The African Export-Import Bank (Afreximbank) has approved a $200 million Corporate Finance Facility for BUA Industries Limited (BIL) to support its expansion efforts.
The bank disclosed this in a statement, noting that the first tranche of $150 million was disbursed on October 16, 2024.
Alhaji Abdul Samad Rabiu, CFR, CON, Chairman of BUA Industries Limited, stated that the $200 million corporate finance facility represents a significant milestone in BUA’s commitment to advancing Nigeria’s manufacturing, infrastructure, and energy sectors for both local consumption and export.
BUA Groups recent expansion project
Earlier this year, BUA Foods Plc signed an agreement with Turkish milling equipment manufacturer IMAS to construct four new wheat milling factories with a combined capacity of 3,200 tonnes per day.
- The statement noted that these new mills would increase BUA’s total milling capacity to 2.5 million metric tonnes annually.
- The company emphasized that these new factories will enhance manufacturing capacity and capabilities, allowing for the production of more high-quality products to help address food challenges in Nigeria.
- In addition, BUA Foods Plc signed a capacity expansion agreement with Italian company FAVA to increase its annual pasta production from 400,000 tonnes to 900,000 tonnes.
- The company stated that this expansion includes the addition of nine long-cut pasta production lines, boosting pasta output by 400,000 metric tonnes per year.
- Additionally, BUA Foods Plc signed another agreement with an Italian firm to supply packaging equipment for its operations.
BUA Foods Plc’s expansion projects are expected to intensify competition in the pasta production market, where major players like Flour Mills of Nigeria Plc and Dangote Foods are all competing for market share.
Expansion projects by companies amidst economic challenges
A recent report by Nairametrics highlights several companies investing billions in expansion projects across Nigeria. These include Dangote Cement, Nestlé, Emzor Pharmaceuticals, BUA Cement, Transcorp Hotels, among others.
- These expansion projects are taking place amid a notable wave of company exits over the past 18 months, beginning in early 2023.
- This trend follows significant reforms in the energy and foreign exchange markets, which have disrupted the business environment and triggered economic shocks that impacted company profitability.
- An analysis by Nairametrics showed that major Nigerian companies listed on the NGX reported a combined foreign exchange loss of N1.7 trillion—although some of these losses remain unrealized. Companies in the consumer goods sector were especially affected by these macroeconomic challenges.