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Tuesday, February 27, 2024

Committed to Making Cement Affordable, BUA Invests $1bn in New Capacity

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BUA Cement says it remains fully committed in making cement more available, affordable, and accessible using raw materials available locally.

The fastest growing cement company in Nigeria has also invested over $1 billion in the past four years to increase cement availability in the country.

This was disclosed in a speech by Abdul Samad Rabiu, CON, Chairman, BUA Cement at the Commissioning of the BUA Cement Sokoto Line 4 factory, by Nigerian President Muhammadu Buhari.

“In the past 6 years, we have completed 4 plants – two in Obu, Edo State and two in Sokoto (of which this sokoto line 4 is the fourth) with BUA’s total production capacity now standing at 11million tonnes with the completion of this plant,” Rabiu, said.

“Next year, we intend to complete the construction of two new plants of 3 million metric tonnes each for which construction is ongoing – one in Edo and the other here in Sokoto. We expect these plants to be completed next year which will bring our total production capacity to 17million metric tonnes. We look forward to Your Excellency coming to commission them by the first quarter of 2023.”

Rabiu, noted that 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 as 95% of all the raw materials used in BUAs cement manufacturing process are sourced locally.

President Muhammadu Buhari commissioned Line 2 with an installed capacity of 500,000 capacity.

The president commended BUA Chairman for creating jobs and alleviating poverty through copious investment in projects that are pivotal to economic growth.

“Through this investment BUA has shown that they believe in Nigeria and its potential. I am pleased that these investments have created employment and the company is the largest employer of labour in the North-West,” said Buhari.

“When completed the project will reduce operating costs in the region. We will continue to provide security,” said Buhari.

On his part, the CBN governor Godwin Emefiele said the new cement plant will stimulate economic growth and that the project was by equity contribution without resulting in external borrowing.

Emefiele added that the central bank will continue to enable cement makers access to foreign exchange to import plant and machinery.

“We urge companies to pay more attention to domestic needs so that the price of building material can come down,” said Emefiele.

In 2020, Obu Cement Company Plc consolidated its operations with CCNN Plc, leading to the emergence of BUA Cement and its subsequent listing on the Nigerian Stock Group (NGX), formerly known as the Nigerian Stock Exchange.

In 2020, the Company attained more milestones with its emergence as the constituent of the Morgan Stanley Capital International (MSCI) frontier index; together with the issuance of its maiden corporate bond of N1155 billion, making it the largest corporate bond issuance in the history of Nigeria’s debt capital market.

With the combined installed capacity of 8mmtpa (Obu plant, 6mmtpa and Kalambaina plant, 2 mmtpa), BUA Cement Plc is the largest cement producer in the North-West, South-South and South-East regions of the country and is currently the second-largest producer of cement in Nigeria with the commissioning of the 3mmtpa, line-4 at Sokoto State.

Analysts say that the country’s huge infrastructure deficit is a boon for BUA cement who is increasing capacity with celerity while contemporaneously deploying latest technology in the manufacture of the product.

Boss Mustapha, secretary to the government of the federation (SGF), says $2.3 trillion is needed to bridge the infrastructure deficit in Nigeria over the next 22 years.

Nigeria has total cement production capacity of 47.8 million tonnes and annual demand for around 20.7 million tonnes, but cement prices are some 240% above the global average, a serious dampener on Africa’s largest economy.

A tonne sells for up to $135 in Nigeria, industry data shows.

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