUA Cement has created employment opportunities for our citizens. Today, BUA is the largest employer of labour in the North-west region.
“I always remind Nigerians that every region, indeed, every state, in Nigeria sits on huge reserves of resources. For example, in this area, Kebbi, Sokoto and Zamfara can boast of rice production, gold and other precious metals development and, of course, heavy industries like cement manufacturing.
“We remain prepared to support serious investors to set up businesses that will take advantage of these opportunities through value addition so as to take advantage of the huge market here, as well as in the greater African region and the world at large.”
Also speaking at the ceremony, the governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, urged manufacturers in the country to urgently control the rising prices of cement and other building materials.
Emefiele noted that manufacturers must first strive to satisfy the local market to help make cement affordable before exporting the product to external markets.
“Indeed, there has recently been calls by construction companies urging our steel and cement manufacturers to do something about the sky-rocketing of these two essential items in the construction industry,” he said.
Emefiele said the cement industry remained key to solving the country’s unemployment challenges as well as boosting growth, saying “We are aware that some of our cement manufacturers are producing for both the domestic and export markets, but we urge them to pay more attention to satisfying the domestic needs so as to bring down prices.”
He reiterated the central bank’s commitment to providing needed support for importation of spares, plants and equipment needed to increase the production capacities of cement plants in the country.
While calling on prospective investors to take advantage of the current incentives provided by government to boost the sector, he said the CBN was ready to provide the needed financing for both current and new investors in the industrial sector for the importation of requisite machinery.
He pointed out that as part of the efforts by the current administration to drive productivity in the industrial sector and conserve foreign exchange, a decision was taken by the government in 2015 to restrict access to foreign exchange for imports of 43 items, which could be produced in Nigeria, but for which billions of US Dollars were being expended annually on imports.
He said, “Our nation has been able to conserve billions of dollars, as no dollar from our external reserves has been
able to conserve billions of dollars, as no dollar from our external reserves has been spent on imports of cement into the country in the last seven years.” He said the investments had saved and created several thousands of jobs across multiple sectors.
Emefiele pointed out that the achievements so far recorded in the cement sector were not a coincidence but a reflection of the success of the backward integration policy of the Buhari administration.
The CBN Governor said with significant opportunities in housing, construction and related industries, there were still sufficient room for additional investments in the sector. He urged potential investors to take advantage of these opportunities.
He also assured current and prospective investors in the industrial sector that the apex bank was ready to collaborate with stakeholders to facilitate the development of a viable manufacturing sector in Nigeria.
Emefiele said, “For those who are willing to invest in new Greenfields or existing Brownfield projects, the CBN will provide all the support needed both in naira and dollars to import plant and equipment to actualise your dreams.”
He said the CBN’s stance was in harmony with the apex bank’s resolve to create a professional and people-oriented central bank to act as financial catalyst for job creation and inclusive growth in Nigeria.
Emefiele said, “I am particularly delighted to see that the painstaking efforts and ingenuity of Nigeria’s private sector are yielding bountiful fruits in broad daylight. These efforts, such as the one being displayed here today by the BUA Group, are critical complementary ingredients to reducing unemployment and boosting production activities in our country.”
He added that, “The BUA Group’s investment in Sokoto and in other parts of Nigeria reflects their belief in the country, and in the immense opportunities available in the industrial sector, given the abundance of human and natural resources in Nigeria.”