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BUA Group founder, Abdulsamad Rabiu, today in an interview with CNBC Africa, stated that the group’s total production capacity could hit 8 million metric tonnes by the end of the 2018.

He also provided an insight into the Sokoto operations and the cement industry as a whole. Here are excerpts from the interview:

Reasons for the expansion

Though Nigeria currently produces 30-35 million metric tonnes per annum, Rabiu believes there is still room for growth. The current cement consumption of  120/130 kilograms per head, is low  for a country of about 200 million people. In his opinion, consumption should ideally be around 200 kilograms per head.  This would imply a production volume of 40-50 million metric tonnes per annum.

Other operators in the industry, Dangote Cement and Lafarge have also unveiled their expansion plans.

Why Sokoto?

Rabiu also hinted at what could be the company’s plans to export. The Sokoto plant, according to him, was close to the Niger Republic and the Republic of Benin. This would generate foreign exchange revenue for both the company and the country as a whole.

The BUA boss also revealed that the state has large limestone deposits.

The group had to pursue the project on its own because other shareholders were unwilling.

Forecast total capacity

The Kalambaina cement plant has a production capacity of  1.5 million metric tonnes per annum. Cement Company of Northern Nigeria (CCNN), half a million tonnes.  Obu Line 2 is expected to come on stream by year end, bringing total production capacity in Edo Cement to 6 million metric tonnes.

The group’s total production capacity will thus hit 8 million metric tonnes per annum.

Deal book 300 x 250

Challenges

Rabiu, however, stated that the only challenge involved was to operate the plants efficiently. Nigeria has epileptic power supply, and industries have to generate their own power. Interruption in gas supply mean the plants will have to rely on LPFO and coal.

CCNN last month, sent a notice to the NSE notifying it of its intentions to merge its operations with Kalambaina Cement.

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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