…..Grows Profit By 12.1% To N101.1bn

The Chairman of BUA Cement Plc, Abdul Samad Rabiu has promised to support the efforts of the Federal Government to drive down the price of cement in Nigeria.

Rabiu said this during an interview with journalists held at the sidelines of the company’s seventh Annual General Meeting held on Thursday in Abuja.

The Minister of Works, Dave Umahi had last week said that he will dialogue with cement manufacturers for them to reduce the prices of their products.

The Minister who spoke while featuring on Sunrise Daily, a Channels Television programme had said contractors have complained over the high cost of cement in the country and made claims that importing the product would be cheaper.

“I’m going to be running figures with them (cement manufacturers) to check the cost of cement if we import it and the cost they are giving us here,” he said.

But speaking on the development, the BUA Cement Chairman said the company is currently increasing its production capacity, noting that once that is achieved by the end of this year, it will boost availability of the product and drive down prices.

The price of cement hovers between N4,500 and N4,800 depending on the location.

Rabiu said, “I understand that the minister is quite concerned, that the price of cement is high at almost N5,000 per tonne. I appreciate where the government is coming from and the frustration from all the issues in the country.

“The price of cement at N5,000 is not high. If we look at the rate of the US dollar today, to import cement will be at N5,000. The cement cost, insurance and freight to any port in Nigeria will be in the region of about $100 a tonne. So, at $100 per tonne, if you take N800 to $1 then it will be N4,000 per bag. Then the port cost, and transportation from the port.

“It’s not that the government wants to import cement, but they are frustrated that the price of cement is high. What we told our shareholders is that we will engage with the government to support the government.

“Even though we know that the price of cement is high, it will not be cheaper if imported. We have two lines coming up by the end of the year, the Obu Line 3 and the Sokoto Line 5 that will give us a combined capacity of six million tonnes.

“By the time we have those two lines active with the current one, we will have about 17 million tonnes per annum. We are going to reduce the prices of cement once these two lines are up and running. This is the promise we are making to Nigerians.”

At the AGM, the shareholders approved the proposal of the board of directors to pay the sum of N2.80 per share in 2022 compared to the N2.60 per share paid in the previous year of 2021

Speaking on the financial performance, the BUA Cement Chairman told the shareholders that despite the challenging operating environment, the Company demonstrated strength and sustained capacity, which resulted in the excellent financial performance.

According to him, revenue rose by 40.3 per cent to N361.9bn in 2022 as against N257.3bn recorded in 2021, He said this outperformed its peers in cement volume growth during the period under review.

In terms of profitability, the BUA Cement Chairman explained further that profit after tax rose by 12.1 per cent to N101.1bn, in comparison to N90.1bn recorded in 2021.

On the outlook for the company, Rabiu expressed optimism that domestic demand for cement will continue to rise given the increased consciousness on the part of the governments at all level to improve existing economic and infrastructures, continued private-public partnerships, increasing interests in the Federal Government’s Road Infrastructure Tax Credit Scheme and the drive for Foreign Direct Investments.

He said, “As a company, we remain focused on our strategies primarily market consolidation as there is no market across the country where our presence is non-existent.

“We eagerly and excitedly await the completion of the Lines 3 and 5 at Obu and Sokoto during the first quarter of 2024. This would enable us provide more quantities of cement to the domestic market and particularly increase our market share across the African continent.”

Many of the shareholders who spoke at the AGM commended the board and management of the company for the improvement in financial performance.

They urged the board and management of BUA Cement not to relent in their quest to grow the company.