BUA Foods eyes 50% capacity expansion, adds more jobs to economy

BUA Foods Plc, one of Nigeria’s biggest food companies, plans to double down on its ongoing capacity expansion this year, a move aimed at capturing the country’s fast-moving consumer goods market, estimated at N23 trillion, while adding hundreds of direct and indirect jobs to the economy.

“We are committed to coming to market with a capacity increase of over 50% across our business divisions. These expansions will significantly strengthen our ability to meet market demand while accelerating product innovation for our consumers,” Ayodele Abioye, managing director of BUA Foods, said on an investors’ call Thursday.

The expansion initiatives, according to Abioye, are focused and intended to upscale market penetration and increase production capacity, efforts that will aid growth and profitability in the short to medium term.

“We expect to deliver double-digit growth in production volume across the business segment, supported by sustained demand and hoping for a gradual improvement in consumer spending across the categories we continue to experience.”

BUA Foods sees the sustained disinflationary trend, stability of the naira, expansion of the FMCG market and the new tax laws as enablers of growth, even as it continues to monitor such risks as energy cost volatility, still weakening consumer spending power while limiting its FX exposure.

The MD told investors that the company is committed towards completing its backward integration project in sugar cane development, a critical initiative that will enhance supply security and improve cost efficiency amid supply chain disruptions occasioned by the Iranian war.

Speaking on efforts of the company to mitigate exposure from the Middle East war, Abioye stated that BUA Foods has not seen “any material impact on earnings but continues to cautiously monitor the situation with engagement with our supply partners.”

“With ongoing geographical disruptions to the global supply chain, we continue to manage risk around energy and logistic costs, FX exposures and consumer affordability. Our targeted investment in efficiency, sourcing, optimisation and brand protection, we believe, will position us well to mitigate these challenges.”

The firm continues to ride on a stable naira and easing inflation to record its best year yet in 2025, doubling its net profit to N518.38 billion, according to its audited financial statement.

Revenue also rose by 16 percent to N1.77 trillion, helped by higher volumes across sugar, flour, pasta, and rice — staples that have remained resilient despite pressure on household incomes.

The improved earnings of the Lagos-headquartered firm, controlled by Africa’s third richest man, Abdul Samad Rabiu, spurred a planned N28 dividend payout to shareholders, amounting to N504 billion—a 115 percent rise.

“With easing inflation and a gradual interest rate normalisation and sustained profitability, we anticipate improvement in consumer demand, cost flexibility and margin, and with our industry projected to continue to expand,” Abioye said.

“We see significant headroom to grow volumes and deepen penetration, leveraging our skills, brands and route to markets.”

Wasiu Alli

Wasiu Alli is a business, economics cum data journalist with strong expertise covering macro trends, capital markets, government policies, corporate earnings and comparative economics analysis. Alli turns raw data into trends that not only tells compelling stories but nudges investors to make valued and informed decisions. He’s an alumnus of Lagos State University and trained at Lagos Business School. He formerly heads the Companies and Markets desk at BusinessDay where he writes and supervises the production of well researched articles on earnings updates, corporate sectoral comparisons, market intelligence as well as interviews with C-suite executives.