BUA: The making of a cement giant
BUA Group has taken a number of steps to tap into growing opportunities in the Nigerian economy. BUA’s main escapades are in the manufacturing sector, particularly in the cement industry, where it is consolidating its place as Nigeria’s second largest cement maker.
Last Tuesday, vice president, Yemi Osinbajo, commissioned BUA’s 1.5 million metric tonnes Kalambaina cement plant in Sokoto State, which gulped $350 million to build.
The ultramodern cement plant has a 32 megawatts multi-fuel captive power plant and a coal mill, blessed with huge limestone deposits.
One significant thing about the plant is that it increases cement production in Nigeria and BUA’s capacity in particular.
For starters, BUA is building a $1 billion Obu Cement Complex in Okpella, Edo State. The plant, commissioned in August 2017, will be completed by end of this year.
By the time the Okpella plant is completed by end of the year, BUA’s total production capacity will hit eight million MT and would give 35 percent of the entire volumes produced in Nigeria.
Another critical aspect of this plant is proximity to Niger Republic, which enhances its export potential. The cement plant started three years ago when BUA engaged Sinoma at the height of foreign exchange crisis and began production in March this year.
Speaking at the commissioning of the plant, Osinbajo said the cement factory is a demonstration that Nigeria has vast potential, which investors should explore. According to him, the National Infrastructure Master Plan recommends that Nigeria needs to spend $3 trillion to bridge the infrastructure gap as well as five percent of GDP annually.
“Nigeria now produces over 40 million MT of cement, more cement than any other country in Africa. Nigeria’s huge market size, low per capita cement consumption of 125kg and estimated housing deficit of 17 million are key drivers,” Osinbajo said.
He appealed to cement makers to cut prices while also considering producing more of concretes for road construction, stating that now is time for Africa’s most populous country to commence building roads with concretes.
“We can revolutionalise road construction by simply deciding that we can build roads with concretes. I have no doubt that this will boost employment generation and boost economic growth,” he stated, adding that a road has been completed in Ogun with concretes, while the Apapa road is being rehabilitated with concretes.
Abdul Samad Rabiu, chairman and CEO of BUA Group, said the new plant will be generating more power than is currently generated by the entire Sokoto State.
According to Rabiu, the plant will run on coal, heavy oils or a mixture of both, and the use of coal is expected to save over 70 percent of energy costs compared with 15 million litres of fuel oil per month or 40 tonnes or even 20 trucks of fuel that could have been used per day.
He said at least 2,000 direct and 10,000 indirect jobs are required to get the plant running, adding that the $1 billion Obu Cement Complex in Okpella, Edo State, commissioned in August 2017, will be completed by end of this year.
BUA is not only playing in the cement industry, but also in rice, edible oils, sugar, and real estate, among others. It operates rice milling factories with a capacity of 200,000 tonnes per annum as well as 1,000 tonnes of edible oils per day. It is planning to begin production of 2.5 million metric tonnes of steel annually.