Nigeria’s second largest cement maker, BUA Cement says it is ramping up investments to meet with increasing demand, and take advantage of the new free trade pact (AFCFTA) which commenced in January 2021.
The cement maker is looking to boost capacity to 20 million metric tonnes per annum with the completion of new cement plants in Sokoto, Edo and Adamawa, giving it the legroom to serve the demand of over 1.2 billion people, and tap into the $3 trillion market opportunities which AFCFTA promises to bring.
“Nigeria’s cement consumption is expected to increase to about 200kilograms per head in coming years which is one of the reasons why BUA Cement is ramping up its investments in new plants to be able to meet this potential demand as well as take advantage of regional export opportunities through the AFCFTA agreement which came into effect in 2021,” the firm said in a statement.
In a recent interview, Chairman of BUA Cement, Abdul Rabiu said that despite the strides made in the Nigerian cement industry in the past few years, there was still room for immense growth.
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According to Rabiu, Nigeria with a population of about 200million people was still greatly underserved by the cement industry with current consumption levels at about 130 kilogrammes per head compared to smaller African countries with consumption levels at about 170 to 180kilograms per head.
Meanwhile, BUA Cement recorded a 19 percent jump in revenues to N209 billion in the 2020 financial year. That’s despite the pandemic which halted economic activities and disrupted business operations.
The company also announced a 16 percent increase in gross profits to N95.4billion in 2020 from N82.4billion in 2019.
According to BUA, the impressive performance of the firm’s full-year performance further consolidates its position as one of Nigeria’s most profitable companies – a position it is expected to strengthen further with the commissioning of its new 3 million metric tonnes Sokoto Cement Plant in 2021 and the addition of 3 new lines of 9 million metric tonnes total capacity in Adamawa, Edo and Sokoto states by 2023 for which it recently signed an agreement with Sinoma CBMI.
The company increased net revenues, with sales volumes up 13 percent by about 600,000tons to 5,100,232 tons in 2020. Operating profits increased to N82.5billion whilst Profit after Tax (PAT) rose to N70.5billion from N60.6billion in the corresponding year.
According to various analysts, the strong performance by BUA Cement in its 2020 full-year unaudited results was a testament to its focus on efficiency, a strong management team, excellent cost management measures and newer, technologically advanced plants.
Speaking recently, the managing director, BUA Cement Plc., Yusuf Binji, said that BUA Cement’s exceptional performance in the 2020 financial year, is a reflection of the continued value and strength of the BUA Cement brand and product offerings as well as a nod to the excellent implementation of the company’s business continuity plan which ensured that BUA Cement was able to withstand the impact of the pandemic throughout 2020. In an earlier statement, Binji said that “despite the prevailing economic conditions in 2020, BUA Cement remains quite optimistic about the future because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy.”
BUA Cement had in 2020 entered strategic alliances for the supply of Liquefied Natural Gas (LNG) at its Kalambaina Plant, Sokoto State, and for the management of its mining operations. Given these deliberate and strategic choices amongst other cost management efforts, it is expected that BUA Cement will continue to combine development and innovation into its offerings and activities to drive efficiency, reduce operating costs and maximize profits.
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