Displaying items by tag: BUA Cement

Nigeria: BUA Cement recorded a decline in profit in the first half of 2024, with post-tax profit falling to US$20.7m, down from US$38.3m in 2023. Profit before tax also decreased, standing at US$24.1m compared to US$46m a year ago.

Nigeria: BUA Cement has appointed Chikezie Ajaero as its acting chief financial officer. He succeeds Jacques Piekarski in the post, who resigned at the end of April 2024.

Ajaero is a fellow of the Institute of Chartered Accountants of Nigeria and has over 25 years of experience in financial reporting and control. He also holds a masters of business administration from the University of Lagos. He previously worked as the finance director for the company’s Obu cement plant since 2020.

Nigeria: BUA Cement has appointed Chikezie Ajaero as its Acting Chief Financial Director (CFO). He succeeds Jacques Piekarski in the full post of CFO.

Ajaero has worked as the Finance Director of BUA Cement’s Obu plant since 2020. He is an accountant with a master’s of business administration from the University of Lagos. He is a fellow of the Institute of Chartered Accountants of Nigeria and holds over 25 years of experience in financial reporting and control.

Nigeria: BUA Cement reported sales of US$115m in the first quarter of 2024, up by 51% from US$76m in the first quarter of 2023. The producer’s cost of sales, meanwhile, more than doubled to US$83m. As such, post-tax profit declined by 33% to US$12.8m.

Nigeria: BUA Cement recorded 27% year-on-year growth in sales in 2023, to US$300m. This was in spite of ‘economic challenges,’ including a rate of inflation of the Nigerian Naira of 30% at the end of the year. Costs rose by 39% to US$180m, both due to inflation and energy crises. Nonetheless, the group grew its earnings before interest, taxation, depreciation and amortisation (EBITDA) by 10% to US$111m. Profit after tax dropped by 31% to US$45.4m.

Managing director and CEO Yusuf Binji said “Clearly, the operating environment in 2023 was challenging, given the different headwinds confronted at the start of the year and especially with the devaluation of the Naira.” Looking ahead to the current year, Binji added “We could commission the new 3Mt/yr lines at the Sokoto and Obu cement plants, activate a new 70MW gas power plant in Sokoto and eagerly await the activation of the 70MW gas power plant at Obu during the first quarter of 2024. Apart from these, we took delivery of over 500 trucks to support our distribution activities, which further deepened our market presence.”

The Daily Trust newspaper has reported that religious leaders held thanksgiving services for a 50% pay rise for BUA Cement's employees at the company’s Sokoto cement plant on 1 March 2024.

Nigeria: BUA Cement has reportedly stated operations on the new 3Mt/yr Line 5 at its Sokoto cement plant. Local media has reported that inauguration will follow in January 2024, as scheduled.

Nigeria: BUA Cement recorded sales of US$423m throughout the first nine months of 2023, up by 27% year-on-year from US$333m in the first nine months of 2022. Growth in the group’s cost of sales outstripped revenues growth, at 31%, to US$236m. Energy costs rose by 27% year-on-year, while raw materials costs rose by 47% year-on-year. BUA Cement’s profit grew by 2.8% to US$96.4m, from US$93.9m.

Nigeria: BUA Group chair Abdulsamad Rabiu has told investors that BUA Cement will commission its upcoming Sokoto cement plant by 31 January 2024, the Punch newspaper has reported. Rabiu said that the producer is ‘working tirelessly’ to deliver the plant on time, in order ensure a local supply of cement at a reasonable price.

Dangote Cement felt compelled to issue a statement clarifying its prices at the end of August 2023. In the release it stated what its ex-factory price was in Nigeria and added that transport costs and the location of a delivery could add additional expense. It made the declaration in response to alleged “misinformation” on social media channels that the company had been selling its cement more cheaply in the neighbouring country of Benin. A subsequent investigation by the This Day newspaper reported that Dangote Cement does not officially export cement to Benin and that the average price in the country was actually slightly higher than the end prices Dangote Cement provided. Competitor BUA Cement wasted no time though in saying at its annual general meeting that it would ‘crash the price of cement.’

All of this may sound familiar because a similar argument broke out in early 2021. At that time prices were rising following the outbreak of Covid-19, although other factors were at play. Then as now, Dangote Cement, the largest domestic producer, defended itself by publishing its prices and BUA Cement made another showy claim saying that it had no plans to raise the ex-factory price of its cement at the present time or in the future, “…barring any material, unforeseen circumstances.” The government also became involved with the Senate of Nigeria discussing the matter in relation to potential legislation at the time. Part of the problem here has been that Dangote Cement is the biggest producer and it has gradually started exporting cement from Nigeria in recent years and, regardless of any effects to the domestic market, it leaves it exposed to the kind of unsubstantiated scuttlebutt it has faced recently. Back in 2021 it briefly stopped exporting cement for a while before resuming it again in May 2021.

Graph 1: Half-year sales revenue from selected large cement producers in Nigeria. Source: Company reports.

Graph 1 shows how some of the large cement producers in Nigeria did in the first half of 2023. Dangote Cement is the market leader by a considerable margin and the figures here do not even include its sales elsewhere in Sub-Saharan Africa. Despite its market dominance its sales revenue has fallen so far in 2023 and the company blamed election uncertainty, a “cash crunch”, negative currency exchange issues and the weather. That said though it did manage to increase its earnings through initiatives such as using alternative fuels, making efficiencies at its plants and utilised compressed natural gas in its truck fleet.

BUA Cement and Lafarge Africa provided less descriptive context in their release. Both BUA Cement’s revenue and profit after tax rose year-on-year but Lafarge Africa’s profit after tax fell. This may have been due to a rise in fixed production costs such as staffing, by-products costs and electricity, although depreciation was also an issue.

For all of BUA Cement’s talk of “crashing the cement price” it is preparing to commission two new 3Mt/yr production lines at its Obu and Sokoto plants respectively in the first quarter of 2024. Given everything else that is going on in the Nigerian economy, such as inflation, and the large size of the country it seems unlikely to lower the price although it might slow down the rate by which the price continues to rise. In its 2022 annual report BUA Cement’s managing director Yusuf Haliru Binji said that the new production lines would enable it to potentially increase its exports. This is the logical next step for a local sector outgrowing its domestic bounds and this is exactly what Dangote Cement has done. Yet, as the recent price debacle has shown, the price of cement matters to Nigerians. If the price keeps going up all of the local producers may end up facing negative attention whether warranted or not.

Nigeria: BUA Cement says that it expects to inaugurate its upcoming Okpella and Sokoto cement plants in early 2024. The Punch newspaper has reported that chief financial officer Jacques Piekarski said the plants will have a combined capacity of 6Mt/yr, and will raise BUA Cement’s Nigerian cement capacity by 54% to 17Mt/yr from 2024.