….Nigeria’s Rice Production Hits 9 Million MT in 2021 – Emefiele
BUA Foods Plc has set for itself this 2022 as target year to commence operations of its Rice business. The company said its rice milling plant has the capacity to produce 200,000 metric tons yearly. This commencement of operations of its rice business is in addition to a total of 1.4million tons of flour milling and 500,000 tons of pasta also expected this year.
“We are partners and key players in Nigeria’s rice revolution,” the acting Managing Director, BUA Foods Plc, Ayodele Abioye said on Tuesday at the company’s Facts Behind the Listing presentation on the Exchange.
BUA Foods Plc which operate five business divisions and has two wholly-owned subsidiaries recently listed by introduction on the Main Board of the Nigerian Exchange Limited (NGX) a total of 18 billion ordinary shares at N40 per share under the Consumer Goods sector of NGX trades with a symbol BUAFOODS.
The listing of BUA Foods’ shares had added N720billion to the market capitalisation of NGX, further boosting liquidity in the Nigerian capital market and providing opportunities for wealth creation.
Since its listing on the Nigerian Exchange, BUA Foods Plc has risen most on the Bourse by 54.5percent, as its share price stood at N61.80 at the close of trading on Monday, January 17.
The “Facts Behind the Listing” event was an interactive session with capital market stakeholders as it created a forum for discourse and dissemination of information. Given that the market is driven by timely, relevant, and accurate information, interactions such as the Facts Behind the Listing remains critical in the decision-making for all investors.
This disclosure comes on the heels of the company showcasing its robust history even as it reposition for further growth in an attractive sector.
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“Nigeria’s favourable demographic parameters propel ongoing and future growth of its consumer markets. The question is: how does the company tap into this opportunity? It will leverage sustainable, efficient and scalable platforms supported by a well-defined strategy to ensure leading market positions”, Abioye said.
He noted that BUA Foods Plc is committed to environmental sustainability and providing support and investment in the host communities. “Completion and operation of additional capacity is expected to drive growth in revenue from 2022 and beyond,” he added.
Abdulrasheed Olayiwola, chief financial officer, BUA Foods Plc who spoke on the company’s historical performance noted that the consolidated financial statements are reflective of upside potentials.
In eleven-month to November 2021, BUA Foods Plc revenue grew by 58 percent from N193billion in 2020 to N304billion in November 2021. “Our revenue growth is simply due to our product market acceptability,” Olayiwola said.
Also in the review eleven months to November 2021, BUA Foods Plc gross profit grew from N64.9billion in 2020 to N96.2billion in 2021; while Pre-tax profit (PBT) rose from N49.6billion in 2020 to N78.8billion in November 2021.
As expected, since its listing, BUA Foods has increased the visibility of the food manufacturing, processing and distribution company to investors on the African continent and across the globe.
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In his remark, Olumide Bolumole, Divisional Head, Listing Business, NGX, who represented Temi Poopola, CEO, NGX during the Facts Behind the Listing noted, “We recognize the efforts made by the Board and Management of BUA Foods towards this listing and the roles played by all the professional parties to this transaction – Stanbic IBTC Capital Limited – the Lead Financial Adviser, Rand Merchant Bank Nigeria Limited and UCML Capital Limited- the Joint Financial Advisers, APT Securities Limited and CardinalStone Securities Limited – the Stockbrokers to the transaction as well as other transaction parties for their hard work and dedicated efforts towards the actualization of a successful listing.”
He said, “Listing on the NGX Main Board requires a commitment to high standards of disclosure and corporate governance, and companies listed on the exchange benefit from being able to leverage on the deep pool of local and international investors to access capital.
Following the admission of BUA Foods’ shares on the Main Board of the Exchange on Wednesday, January 5th, 2022, the company has experienced an upward trend in share price, market capitalization along with trading activity. This communicates the markets appetite and investors alignment with the company’s strategic goal and a willingness to participate in the growth story.
Additionally, as at Friday 14th January, BUA Foods became the largest company by market capitalization in the consumer goods sector, increasing the total equity market capitalization by over 4percent.
This listing marks a new beginning for BUA Foods Plc who plays a critical role in the FMCG industry as the company can also leverage other Capital Market Products and services the Exchange offers to achieve their strategic objectives.”
“As part of BUA Group’s strategic thrust to optimize its processes and to maintain market leadership in consumer goods sector, The Group deemed the consolidation of its food-related operations into a single entity “BUA Foods Plc” necessary to take full advantage of the growth opportunities in the economy.
Furthermore, BUA Foods have also invested heavily in the backward integration program of the Federal Government under the supervision of the National Sugar Development Council (NSDC) to ensure its operations are optimized and to also benefit from the positive growth in the Agriculture Sector,” the NGX CEO stated further.
“We encourage BUA Foods Plc to continue to strive for excellence by adhering to the highest standards of disclosure and corporate governance. The NGX is dedicated to being a trusted partner to BUA Foods on its journey even as we implore all our issuers to take advantage of our platform to interact with the market,” NGX CEO added.
In the same vein, the Governor of the Central Bank of Nigeria, Godwin Emefiele, also disclosed that rice production in the country rose to nine million metric tonnes in 2021 from about 5.4m MT in 2015.
Emefiele, who disclosed this at the unveiling of 13 rice pyramids in Abuja by President Muhammadu Buhari attributed the increase in production to interventions in the agricultural sector by the Federal Government.
According to him, one of such interventions is the CBN Anchors Borrower’s Programme which has built a sustainable framework for financing smallholder farmers in Nigeria.
He added that the programme had also helped to reduce Nigeria’s import bill from countries like Thailand.
Emefiele said, “The Anchor Borrowers’ Programme has catalysed the rural economy and has built a sustainable framework for financing smallholder farmers in Nigeria.
“For example, Thailand alone exported 1.3 million metric tons of rice to Nigeria in 2014. The ABP was launched in 2015 to curtail these imports, and since then, we have seen incremental reductions in rice imports from Thailand.
“By 2016, rice imports from Thailand had fallen to only 58,000 metric tons. As of the end of 2021, they only exported 2,160 metric tons to Nigeria, thereby saving us foreign exchange and helping preserve jobs in Nigeria.
At the event, President Muhammadu Buhari assured Nigerians to expect better prices for rice in no distant time.
‘I am aware that the bags of paddy will be moving straight from here to rice milling plants across Nigeria, which will lead to the release of processed rice to the markets by the rice millers. The measure will aid our efforts at reducing the price of rice in Nigeria,” he said.