As BUA Boosts Nigeria’s Cement Production Capacity
Obinna Chima writes on the significance of BUA Cement Plc’s Sokoto line four factory that was unveiled recently
The inauguration of BUA Cement Plc’s ultra-modern three million metric tonnes per annum Sokoto line four factory and the groundbreaking of the company’s line five have been described as major investments that would contribute towards lowering the price of cement in the country and also ramp up production capacity.
The unveiling of the new plant and the groundbreaking ceremony were conducted by President Muhammadu Buhari.
The price of the product which presently goes for about N5,000 per bag, remains high in Nigeria because the few producers are not able to meet the country’s huge demand.
But the founder and Chairman of BUA Group, Alhaji Abdul Samad Rabiu, said his company was targeting to ramp up its total production capacity to 17 million metric tonnes of cement per annum next year in order to help lower the price of the product.
In his welcome address during the unveiling of the new plan and groundbreaking of the line five, the industrialist pointed out that in the past six years, BUA Cement has completed four plants – two in Obu, Edo State and two in Sokoto (of which the Sokoto line 4 is the fourth) with BUA’s total production capacity now standing at 11 million tonnes with the completion of this plant.
He disclosed that next year, BUA Group intended to complete the construction of two new plants of three million metric tonnes each, saying construction is already on-going – one in Edo and the other in Sokoto.
“We expect these plants to be completed next year, which will bring our total production capacity to 17million metric tonnes,” he said. “We look forward to Your Excellency coming to commission them by the first quarter of 2023,” he added.
Rabiu pledged that BUA would continue to invest in the cement industry until Nigeria becomes self-sufficient and cement was made available, accessible, and affordable for all Nigerians.
He stated, “Mr. President, there are many reasons one can attribute to the important nature of this plant. The attendant effect of these investments in new factories goes beyond the community and the state. It extends to the region and the entire country.
“From a job creation and economic standpoint, the Sokoto plant continues to be the largest private sector employer of labour in the North-western part of Nigeria.
“Also, by adding value to resources mined in Nigeria, Nigeria is being saved billions of US dollars in foreign exchange that would have been spent on importation, whilst also ensuring product availability.
“In fact, 95 per cent of all the raw materials used in our cement manufacturing process are sourced locally. In addition to this, and our investment in social impact and CSR programmes for the community and Sokoto State at all levels, we are also committed to environmental sustainability.
“We have diversified our energy sources by introducing greener alternatives – in this case, LNG – to power the kiln and 48 megawatts power plant. Our power plants are now running on 100 per cent LNG, leading to reduced carbon emissions. This is the first of its kind at any cement factory in Nigeria.”
Rabiu said this meant also that as soon as the AKK gas project came on stream, BUA would be ready to be one of the first off-takers.
This would also encourage further industrialisation within the region, open new industries and ensure greater development and prosperity for this region and the country in general.
“Mr. President, all of this will not have been possible without your support and commitment to the development of the Nigerian economy,” Rabiu told Buhari.
He added, “As a proudly Nigerian company, we will do our best to continue to support those efforts. The support of the CBN and its governor in setting up this gigantic project is also worthy of mention.
“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 because, as mentioned earlier, these industries potentially save the country billions of dollars yearly and also ensure products are readily available across the length and breadth of the country.”
Also speaking at the ceremony, the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, urged manufacturers in the country to urgently control the rising prices of cement and other building materials.
Emefiele noted that manufacturers must first strive to satisfy the local market to help make cement affordable before exporting the product to external markets.
“Indeed, there has recently been calls by construction companies urging our steel and cement manufacturers to do something about the sky-rocketing of these two essential items in the construction industry,” he said.
Emefiele said the cement industry remained key to solving the country’s unemployment challenges as well as boosting growth.
He added, “We are aware that some of our cement manufacturers are producing for both the domestic and export markets, but we urge them to pay more attention to satisfying the domestic needs so as to bring down prices.”
Emefiele reiterated the central bank’s commitment to providing needed support for importation of spares, plants and equipment needed to increase the production capacities of cement plants in the country.
While calling on prospective investors to take advantage of the current incentives provided by government to boost the sector, he said the CBN was ready to provide the needed financing for both current and new investors in the industrial sector for the importation of requisite machinery.
