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BUA Cement Plc, the second largest cement manufacturer in Nigeria by total installed capacity, saw sales grow by 9.66 percent to N106.35 billion in March 2023 from N96.98 billion as at March 2022.
BUA Cement spent N42.50 billion in fuel and raw materials as revenue increased even amid the macroeconomic headwinds.
The producer of the building material spent N27.58 billion on fuel and raw material in the corresponding period of the first quarter of 2021.
Despite elevated energy and maintenance expenses driving the cost of sales up 14.79 percent year on year (Y/Y) to N55.97 billion, BUA Cement’s cost margin at 52.27 percent is one of the lowest in the manufacturing industry, and this is due to effective cost controls and sharp sales growth.
The good thing is that the 14.27 percent uptick in input costs is lower than the March inflation rate of 22.04 percent.
Analysts attribute elevated cost of production to the uptrend in natural gas prices globally due to the geopolitical risks stemming from Eastern Europe.
BUA Cement plans to diversify energy sources by integrating solar energy on a limited scale up to 10MW in 2023.
It transitioned from Heavy Fuel Oil (HFO) to Liquefied natural Gas (LNG) in Sokoto and it has Commence work on the 70MW gas power plant in the state.
It is noteworthy that cement makers are reeling from foreign exchange scarcity, insecurity, weak housing policy and infrastructure drive.
Dangote, BUA, and Elephant (parent company of Lafarge), spent a staggering N350 billion on fuel in 2022, according to data gathered by MoneyCentral.