Raheem Akingbolu writes that the recent disbursement of N600 million as interest-free loans to rice farmers in Kano State by the BUA Group, has further confirmed the commitment of the company as a leading non-oil contributor to the Nigerian economy
At a time the government of Nigeria is making frantic effort to focus more on Agriculture and other sectors to grow the economy, BUA Group, in its commitment to boosting domestic rice production, recently disbursed a total of N600 million interest-free loan to rice farmers in Kano State, in Northern Nigeria. In addition to the interest-free soft loan of N288,000 each, improved seeds, fertilizers, pumping machines and other rice farming tools were said to have been distributed free to over 2,000 rice farmers in the State. The occasion which held in Imawa Village, Kura LGA of Kano State, brought together rice farmers under the umbrella of Rice Farmers Association of Nigeria (RIFAN), Kano Chapter from Kano and Jigawa States.
Through the gesture, the company has thus demonstrated that it aligns with federal government aspiration to diversify the economy to non-oil sectors. In many fora, analysts have not only identified diversification as the most competitive and strategic option for Nigeria in light of her developmental challenges, they have called for adequate funding by government and corporate entities.
It is believed that Diversification has a lot of benefits for Nigeria to maximally utilise her abundant resource – base to rebuild the economy and enjoy the benefits of all the linkages, synergy, economies of scale and foreign investment profile. Many also believe that it will help the country build her human capital, exploit new opportunities, lessen averagely operational costs and grow the standard of living and confidence of the citizens for national renaissance. Considering the fact that Agriculture was the main stay of the Nigeria economy before the discovery of crude oil in 1956, it is believed that with adequate funding of agriculture, the diversification of the nation’s economy will be an easy task.
Aside the provision of fund for the farmers, BUA management team has also indicated that it would continue to play advisory roles for the farmers. For instance, during the presentation of farm inputs and tools to the farmers, a Group Executive Director (GED), of the company, Kabiru Rabiu was in attendance to engage with the farmers and supervise the distribution. He expressed optimism on the mutual partnership between the rice farmers and BUA Rice Milling Company.
“Kano State, by far, is one of the most potential States in the country for rice farming and BUA is happy to have successfully established a mutual benefitting partnership with the rice farmers”. He further stated that the non-interest soft loan, which is directly from the company’s capital, granted to the farmers was BUA’s gesture of encouraging the farmers to increase their yields,’’ he said.
Kabiru further stated that it is the organisation’s initiative of supporting government’s plan towards its drive to diversify the Nigerian economy into agriculture as an alternative to crude oil exploration.
As 2,000 beneficiaries were reached during this pilot phase, BUA was said to be targeting 50,000 farmers to benefit from the scheme in the next four years with a target of a minimum of a million tonnes from Kano State alone.
Perhaps coincidental, the company’s profile got boosted around the same time as it was named amongst the first 50 Companies to work in 2016 by Jobberman in the third edition of its ‘Best 100 Companies to Work For’. The rating organisation focuses on recognising and celebrating top employers in Nigeria. The company was rated ahead of some financial institutions, telecom operators, FMCGs and other corporate organisations that featured on the list.
According to the Group Head, Human Resources, Dotun Adako, the feat is indicative of BUA’s consistent commitment to employee welfare, human capital development, work-life balance, competitive remuneration and an equal opportunity policy adopted by the organisation.
Speaking further, Adako said it was no surprise BUA Group made it to the list because BUA is reputable for investing considerably in employee development, adherence to acceptable labour practices and constantly seeking out ways to enhance positive employee workplace experience.
The group head was quoted as saying that the organisation is assiduously working to continue delivering on its commitment and that it wants all its stakeholders to move up the ladder considerably in the next edition of the Jobberman ranking.
The ‘3rd Annual Jobberman Best 100 Companies to Work For’ is focused on identifying, recognising and celebrating top employers in Nigeria, as rated by employees and professionals.
BUA Group has over the past few years embarked on a series of strategic acquisitions which has seen its business portfolio expand to include the Cement Company of Northern Nigeria (CCNN), Edo/OBU Cement, BUA Flour Mills, BUA Sugar Refinery, BUA Pasta, BUA Ports and Terminals, and BUA Estates amongst other agribusiness holdings.
As at the time the company entered, trading was quiet different in the country, compared to now. It was very difficult, because access to funding and foreign exchange were both very challenging. However, it was also quite lucrative as not many companies were able to compete. This is where BUA got it right. The fact that it chose to participate early is believed to have assisted the company in starting its manufacturing concerns.
The first of these business initiatives was to set up a flour plant in Lagos, driven by huge demand for flour. At the moment, the company has the flour mills, the pasta plants, a sugar refinery in Lagos and the vegetable oil processing mills and the cement projects that will soon be inaugurated in Port Harcourt. Just recently, the company started production of cement from its three million metric tons per annum cement plant in OBU, Okpella, Edo State.
Medium term strategy
Having established self as a household name, a source close to the group, recently revealed to THISDAY that its strategic focus will now be to diversify to business areas with greater potential for export where the sourcing and utilisation of foreign exchange is less. This is necessary, according to the source, because most of the materials needed for production can be sourced locally, whilst also positioning its current line of foods and infrastructure business for market leadership.
Just recently, the Group announced the divestment of its flour business to Olam International in a deal worth $275m.
The agreement signed with Olam according to the management of BUA, marks a major milestone in the group’s medium-term strategy. Over the years, the group has run one of the largest and most efficient flour milling businesses in Nigeria and the management appears to have confident in the value it will add to the buyer’s operations.
Implementation of government policy
Another factor that has helped the growth of the brand is the understanding of the body language of the government and consumers. For instance, as part of strategic plan to effectively implement government policy on backward integration of the manufacturing sector of the Nigerian economy, BUA Group has since embarked on rapid expansion of its sugar plantations in Kwara and Kogi States.
At the moment, extensive work is said to be ongoing in Lafiagi, Kwara State with over 20,000 hectares, while it also has another 50,000 hectares of farmland in Bassa, Kogi. These two operations form the fulcrum of its backward integration programme for sugar and it is believed that this will further reduce the country’s dependence on imported raw sugar while supporting the value chain in sugar production within Nigeria.
Local business climate
At various fora, the group has consistently emphasised its support for the work being undertaken by government to involve the private sector in ensuring that all legal and regulatory frameworks are effectively in place to boost the real sector of the Nigerian economy.
Nigeria is the most populous country in Africa with around 170 million people. That means a lot of opportunities with adequate resources and a huge market. Apart from investment in the oil sector of the economy, there are other resources in Nigeria that could definitely contribute more to the economy.
Taking the cement industry as a prime example, BUA has always had a lot of limestone reserves in the country; this is evident in the way the industry has grown now that people are investing in that sector.
The various ministries are spending huge sums of money on key infrastructure to attract fresh foreign investment, despite the progress that has been made, energy issues remain a drain on growth.
Nigeria is a challenging environment but the returns are high. A good idea will always be a good idea, no matter where you are. There are so many indigenous and foreign companies operating here in Nigeria and a number of them are highly successful.