He pointed out that as part of the efforts by the current administration to drive productivity in the industrial sector and conserve foreign exchange, a decision was taken by the government in 2015 to restrict access to foreign exchange for imports of 43 items, which could be produced in Nigeria, but for which billions of US Dollars were being expended annually on imports.
He said, “Our nation has been able to conserve billions of dollars, as no dollar from our external reserves has been spent on imports of cement into the country in the last seven years.”
He said the investments had saved and created several thousands of jobs across multiple sectors.
Emefiele pointed out that the achievements so far recorded in the cement sector were not a coincidence but a reflection of the success of the backward integration policy of the Buhari administration.
The CBN governor said with significant opportunities in housing, construction and related industries, there were still sufficient room for additional investments in the sector. He urged potential investors to take advantage of these opportunities.
He also assured current and prospective investors in the industrial sector that the apex bank was ready to collaborate with stakeholders to facilitate the development of a viable manufacturing sector in Nigeria.
Emefiele said, “For those who are willing to invest in new Greenfields or existing Brownfield projects, the CBN will provide all the support needed both in naira and dollars to import plant and equipment to actualise your dreams.”
He said the CBN’s stance was in harmony with the apex bank’s resolve to create a professional and people-oriented central bank to act as financial catalyst for job creation and inclusive growth in Nigeria.
Emefiele said, “I am particularly delighted to see that the painstaking efforts and ingenuity of Nigeria’s private sector are yielding bountiful fruits in broad daylight. These efforts, such as the one being displayed here today by the BUA Group, are critical complementary ingredients to reducing unemployment and boosting production activities in our country.
“Not least, also, these investments help to support the CBN’s mandate of promoting stable macro-economic growth in the country. I would, therefore, like to congratulate the BUA Group led by its inspirational and imitable Group CEO, Alhaji Adbul Samad Rabiu, for this investment.”
Emefiele stated further, “The BUA Group’s investment in Sokoto and in other parts of Nigeria reflects their belief in the country, and in the immense opportunities available in the industrial sector, given the abundance of human and natural resources in Nigeria.
“I am aware that this facility, which cost millions of US Dollars, was fully funded by equity contributions of the BUA Group without resorting to any source of external finance…
“Following implementation of this new directive, I am pleased to note that the production capacity of the cement industry in Nigeria has doubled from 30 million tonnes in 2014 to about 60m tonnes in 2021.”
Also, President Buhari thanked Rabiu and the entire team for the great work they were doing in supporting the government’s economic diversification and job creation agenda.
He noted that the company, which had completed four new cement plants of similar capacity in the last five years in different parts of the country and was set to complete two more plants soon, had shown through these investments that they believed 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.
“I always remind Nigerians that every region, indeed, every state, in Nigeria sits on huge reserves of resources. For example, in this area, Kebbi, Sokoto and Zamfara can boast of rice production, gold and other precious metals development and, of course, heavy industries like cement manufacturing.
“We remain prepared to support serious investors to set up businesses that will take advantage of these opportunities through value addition so as to take advantage of the huge market here, as well as in the greater African region and the world at large.”
He stated, “I want to now call on all entrepreneurs and businesses to emulate what is being done here. The task of nation building requires all hands to be on deck. The public and private sectors must collaborate if we are to achieve our aim of collective peace and prosperity across the entire nation.”
The Managing Director/Chief Executive Officer, BUA Cement, Alhaji Yusuf Haliru Binji also thanked the federal government for the support given to the company over the years as well as for creating an enabling environment for businesses to thrive.
He stressed that the plant is environmental friendly and does not pose any threat to the society.
Also, the President, Cement Manufacturers Association of Nigeria, Alhaji Mohammed Lawal Bello, described the cement industry as one of the fastest growing sectors in the country.
According to him, from a production capacity of five million metric tonnes in 1989, to about 150 million presently, “one can say that the growth is exponential.”
He attributed the exponential growth to the fact that government policies were achieving the desired results in the sector, while commending President Buhari.
He also hailed the Founder of the BUA Group and staff of the cement company for the achievement.
He also urged new investors in the country to take advantage of the favourable business climate.