BUA Group Plc has announced the decision to generate its own electricity to power production plants, especially in the cement production component of the group. The company opted for the private energy generation to cut cost of production with a focus on reducing prices of its cement product in the market.
In his remarks at the Annual General Meeting of the cement company yesterday in Abuja, Chairman, Board of Directors, BUA Group Plc, Abdul Samad Rabiu, said the company was spending too much of its income on power generation in a country that is still battling epileptic power supply nationwide.
Titled “Beyond Limits, ” the Annual Report & Accounts 2024 report of BUA Cement indicates a strong revenue performance for BUA Cement in 2024, driven by increased production capacity and strong market demand.
Shareholders of the company unanimously approved the proposed dividend of N2.05 per ordinary share at the AGM that was held at Transcorp Hilton in Abuja.
BUA had entered into power generation agreements, including a 70MW deal with Wartsila OY of Finland for the BUA Cement Sokoto Line 4, and a 20MW agreement with Green Power International for a gas-based power plant. The firm said the agreements were part of its strategy to boost cement production capacity and ensure efficient power supply for its operations.
The company also faced challenges related to currency fluctuations and increased borrowing costs.
The report acknowledged the impact of currency volatility, particularly in the first half of 2024, on the company’s financial performance. The report mentioned the inauguration of new production lines in Edo and Sokoto plants, which contributed to the foreign exchange loss of N92.1 billion.
Alhaji Rabiu attributed the sustained hike in the price of a bag of cement to the devaluation of the Naira, hoping that the local currency would soon gain strength against the dollar as the Nigerian economy improves.
Justifying the current market price of BUA Cement in the country, Rabiu said “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 N10,000 for an investment of billions of dollars is that bad. And at N10,000, that is the kind of money we’re making.
“Of course, we are working very hard, as I said, to improve, so that our energy cost is the biggest cost. 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.”
The company held the ground-breaking ceremony for a greenfield 3 million metric ton per annum plant in Ososo, Edo State. Upon completion, it will bring the total installed capacity to 20 million metric tons per annum by the first quarter of 2027.
“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 and contributing to our growing market share,” the chairman stated.
The 2024 annual report highlighted a significant revenue increase of 90.54% to N876.470 billion, despite facing challenges like currency volatility. The report shows a 48.2 percent increase in profit before tax, reaching N99.630 billion. However, profit after tax saw a smaller increase of 6.41 percent, suggesting higher tax expenses.
The report also detailed a reduction in cash and cash equivalents due to increased capital expenditure and debt repayment.
Shareholder equity grew marginally by 0.86 percent, while cash and cash equivalents decreased by 62.35 per cent, mainly due to increased capital expenditure and debt repayment.
Managing director/CEO of BUA Cement, Yusuf Binji said the 2024 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 emphasised the company’s commitment to sound corporate governance practices, with a framework designed to ensure accountability, transparency, and fairness.
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