By Samson Echenim
By Samson Echenim
*Total capacity to hit 11 million mtpa
One of Africa’s largest conglomerates, BUA Group, on Wednesday said it is executing a merger of its two cement subsidiaries comprising the publicly listed Cement Company of Northern Nigeria Plc (CCNN) with two million metric tonnes per annum (mtpa) capacity and the 6-million mtpa Obu Cement Company Plc as part of a strategic plan to consolidate the group’s cement production and deepen its stake in the product’s market.
The company also announced that its newest 3-million metric tonnes cement plant, which it started constructing in 2018 – the $450 million Sokoto Kalambaina II plant, is scheduled for completion in the second quarter of 2020.
While the group said the move is in its bid to deepen the Nigerian capital market and enhance the growth of the cement industry, analysts predict that this would put BUA Cement in a stronger position to compete even better and explore export opportunities in neighbouring countries.
With the consolidation and addition of the Sokoto Kalambaina II plant, this will bring BUA Cement’s total installed capacity across all its cement holdings to 11 million MTPA.
Commenting, Abdul Samad Rabiu, founder and executive chairman of BUA Group, said this consolidation marked the culmination of the first phase of the BUA mid-term strategic plan for its cement businesses, which currently include four cement plants spread across Obu Cement Company and the Cement Company of Northern Nigeria.
According to Rabiu, a new $450million Sokoto Kalambaina II Plant is scheduled to come on stream in the second half of 2020 alongside another 48MW power plant to complement the existing assets and take advantage of a growing cement market in Northern Nigeria and the West African region.
“This consolidation will cement BUA’s position as the second largest cement producer in Nigeria whilst also positioning it to take advantage of the combined synergies to effectively serve Northern and Southern Nigeria based on the strategic locations of these plants – as well as a sizeable export market,” Rabiu said, in a filing to regulators.
“We intend to continue creating value for the benefit of shareholders of the consolidated company by maintaining our focus on outperforming the Nigerian cement industry across key indices through a laserlike commitment to excellent products and service delivery, operational efficiency as well as maintaining our leadership positon in our home markets,” he added.