BUA : Driving innovation and economic diversification of the nation

 

 

 

UGO AMADI

The recent inauguration of  a new 3 million metric tonnes per annum BUA Cement Sokoto Line 4 Factory has indeed placed the BUA group as a company that is committed to driving sustainable economic diversification and development of the country.

 

This is despite the challenges and unpredictable operational environment witnessed by  many  sectors of the Nigeria economy , BUA group has continued to initiate transformational innovation  and complimenting the Federal Government policies on economic diversification ,job creation and industrialization.

 

As Nigeria’s largest privately owned conglomerate and respected organization, BUA group has also added to its portfolio the listing of BUA Foods on the Nigerian Exchange on Jan 5, 2022 ,which has since received significant acceptance going by the volume of demand for the shares which has boosted the market capitalization of the Nigerian Exchange Limited by over N1trillion.

 

The company has also, maintained an unbroken record of year-on-year growth and has eight ultra-modern manufacturing facilities across the country with a refining capacity of 1.5 million metric tonnes of sugar yearly from two ultra-modern sugar refineries in Lagos and Port Harcourt.

 

Invariably, ss part of its expansion strategy in 2022, it plans to double its flour milling capacity from about 500,000 metric tonnes per annum to over a million metric tonnes per annum. Similarly, that of pasta will grow from 5 lines to 11 lines.

 

Ultimately, BUA group have continued live up to its corporate vision of providing high quality products to the widest possible customer base at reasonable prices”. This is a big dream for a company that started 34 years ago. So far they are aiming towards surpassing  their goal by being continuously innovative, creative,  and being one of the best conglomerate in the country and Africa at large.

 

Today ,BUA group stands out as leading foods, infrastructure, mining and manufacturing conglomerate with diversified investments spanning key business sectors of the African economy. With  interest in Foods, Flour & Pasta, Sugar, Edible Oils, Rice on Infrastructure Cement, Real Estate, Mines and Steel, Ports Operations

 

It will interest you to note that the little company established in 1988 as BUA International Limited by an eminent industrialist, vision driven corporate leader and astute businessman,  Alhaji Abdul Samad Rabiu, just like the mustard seed has grown to be a giant iroko that provides shade for the Nigerian economy .

 

In 2001 BUA Acquisition of Nigeria Oil Mills Ltd (NOM). NOM was the largest vegetable oil processing company in West Africa as at the time of acquisition while in 2005 it Incorporated  BUA Flour Mill, Lagos and Ports and Terminals. BUA Flour Mill Lagos was incorporated as a fully-owned subsidiary of BUA Group. Milling commenced in August of the same year

 

Also, in 2007 it established  BUA Flour Mills Kano, it  started at Bompai Industrial Estate with a capacity of 500 metric tonnes per day – 100% wholly owned by BUA Group while in 2008 it acquired  Laifiagi Sugar Company. it also acquired Golden Oil Limited which was renamed BUA Oil Mills with a factory in Ikeja, Lagos. BUA Sugar Refinery was commissioned with a 720,000 metric tonnes/annum refinery in Lagos. This makes BUA Sugar the second largest sugar refiner in West Africa as at 2008.

 

 

BUA Cement was incorporated and commenced operations in the same year through its floating cement terminal, ‘BUA Cement 1’, designed specifically for bulk and bag cement unloading Contract to build the BUA Pasta Plant was signed and work commenced within the same year.

 

In 2009 Sokoto and Edo Cement  was acquired. And it received International Quality Award Re

Majority stake holding in Cement Company of Northern Nigeria (Sokoto Cement) and Edo Cement Company are acquired by BUA Group.

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BUA Group/FLSmidth signed a contract for a 3million mtpa new production line to be sited at Obu, Edo State. BUA Pasta was commissioned and integrated with BUA Flour Mills. The factory produced semolina and included a water treatment plant with the capacity to supply the entire factory with purified water

 

In 2015 the $1 billion BUA Obu Cement plant  was opened with a capacity of 3 million mtpa and construction of the BUA Kalambaina Cement plant in Sokoto. Also, Construction of BUA Kalambaina Cement, Sokoto with 1.5million mtpa capacity commenced.

