Business
Price Of Cement May Drop As BUA Unveils Plan To Generate Own Electricity
The BUA Group Plc has announced plans to begin generating its own electricity to power its production plants, particularly its cement factories.
The firm said the move is aimed at reducing operating costs and ultimately lowering the market price of cement.
Chairman of BUA Group, Abdul Samad Rabiu, disclosed the decision on Tuesday at the company’s Annual General Meeting (AGM) held at the Transcorp Hilton Hotel, Abuja.
“We are spending too much of our income on power generation in a country that is still battling epileptic power supply,” Rabiu said.
The move, he explained, forms part of BUA’s strategy to tackle the rising cost of production, largely driven by energy expenditure, and deliver better value to shareholders and customers.
The company has signed a 70MW power agreement with Wartsila OY of Finland to power BUA Cement’s Sokoto Line 4 and another 20MW gas-based power project with Green Power International.
These partnerships are expected to improve the group’s energy independence and operational efficiency.
“That’s why we decided to set up our new energy, so that we can be able to produce our energy using our own gas. Because there is a lot of money on gas,” Rabiu added.
The company also broke ground on a new greenfield plant in Ososo, Edo State, with a capacity of 3 million metric tonnes per annum. Upon completion by Q1 2027, BUA’s total installed capacity is projected to hit 20 million metric tonnes per annum.
“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 said.
Shareholders at the AGM unanimously approved a dividend payout of ₦2.05 per ordinary share, as BUA Cement posted impressive results in its 2024 Annual Report titled “Beyond Limits.”
According to the report, the company’s revenue rose by 90.54 per cent to ₦876.47 billion, driven by increased production capacity and strong market demand.
Profit before tax jumped by 48.2 per cent to ₦99.63 billion, while profit after tax grew more modestly by 6.41 per cent, attributed to higher tax liabilities.
However, cash and cash equivalents dropped by 62.35 per cent, largely due to increased capital expenditure and repayment of existing debts. Shareholders’ equity also saw a slight increase of 0.86 per cent.
Devaluation Blamed for Cement Price Hike
Rabiu justified the controversial cement pricing, blaming the devaluation of the Naira for driving up operational costs.
“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 ₦10,000 for an investment of billions of dollars is that bad. And at ₦10,000, that is the kind of money we’re making,” he noted.
He expressed hope that the Naira would regain strength in the near future, which could positively impact production and reduce consumer prices.
Speaking, the Managing Director/CEO of BUA Cement, Yusuf Binji, said the company’s 2024 results demonstrate its resilience and strategic foresight.
“The results reflect not only the strength of our operational execution but also the effectiveness of our forward-looking strategies in navigating the complex market conditions,” Binji said.
He added that BUA remains committed to corporate governance, ensuring transparency, accountability, and fairness in all areas of its operations.
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