BUA Group eyes fresh $450m investment in new 3mmtpa Adamawa cement plant

Foods and infrastructure conglomerate, BUA Group, appeared Friday to have begun testing the waters for the establishment of a new cement plant to straddle across two local government areas in Adamawa State. The local governments are Guyuk and Lamurde.

Abdul Samad Rabiu, the founder and executive chairman of the group gave strong signals to this thinking at the weekend when visiting with Ahmadu Umaru Fintiri, the governor of the state.

Rabiu gave first hint of a possible plant that could easily produce three million metric tonnes per annum (mtpa) of the product per annum in Adamawa state, even adding that in the process of building such a plant, the company could also generate 50 megawatts of electricity.

Conservative estimates by those familiar with the cost of that size of plant say the company can be looking to invest between $450 million to $500 million along with a 50 megawatts electricity plant.

The company’s similar capacity plant, the Sokoto Kalambaina II plant, which it started constructed in 2018 is costing it $450 million.

BUA’s cement companies across the country are estimated to have capacity to produce 11 million mtpa of cement. In January it completed the consolidation of its cement businesses.

Just last month, one of its major plant builders, Sinoma, said it had completed the construction of a second 6000t/d line at the group’s Obu & Edo Cement plant, bringing the plant’s total integrated capacity to 5.5Mt/yr. “The successful fulfilment of the project has laid a solid foundation for the company’s in-depth localised operation and comprehensive cooperation with the BUA Group,” Sinoma said in statement.

But the fresh proposal being discussed by the group in Adamawa State is seen by analysts as the Forbe’s listed billionaire’s bullish credentials to ramp up its cement production capacity.

Last October, while announcing the consolidation of its cement operations in Nigeria, Rabiu said: “We intend to continue creating value for the benefit of shareholders of the consolidated company by maintaining our focus on outperforming the Nigerian cement industry across key indices through a laser like commitment to excellent products and service delivery, operational efficiency as well as maintaining our leadership position in our home markets”.

On Friday, addressing Governor Fintiri, Rabiu spoke to what looked like a laid out plan for the proposed new cement plant, informing the governor that findings showed that both councils have the highest quality of limestone deposit in the country and the company was ready to begin the investment in the state.

He spoke about plan to build the plant using new technology for the exploration and supply of power to the proposed cement plant and other communities of the two councils, with the plant able to create 3000 direct and 5000 indirect jobs in the state.

With a capacity of 3 million mtpa, it is estimated that the group could be investing anything between $450 million and $500 million to build a brand new plant in Adamawa State, something Rabiu alluded to when he told the governor that the Plant will be the major investment in the North East, while urging his government to support the move.

Other notable information about the proposed plants is that raw materials would be sourced locally, Rabiu maintained, while adding that, development of Adamawa State within one year in office despite economic challenges was the key attraction of the group to invest in the state.

Following the investment disclosure the chairman went on to announce the donation of three ambulances and N200 million to help in the fight against coronavirus in the state.

Governor Fintiri said his administration’s effort in exploring local contents has started yielding results and thanked BUA Group for showing interest in establishing the cement plant in Guyuk.

He assured the management team of BUA that government will make whatever is required available and provide the necessary support to create enabling environment to ensure that the planned cement company in Guyuk becomes a reality.

The Adamawa government will also protect the investment once established, Fintiri assured, adding that his administration will maintain the good relationship with the company for the benefit of the state.