Cement capacity nears 46MTPA as BUA readies $600m Obu Plant

The cumulative capacity of Nigeria’s cement industry is set to hit 45.5 million metric tons per annum (MTPA) as BUA Group gears up for August launch of its $600 million Obu Cement Plant, which will have capacity to produce 3 million MTPA.

Nigeria’s cement industry’s current total capacity is estimated at 42 MTPA.

Dangote Cement, leader in the industry, has 29MTPA, while Lafarge Africa’s subsidiaries such as WAPCO, the United Cement Company of Nigeria (UNICEM), Ashaka Cement and Atlas have a combined capacity of 12.5MTPA.

Sokoto Cement currently has 500,000MTPA capacity.

In addition to an already available 500,000 capacity, BUA will have a total of 3.5MTPA by August, when the new plant comes fully into force with an additional 3MTPA.

These will put the cumulative capacity of the country’s cement sector to 45.5 MTPA by August.

Abdulsamad Rabiu, chairman, BUA Group, said the company’s three-year journey in constructing the Obu Cement Plant in Okpella would give a much needed boost to Nigeria’s cement industry as well as enhance the development of related sectors such as housing and construction.

“The Obu Cement plant, which is about five kilometres away from Edo Cement Company, is 100 percent owned by the BUA Group,” Rabiu said.

“The Edo Cement Plant, which has a capacity of 500,000tons/annum, is also being rehabilitated and would be receiving clinker from the Obu Cement plant before being fully rehabilitated. The two plants would be rolling out about 3.5mtons/ annum of cement. Aside from the initial costs of over $500 million in Obu Cement, we have also invested over $100 million in gas turbines to power a 50-megawatt plant for 24-hour electricity generation as well as the construction of a 30km gas supply pipeline,” he said.

BusinessDay gathered that as far back as April 2014, BUA Group signed a gas sales and purchase agreement with the Nigerian Gas Company to guarantee supply of about 0.9Mm3/ day to the Obu plant.

It was also gathered that liquid fuels would also be used as a backup to ensure production around the clock.

To enable stable power supply, a 30-kilometre gas pipeline has been built, with compensation paid to all three host communities.

Findings further show that the equipment at Obu Cement plant was supplied by the reputable European cement equipment suppliers, FL Smidth of Denmark, just as the civil construction was handled by the mega construction firm, Julius Berger.

This combination from two world leading companies in cement equipment and construction services has given birth to one of the finest cement plants in the world.

According to Rabiu, the plant’s location in Edo State makes it a strategic point for markets in the North and South-South of the country, stressing that an estimated 250 to 300 trailers of cement would be delivered to markets across the regions daily, once the Obu plant kicks off full commercial activity.

He said the Obu Cement Plant manufactures cement straight from limestone, receiving 9,000 tonnes of limestone and clay each day, for its large scale operations, which will provide over 1,500 direct jobs.

“We have constructed a housing estate for most of our workers and are still building, to ensure they have access to decent accommodation,” Rabiu added. Expansion activities in the fast-growing industry have continued with Sokoto Cement planning pumping N48 billion to triple capacity while also mulling a coal-fired plant.

“The expansion is part of the ongoing modernization and cost optimisation programme. We are developing a coal mill from where we intend to source our power,” Sada Suleiman, head of corporate affairs, told BusinessDay in a chat.

While Dangote is expanding across African countries such as Ethiopia and Zambia, Lafarge pulled off a merger with Holcim to become the largest building materials company in the world.

ODINAKA ANUDU