 

 

It also, established  the BUA Rice Outgrowers Scheme for farmers in Kano and Jigawa States, targeting over 100,000 farmers in 2017 while 2018 Kalambaina Cement 1.5 Million mtpa sited within Sokoto Cement Plant was  completed and commissioned

 

The Eastern Sugar Refinery in Port Harcourt, Rivers State was also,  completed in  2019

while, BUA Kalambaina Cement & Cement Company of Northern Nigeria (CCNN) merged in US$1.1billion transaction.

 

Speaking at the inauguration of BUA cement , President Muhammadu Buhari described  BUA as the largest private sector employer of labour in the North-Western part of Nigeria, and  pledged that his administration would continue to support serious investors to set up businesses that will take advantage of huge reserves of resources in different parts of the country.

The President recounted that in 1985 as the then Head of State, he was at the same location to commission the 2nd line of the facility.   ”Today, almost thirty-seven years later, to commission the fourth line is a very special day for me personally.

”As you all know, one of the key economic pillars of our administration has been to create an enabling environment for businesses to thrive. This is necessary for job creation and indeed, for our economy and national security.

”In the past few weeks, I visited Ogun and Kaduna States where I observed many private sector investments in action. And today, I am here in Sokoto to commission this multi-billion Naira project.  ”It is therefore very clear for all to see that our policies are working. Progress is gradually being made in all parts of the country,” he said.

The President thanked the Founder of BUA Cement, Abdul Samad Rabiu and the entire team for the great work they are doing in supporting the government’s economic diversification and job creation agenda.

He noted the company, which has completed four new cement plants of similar capacity in the last five years in different parts of the country and is set to complete two more plants soon, had shown through these investments that they believe in Nigeria and its potential.

Commending BUA and other entrepreneurs for making Nigeria self-sufficient in cement and a net exporter of the strategic product, the President said:

”I am pleased that through these investments, BUA Cement has created employment opportunities for our citizens. Today, BUA is the largest employer of labour in the North-West region.

However, Abdul Samad Rabiu, Chairman, BUA Cement, who commended the President for creating the enabling environment for businesses to thrive, acknowledged the support of the Central Bank of Nigeria (CBN) and its Governor in setting up the gigantic project.

He announced that, ”so far, we have invested over a billion dollars in the past four years and we urge the CBN to continue to support industries like ours that use locally sourced raw materials to add value.”

He pledged that BUA would continue to invest more in the cement industry until Nigeria is self-sufficient and the commodity is made available, accessible, and affordable for all Nigerians.

”In the past 6 years, we have completed 4 plants – two in Obu, Edo State and two in Sokoto (of which this Sokoto line 4 is the fourth) with BUA’s total production capacity now standing at 11.5million tonnes with the completion of this plant.

”Next year, we intend to complete the construction of two new plants of 3 million metric tonnes each for which construction is ongoing – one in Edo and the other, here in Sokoto.”

BUA Group possesses a strong capability in cement manufacturing with 3 major subsidiaries and plants in Northern and Southern Nigeria. The Group’s plants have the capacity to provide various grades of cement as required in the local Nigeria markets and meet the highest standard of cement manufacturing.

 

In 2020, BUA Group consolidated all its cement operations and listed BUA Cement Plc on the Nigerian Stock Exchange with a total combined installed capacity of 8million mtpa and a market capitalization of N1.18trillon (US$3.3bn), making it the second largest cement producer in the Nigerian market and the largest cement producer in the North Western region of the country.

 

This consolidation included the BUA owned Cement Company of Northern Nigeria, and the Obu Cement Company.

 

BUA Cement is committed to expanding its footprint into markets within and outside Nigeria. The commencement of AfCFTA provides boundless opportunities because of the potential involvement of 1.2 billion Africans, spanning 54 nations, with a combined GDP of about US$2.5 trillion; thereby actually increasing intra-African trade by up to 52.3%.

 

On Ports Operations, BUA Group, through its subsidiary, BUA Ports & Terminals, is a concessionaire of Terminal ‘B’ of the Nigerian Ports Authority (Rivers Port), in Rivers State, Nigeria. This concession was done to improve port logistics efficiency and was obtained through a highly competitive bidding process under the Public Enterprise (Privatization & Commercialization) Act No. 28 of 1999.

 

The Port operates with well trained personnel, competitive tariffs and almost unrivalled customer service. Currently operating at MARSEC level 2, the security of lives and goods are vital in our operations.

