BUA Group, a leading cement manufacturer in Nigeria, says it is perfecting plans to build a new plant that will be bringing additional five million tonnes of cement to the nation’s supply capacity.
The new supply, according to the company, will be enough to be exported to neighbouring African countries and also bring down the price of the commodity which has increased by over 80 percent in the last 24 months.
Abdul Samad Rabiu, chairman and founder of the group, told newsmen at International Finance Corporation (IFC) and partners signing of an agreement for the new cement plant that it would be sited in the northern part of Nigeria.
According to him, the plant, estimated to cost $500 million, would create jobs and contribute to economic and infrastructural development within Nigeria and other countries.
A breakdown of the IFC’s $500 million financing facility shows a $160.5 million loan from IFC’s own account, a $94.5 million loan through the Managed Co-Lending Portfolio Programme (MCPP) and $245 million in parallel loans from syndication partners.
These partners are the African Development Bank (AfDB) which brought $100 million, Africa Finance Corporation (AFC) – $100 million and German Investment Corporation, Deutsche Investitions-und Entwicklungsgesellschaft (DEG)–$45 million.
The IFC finance is the largest-ever investment in northern Nigeria, providing a financing package alongside African and European partners to help the company part-finance and develop two new energy-efficient cement production lines that will create up to 12,000 direct and indirect jobs.
The chairman said that the facility would allow the company, which is Nigeria’s second-largest cement producer, to develop new production lines in Sokoto, adding that the plants will run partly on alternative fuels derived from waste and solar power.
Each of the production lines is expected to produce about three million tons of cement yearly when completed, serving markets in Nigeria, Niger and Burkina Faso.
“The project is also expected to create about 1,000 direct jobs and 10,800 indirect jobs. Direct jobs include those in manufacturing, engineering and advanced automation systems. Indirect jobs are those in the cleaning, maintenance, mining and transportation sectors,” he said.
“BUA is delighted to partner with IFC and other institutions in securing a $500 million facility to develop energy-efficient cement production capacity and strengthen our equipment and logistics capabilities in northern Nigeria. We have gone through the rigorous process with IFC, AfDB, AFC and DEG, which validates our responsible business practices,” he added.
Rabiu said that, by focusing on greener fuels and enhancing its equipment and logistics platform, BUA Cement was building a foundation for sustainable infrastructure growth and a more inclusive society, adding that “northern Nigeria was not impoverished; there are opportunities there to add value. The resources and manpower are there. It is a validation that our business practices are responsible.”
“Nigeria and Africa are blessed with a lot of opportunities; we need to come together to harness the resources and add value to what we have and empower our people. We have over 30 per cent of raw materials in Africa, we need to harness them and add value,” he said.