Nigeria needs more cement manufacturers to crash price – BUA

...pays N88bn dividend to shareholders

Abdul Rabiu, chairman, BUA Cement plc, one of Nigeria’s leading cement manufacturers, says Africa’s biggest economy needs more manufacturers in the industry to make cement more affordable and increase annual production and consumption.

Rabiu, who spoke on Thursday at the 6th annual general meeting of the group, said having only about three players in the industry was not healthy for the economy. He argued that having more players would promote healthy competition, while also increasing production which he said was currently low at 30 million annual metric tonnes.

Rabiu also described Nigeria as a huge market with over 200 million consumers. “More players must be encouraged to come and participate in this industry because it is an important and very critical sector of the economy and if you leave it in the hands of very few people, at the end of the day, the country would be held to ransom.”

“Unless more players come in, not where two or three players can determine the cost of cement, we will continue to have this issue. More players will promote a healthy completion, consumption will go up and prices will come down to an acceptable level,” he added.

The chairman applauded Dahiru Mangal for coming into the market, with plans to set up a three-million metric tonnes of cement in Kogi State, but stressed that more players were still needed.

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He observed that the high cost of diesel coupled with the Russia-Ukraine crisis has pushed the production cost of cement, but said BUA managed to mitigate the impact and post profits because it sources materials locally.

The chairman also informed that, despite the prevailing uncertainties in the Nigerian and global economy, BUA cement continues to record strong operating performances. In 2021, he said BUA cement recorded a 22.9 percent rise in revenue to N257.3 billion from N209.4 billion in 2020.

Rabiu also said profit after tax rose to N90 billion from N72 billion in 2020 and informed that shareholders would be paid dividends totaling N88 billion.

“I think it will be better next year because we have only commissioned the fourth line this year. From the first half we have seen huge improvements over what we did last year, so by next year, the company will be paying a dividend of maybe N120 or N130 billion,” he said.

The chairman further said that BUA Cement would be expanding export to Niger and Burkina Faso with the new rail lines coming on board in Sokoto and Edo State in 2023. The rail line is projected to increase the capacity of the company to 17 million annual metric tonnes from 11 million, Rabiu noted, while also disclosing that the targeted expansion would add about $180 million additional revenue annually.

Yusuf Binji, managing director, BUA Cement plc said the company’s performance in 2021 was upheld by consistent market demand and supported by an excellent business model.

On the panned cement plant in Adamawa state to produce 2 million metric tonnes, Binji said the contract has been signed with payments made, and the company is currently surveying raw materials available for now.

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