Abdul Samad Rabiu, the Chairman of BUA Cement Plc, Nigeria’s second-largest cement company, has unveiled an ambitious expansion strategy. He announced that the company is set to commission its Obu Line 3 factory and Sokoto Line 5 factory in the first quarter of 2024, adding a combined production capacity of 6 million metric tons per annum. This move is part of BUA Cement’s plan to significantly boost its production capabilities, ultimately reaching a total installed production capacity of 17 million metric tons per annum.
Chairman Rabiu made this significant disclosure during the BUA Cement FY2022 Annual General Meeting (AGM). The expansion plans were unveiled alongside the presentation of BUA Cement’s full-year financial results, which demonstrated impressive growth. The company reported a 40.3 percent increase in revenue, soaring from N257.3 billion in 2021 to ₦361.9 billion in 2022. Furthermore, BUA Cement’s Profit After Tax (PAT) saw a robust 12.1 percent rise, surging to ₦101.0 billion for the year under review, compared to N90.1 billion in the preceding year.
Chairman Rabiu emphasized BUA Cement’s unwavering commitment to providing high-quality cement for dependable housing and infrastructure development in Nigeria, despite the challenging macroeconomic environment.
In addition to the expansion plans, Rabiu highlighted that the introduction of these new production lines in early 2024 positions BUA Cement to address the surging demand for cement in Nigeria and to expand its export volumes to neighboring African countries.
Rabiu stated, “BUA Cement will continue its unwavering focus on innovative product delivery, efficient logistics, and tailored sales solutions for our diverse customer base across Nigeria and Africa. In addition, we are dedicated to improving the well-being of our host communities through sustainable development initiatives.”
Addressing the issue of high cement prices in the country, Rabiu pointed out that BUA Cement Plc’s planned introduction of the Obu Line 3 and Sokoto Line 5 in Q1 2024 aims to alleviate the demand surge in Nigeria and contribute to making cement more accessible and affordable. This aligns with the Federal Government’s goal of boosting infrastructure development in the nation.
Rabiu confidently stated, “Our Company remains resolute in its strategies, chiefly centered on market consolidation. We have a presence in every market throughout the nation. The completion of Lines 3 and 5 in Obu and Sokoto respectively will empower us to offer better prices and more significant quantities of cement to the domestic market, thus strengthening our market share across Nigeria and Africa. I am confident in BUA Cement’s ability to play a role in reducing cement prices in Nigeria.”
Yusuf Binji, the Managing Director of BUA Cement Plc, further emphasized the company’s commitment to efficient energy utilization in the cement production process. He also revealed potential plans to introduce a new product in the upcoming year, aligning with customer needs and preferences.
“BUA Cement is attuned to customer demands and market trends. While we continue to work on making our production process more energy-efficient, we are also exploring the possibility of introducing a new product next year,” Binji stated.
Currently, BUA Cement stands as Nigeria’s second-largest cement company with a production capacity of 11 million metric tons per year. The company is determined to reach an annual production capacity of 17 million metric tons with the completion of two new plants in Edo and Sokoto by early 2024.
However, it’s worth noting that BUA Cement experienced a foreign exchange loss of N2.137 billion, marking a 103% year-on-year increase, alongside higher interest expenses. These factors resulted in only a marginal 2.75% increase in pre-tax profit to N76.425 billion, as indicated by the NGX industrial index.
