Nigeria needs more cement manufacturers to stem price increase - Abdul Rabiu

Nigeria needs to attract more investments and operators into the cement manufacturing sector in order to reduce cement prices.

Chairman, Board of Directors of BUA Cement Plc, Alhaji Abdul Samad Rabiu yesterday at the 5th annual general meeting of the cement company in Abuja advocated for more players in the cement industry, noting that the quantity of cement produced by BUA, Dangote and Lafarge could not meet the demand considering Nigeria’s high population of about 220 million people.

He explained that currently, the three cement companies in the country produce about 30 million tonnes per annum hence the need to have more players in order to bring down the prices.

Rabiu said though more players would mean more competition for him but it was in the best interest of the country.

He however urged Federal Government to do everything possible to bring more investors into the sector with a view to meet the cement demand of Nigerians.

“The high price of cement is of great concern for me, the price is actually high. We are 210 or 220 million people, 30 million tonnes of cement per annum is actually low for us.

“No one can really control the price because it depends on demand and supply. We are trying hard to ensure the price is not as high as it is now.

“Nigeria is growing with a huge economy, we need more plants on stream to cater for the rising demand of cement in the country.

“Egypt produces 85 tonnes of cement per annum and the demand of cement in that country is just 50 million tonnes per annum and that is why the country sells one of the cheapest prices of cement on the continent,” Rabiu said.

In December, BUA cement announced the signing of an agreement with CBMI, part of the Sinoma Group of China to raise its existing output capacity from a potential 11 mmtpa to 20 mmtpa with the construction of 3 additional lines, totalling 9 mmtpa.

To enhance its financial flexibility, BUA issued its maiden corporate bond which was oversubscribed leading to a raising of N115 billion. The proceeds from the bond were deployed to financing expansion of 3mmmtpa, line -3 plant at kalambaina in Sokoto State.

BUA Cement has announced plans to commission additional production lines, to raise the firms’ current cement capacity of 11 metric tonnes per annum in 2021 to 20 metric tonnes per annum by 2022.

The introduction of new lines to the existing ones, the BUA board believes, is a strategy to meet the sustained demand for cement, which has led to exorbitant prices to detriment of builders and potential homeowners.

Rabiu informed BUA shareholders that, efforts were on for the commissioning of Kalambaina line-3, which will add 3mmtpa to the existing 8mmtpa in 2021.

The firm also announced a leap in revenue of 19.3 per cent to N209.4 billion in 2020 compared to N175.5 billion in 2019.

Presenting the company’s statement of accounts to the shareholders, Rabiu said the company experienced growths in all performance indexes notwithstanding Covid- 19 pandemic challenges.

While revenue grew by 19.3 per cent in the year under review, he said volumes rose to 5.1 million tons, EBITDA increased by 18.0 per cent to N96.8 billion from N81.9 billion in 2019.

“With EBITDA margin being resilient at 46.2 per cent, we also recorded 19.4 per cent growth in Profit After Tax (PAT) to N72.3 billion and 19.6 per cent rise in Earnings Per Share (ESP) to N2.14 from N1.79 as at 2019”.

The board recommended for approval of N2.067 per ordinary share dividend which was approved.