BUA Group Plc, one of Nigeria’s leading conglomerates, is embarking on a strategy to generate its own electricity for production plants, particularly its cement operations, as it seeks to mitigate soaring energy costs and stabilise product pricing. The move comes as the company reported a strong financial performance for 2024, despite significant currency volatility.
Speaking at the company’s Annual General Meeting (AGM) in Abuja, Abdul Samad Rabiu, chairman of the board of directors, highlighted the substantial expenditure on power generation in Nigeria’s challenging electricity situation. “Our energy cost is the biggest cost,” Rabiu stated, justifying the decision to invest in proprietary power solutions.
The company’s 2024 Annual Report & Accounts, titled “Beyond Limits,” revealed a 90.54 per cent increase in revenue to N876.470 billion, primarily driven by increased production capacity and resilient market demand. Shareholders at the AGM, held at the Transcorp Hilton, unanimously approved a dividend of N2.05 per ordinary share.
BUA Cement has already entered into key power generation agreements, including a 70MW deal with Wartsila OY of Finland for its Sokoto Line 4 and a 20MW agreement with Green Power International for a gas-based power plant. These initiatives are central to the firm’s strategy to enhance cement production efficiency and ensure reliable power supply for operations.
Despite the strong top-line growth, BUA Group faced considerable headwinds from currency fluctuations, which impacted its financial performance, particularly in the first half of 2024. The inauguration of new production lines in Edo and Sokoto contributed to a substantial foreign exchange loss of N92.1 billion. Rabiu attributed the sustained hike in cement prices to the devaluation of the Naira, expressing optimism for a stronger local currency as the Nigerian economy improves.
Defending the current market price of cement, Rabiu emphasised the need for profitability given the scale of investment. “We need to make a little bit of money. We have staff, we have shareholders. And we invested a lot. So, I don’t think the price of cement at N10,000 for an investment of billions of dollars is that bad,” he remarked.
In a push for further expansion, BUA Cement held the groundbreaking ceremony for a new three million metric tonne per annum plant in Ososo, Edo State. Upon its anticipated completion by the first quarter of 2027, this will elevate the company’s total installed capacity to 20 million metric tonnes annually.
“This expansion increased our installed capacity from 11 million to 17 million metric tonnes per annum, further solidifying our position as a dynamic player in Nigeria’s cement industry,” the chairman noted.
The 2024 report also indicated a 48.2 per cent increase in profit before tax, reaching N99.630 billion. However, profit after tax saw a more significant increase of 6.41 per cent, reflecting higher tax expenses. The company’s cash and cash equivalents decreased by 62.35 per cent, primarily due to increased capital expenditure and debt repayment, while shareholder equity marginally grew by 0.86 per cent.
Yusuf Binji, managing director and CEO of BUA Cement, affirmed that the 2024 results underscore the strength of the company’s operational execution but also the effectiveness of its forward-looking strategies in scaling market conditions. He reiterated the company’s commitment to robust corporate governance practices, ensuring accountability and transparency.
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