Nigerian Billionaire Opens Cement Factory, Intensifies Competition With Dangote Cement, Others
- BUA Cement, a company owned by Abdul Samad Rabiu, Nigeria's billionaire, has kicked off operations in its cement factory in Sokoto
- The multimillion-dollar plant has a capacity of 3-million-metric-tonne, which is historic in the country
- There are speculations that the new plant would trigger a possible reduction in cement price
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
BUA Cement has commenced production at its state-of-the-art Sokoto cement plant Line 5, a significant milestone in the company’s strategic expansion plans.
The facility is a multimillion-dollar expansion project with a 3-million-metric-tonne capacity per year, led by Nigeria’s billionaire Abdul Samad Rabiu.
Source: UGC
Legit.ng had reported that the plant, earlier set for inauguration in January 2024, would trigger a slash in cement prices.
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Sokoto plant commences operation
With the start of operations on Monday, December 18, 2023, the Sokoto cement plant Line 5 demonstrates BUA Cement's dedication to its expansion goals.
In addition, its operations brings the company's installed capacity closer to the estimated 17 million metric tons annually.
As soon as ongoing projects are finished, the company aims to reassess prices in Q1 2024.
Billionaire.africa reported that the opening of the new Line 5 cement plant in Sokoto demonstrates the company's dedication to satisfying the rising demand for high-quality cement.
It added that BUA Cement is well-positioned to contribute more significantly to the infrastructure and building development of Nigeria thanks to its increased manufacturing capacity.
Samuel Oyekanmi, a macroeconomic analyst stated that increased production has the potential to drive increased revenue and efficiency especially amidst rising competition in the cement producing and industrial industry in Nigeria for a start.
He noted that the cement industry has recorded increased activities in recent years already growing by an average of 3.04% in the first nine months of 2023, following a growth rate of over 5% last year.
He added,
"Definitely, the start of operation of the new multi-million dollars cement plans sends positive signal to the industrial sector and the economy as a whole. It is more significant knowing that Nigerian billionaires believe and in the country and are willing to invest in the nation."
Strong financial record
Under Rabiu's direction, BUA Cement posted strong financial results for the first nine months of 2023. During the period, the company's revenue increased to N335.86 billion from N262.6 billion in the corresponding period of 2022.
Concurrently, the profit after tax escalated from N74.01 billion to N76.06 billion, thereby reinforcing its standing as a significant cement manufacturer in Nigeria and a notable cement producer in Africa.
This comes after the BUA Group took a significant step in crashing the price of their cement from N5,500 to an ex-factory price of N3,500 per bag.
Legit.ng, however, reported that the cement has continued to be sold for N5,000 and above in several regions of the country.
Two months after price reduction, experts speak on why BUA Cement continues to sell above N5,000/bag
Legit.ng earlier reported that marketers were selling the price of BUA cement above N5,000 a few days after the price slash announcement by the company.
According to recent findings, a 50kg bag of BUA cement costs, on average, N5,500 in the marketplaces.
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Source: Legit.ng
