It also secures BUA’s position as Nigeria’s second largest cement producer by volume, with a total capacity to 8 million tonnes per annum (MTPA) and an additional 3m metric tonnes plant coming on line in H2, 2020.
Nigeria’s a thriving cement market is controlled by four large players: BUA Group, Dangote Group, Sokoto Cement and the French company Lafarge. Although the Dangote Group dominated 93% of the entire industry’s profits in 2017, the BUA Group has made significant investments in the sector and continues to make inroads into the market – particularly in the north of the country.
In a recent interview with African Business, BUA Group Chairman Abdulsamad Rabiu stressed the importance of strategically positioning his cement factories in the north-western region to compete with Dangote Group’s sprawling operations in the south, where they have a major plant outside Lagos.
“I have a plant in Sokoto, nobody can compete with me in the north-western part of the country because I am the only one there,” he says. “I am the biggest cement producer in the region. The closest plant, competition-wise, to my plant in Sokoto is about 400km away. So, how do you get it cheaper or closer or easier than myself?”
Securing a regular supply of limestone, a key component of cement, is also important. Despite being a mineral-rich nation, Nigeria imports limestone due to the lack of infrastructural capacity, while BUA sources all of its supplies from its own mines near its own refineries.
“We have the mineral resources, we just need to harness them,” Rabiu said.
To counter the lack of domestic production, the BUA Group has invested over $2bn into its cement business over the last four years, which has helped to boost the company’s output.
“This January we commissioned a new line which produces 3m tonnes of cement, which pushes our total up to 8m tonnes,” he said. “And with that we have become the second largest cement producer in Nigeria. Maybe in two years we will be looking at 30m tonnes because we are setting up two new lines of 3m tonnes and 2m tonnes respectively.”
AFRICAN BUSINESS MAGAZINE