 

Also, Steel is critical to the development of any nation. With an annual local steel consumption of about 4 million tons mostly imported, Nigeria does not operate a single integrated steel mill. Through our subsidiary, BUA Iron & Steel Ltd, plans are in place to establish a 1million tonnes/annum state-of-art steel plant utilizing locally sourced iron ore, natural gas and limestone. BUA Group has therefore secured an exploration license for Iron Ore in Kogi State, Central Nigeria.

 

BUA Steel won a government bid to acquire Delta Steel Company Ltd through the government’s privatisation exercise. Following the Government’s reversal of the process, the Group went on to begin the process of establishing a fully integrated steel plant in Kogi State, Nigeria. Upon completion, BUA Steel Complex will be the only steel mill in WestAfrica that produces from iron ore to Steel.

 

As a forward looking organization committed to creative investment in Nigeria economy, The Acting Managing Director, BUA Foods, Engr. Ayodele Abioye, said  plans are underway  for BUA foods to begin operations at 200,000 metric tonnes rice milling plant as part of its diversification operations in 2022.

According to him , “our fast paced and strategic investments in the food industry positions us to capture growth opportunities within the sector, create headroom ahead of demand, generate sustainable employment while promoting national food security.

Additionally, as a business we will continue to create sustainable value for our consumers and stakeholders”.

Abioye said that BUA Foods was a key player in Nigeria’s rice revolution and its rice business was in addition to its 500,000 tons of flour milling and 250,000 tons of pasta.

According to him, the 250,000 tons per annum edible oils milling plant will recommence operations in 2024.

“BUA Foods is future-focused and a resilient business built on strong brands and high-quality products.“It is uniquely positioned to capture increasing sector growth opportunities with innovative expansion capabilities and present an attractive financial profile which ensures a return on investment.

“As a business, we will continue to leverage and structure our strategic partnerships on our journey. Also, we rely on good governance and experiences of our people to deliver sustainable results.

“For over two decades, we have been on the journey of fulfilling human food demands, promoting food security, and nourishing lives,” he said.

Abioye said that the sugar market specifically, was undeserved.

He said it had given room for informal activities to thrive, contributing about 300,000 metric tonnes into the market through informal or unregistered means.

Kabiru Rabiu, Group Executive Director stated that the company is determined to explore the huge opportunities available in the agribusiness to promote food security and growth for Nigerians and Africans.

According to Rabiu, “Today for us is very historic and we are excited to begin the year with the listing. The population of Nigeria is over 200million and our food production capacity is still not enough to meet current demands. However, with the listing of our food business on the NGX, there is high hope for Nigeria in terms of building capacity for food sufficiency.”

“As a country we have agricultural resources coupled with human capital to harness needed raw materials to produce what we need for our consumption, and develop our nation. We are positioning our brand to take advantage of export opportunities through our strategically located plants from which foreign exchange can be generated both for the company and economy”, Rabiu added.

Rabiu said: “Our listing on the exchange undoubtedly creates a new consumer goods asset class for investors and provides an opportunity for a wider group of Nigerians to be part of the food sector growth story.

“Our strong drive is key strategy to continuously and competitively meet demands. “We understand that the demand for healthy and quality foods products will continue to increase as we grow our economy.”

On his part, the Chief Executive Officer, NGX, Mr. Temi Popoola, stated, “This listing marks a new beginning for BUA Foods Plc who plays a critical role in the FMCG industry as the company can leverage services the Exchange offers to achieve its strategic objectives. BUA Foods has experienced an upward trend in share price, market capitalization, and trading activity since its listing on the Exchange.

On the future outlook the company said it will continue to invest in modern technology for efficient food production, innovatively expanding with strategic partners across the value chain. The company is also well positioned to leverage significant export potentials across West Africa and the larger African continent.

The company also said it looked forward to President Buhari commissioning their next plants next year which will bring total production capacity to 17.5million metric tonnes.

Interestingly, Alhaji Abdul Samad Rabiu has won many awards which include Industrialist of the Year Award, he was named West African & African Industrialist of the Year by CNBC/All Africa Business Leaders Award. He is also named amongst Forbes 13 Black Billionaires in the world.

 

Nevertheless, Rabiu  maintained that although the economic environment is expected to remain challenging in 2022 ‘’we will continue to focus on our strategic priorities in order to deliver our overall business goals.

‘We will maintain our focus on growing our businesses relying on our tailored products, we will proactively identify niche areas and ensure we meet the needs of Nigerians in food and building sector.

‘We remain optimistic about identifying growth opportunities in the economy and remain focused on building a business that will endure for many years and beyond