Nigerian billionaire industrialist Abdul Samad Rabiu, who sits at the helm of BUA Group, one of Africa’s rapidly expanding manufacturing conglomerates, has expressed optimism that the completion of two new cement factories by the end of this year will reduce cement prices.
Rabiu’s statement follows a strategic agreement between BUA Cement Plc, Rabiu’s cement company, and Sinoma International Engineering Co., Ltd., a subsidiary of China National Building Material Group Co., aimed at significantly expanding BUA Cement’s OBU cement line in Okpella, Edo State.
During BUA Group‘s seventh Annual General Meeting in Abuja, Rabiu revealed that the two forthcoming factories, Obu Line 3 and Sokoto Line 5, will boost the company’s capacity by an impressive six million tonnes, pledging the company’s support for the Federal Government’s initiatives to reduce cement prices in the nation.
“I understand that the Government is concerned that the price of cement is high at almost N5,000 ($6.6) per tonne,” Rabiu acknowledged. “I appreciate where the government is coming from and the frustration from all the issues in the country. The price of cement at N5,000 ($6.6) is not high. If we look at the rate of the U.S. dollar today, the import of cement will be at N5,000 ($6.6). The cement cost, insurance, and freight to any port in Nigeria will be in the region of about $100 a tonne. So, at $100 per tonne, if you take N800 to $1, it will be N4,000 ($5.28) per bag. Then the port cost and transportation from the port.”
BUA Cement operates with a total installed capacity of 11 million metric tonnes per annum (mtpa), positioning itself as Nigeria’s second-largest cement producer, trailing Dangote Cement, which boasts an extensive production capacity of 51.55 million tonnes annually across ten countries.
With this impending expansion phase becoming operational, BUA Cement is expected to solidify its position as a prominent cement manufacturer in Nigeria. This strategic move is anticipated to positively impact the company’s revenue and earnings, reaffirming its robust standing within the industry.
Recent financial reports from the company indicate a four percent increase in profits, rising from N63.62 billion ($82.01 million) in the first half of 2022 to N61.36 billion ($79.1 million) at the close of the first half of 2023.
This resilient financial performance is attributed to a remarkable 17-percent surge in the group’s revenue, which increased from N188.56 billion ($243.1 million) in the first half of 2022 to N221.06 billion ($284.9 million) in the corresponding period of 2023.
