Bua Group invests $500m in green-field plant to crash cement price

Bua Group International, a Nigerian conglomerate involved in the manufacturing of various household goods, has invested over $500 million in a green-field cement plant in Okpella, Edo State, to add additional 3 million tons per annum to the Nigerian cement market in February 2015. The plant, now called Obu Cement Plant, when completed, will take Bua’s capacity to 5.3 million metric tons per annum, and hopefully crash cement price.

Bua Group recently bought shares in Edo Cement Company Limited, maker of Rhino Cement, which presently produces 300,000 tons of cement per annum. With the coming of Obu Cement Plant, with installed capacity to produce 3 million tons per year, and its third plant in Sokoto State, currently producing 500,000m tons cement per year, and with additional 1.5 million tons from the new plant currently under construction in Sokoto, Bua Group alone, by 2015, will be adding 5.3m tons of cement per annum to the Nigerian cement market.

Yusuf Binji, executive director, project and technical, Bua Group, Okpella, Edo State, disclosed this during a facility tour of the new green-field cement plant called Obu Cement Plant, Okpella.

According to Binji, the plant is scheduled for completion and commissioning within the first quarter of 2015, and is expected to employ over 1000 direct labour and thousands of indirect labour.

“At the moment, new production facilities are being built in Sokoto. Obu is a green-field cement plant, and this means it has not been in existence before, and BUA is building it from scratch,” Binji said.

He further said the case of Sokoto, which is a brown-field project because it is an existing plant that has been in operations since 1967, saying that the Edo Cement Company had been in existence for more than 50 years, being formerly called Bendel Cement.

“Sokoto Cement has an existing production line with a capacity of 500,000 tons per annum, and it is producing at 100 percent of its installed capacity. BUA is building an additional line in Sokoto with a capacity of 1.5 million tons per annum. Right now, the capacity of Edo Cement plant old plant is 300,000 tons, running presently with a shareholder value of 87 percent. Sokoto and Edo cement plants are producing 42.5 cement grade, while Obu Cement Plant will produce any kind of cement that is allowed by the Nigerian Industrial standards,” Binji said.

On the effect of the project on the communities and compliance of the company to standards, Richard Gidado, Bua’s public relations officer, said: “Before any project is embarked on in the country, you are mandated to carry out an Environmental Impact Assessment (EIA), and that has already been done, and all the mitigation measures were identified and are being currently implemented. Some days ago, environmental inspectors came to ensure compliance and we have no issues or whatsoever with the six communities that make up the Obu Cement Plant,” adding that “people from the community are being employed by Bua’s building contractors, while pledging more employment for them when the plant kicks off operations.”

On the challenges building such a project, Binji said, “we have a lot of challenges setting up a business in Nigeria. You don’t only have to build the plant, but set up so many facilities. For example, you have to provide power, and the plant must be run independently off the national grid. All the power will be generated internally, and as a result of this the BUA Group has actually bought and installing a 50 megawatt power plant to be commissioned by the end of December.”

OSA VICTOR OBAYAGBONA