Chairman of BUA Cement Plc, Abdul Samad Rabiu, has projected a significant decline in commodity prices — including cement — in the near future, driven by improvements in the naira exchange rate and reduced production costs.
Speaking at the company’s 9th Annual General Meeting (AGM) held in Abuja yesterday, Rabiu linked the ongoing price pressures to broader macroeconomic conditions, but expressed optimism about an improving outlook.
“We are reaching an exchange rate of $1,500 to the dollar. I’m optimistic that going forward, we’ll see the naira possibly appreciate to N1,200 or even below. When that happens, prices will come down — not just for cement, but for other commodities too,” Rabiu told journalists after presenting the company’s 2024 annual report.
Responding to questions about the current N10,000 per bag retail price of cement, Rabiu said the figure reflects production realities rather than profiteering. “It is the cost of production that has kept the price at around N10,000,” he stated. “We have invested billions of dollars in BUA Cement over a period of 20 to 30 years. A return of N69 billion profit after tax — which translates to about $40 million — on such a large investment is not excessive.”
He pointed out that energy remains the single largest cost driver for the company, prompting BUA Cement to invest in a mini liquefied natural gas (LNG) facility. The facility is expected to reduce energy costs across its plants and bolster operational efficiency. “There’s a lot of money going into gas. We want to manage that cost internally to the extent possible,” Rabiu said.
The company delivered a good financial performance in 2024 despite macroeconomic headwinds, including further depreciation of the naira and rising input costs. Revenue rose by 90.5 per cent to N876.5 billion, up from N460 billion in 2023. Earnings before interest, tax, depreciation, and amortisation (EBITDA) increased to N268.6 billion, a 43.8 per cent rise from the previous year’s N186.8 billion.
Profit before tax climbed by 48.2 per cent to N99.63 billion in 2024, up from N67.2 billion in 2023. However, foreign exchange losses also increased, reaching N93.9 billion compared to N69.9 billion in the prior year.
The company’s return on average capital employed (ROACE) improved to 15 per cent, up from 10 per cent in 2023. Earnings per share (EPS) also rose by 6.3 per cent from N2.05 to N2.18.
“This performance was driven by a combination of increased dispatch volumes and prudent pricing strategies, even as we absorbed rising input costs,” the Chairman stated.
Strong cash generation enabled the company to finance its capital expenditure plans and reduce foreign currency exposure. BUA Cement paid down import finance facilities and restructured accrued interest payments in line with its available cashflows.
A dividend of N2.05 per share has been proposed for shareholders, representing a payout ratio of 94 per cent — continuing the company’s tradition of distributing over 90 per cent of annual profits.
BUA Cement expanded its installed production capacity from 11 million to 17 million metric tonnes per annum in 2024 through the commissioning of new production lines in Edo and Sokoto states. This move has further strengthened the company’s position in Nigeria’s cement market.
Construction has also commenced on a new greenfield plant in Ososo, Edo State, with an expected capacity of 3 million metric tonnes per annum. Upon completion by the first quarter of 2027, the company’s total installed capacity will rise to 20 million metric tonnes per annum.
To support its expanded operations, the company made significant investments in logistics, acquiring new trucks and deploying a digital self-service solution to streamline payment and order fulfilment. This has shortened turnaround time and enhanced customer experience.
In order to improve corporate governance, BUA Cement formally separated its Internal Audit and Internal Control functions in 2024. The restructuring has enabled more focused oversight of risk management, financial reporting accuracy, and operational integrity. Separate teams now manage both units to ensure independence and better checks and balances.
Additionally, the company’s Board approved the appointment of a consultant to review and update the Succession Planning Policy. The aim is to ensure continuity in leadership, address key-person risks, and align the company’s succession framework with international best practices.
On the risk management front, BUA Cement transitioned to a more comprehensive, enterprise-wide reporting structure. The Risk Management Committee, chaired by a Non-Executive Director, now oversees all risk-related matters, with reports regularly submitted to the Board along with mitigation strategies and defined responsibilities.
“We are committed to maintaining transparency in all our engagements — with regulators, stakeholders, and shareholders,” Rabiu said. “Our AGM proceedings, investor calls, and disclosures on the Nigerian Exchange platform reflect our belief in open and inclusive dialogue.”
Managing Director and Chief Executive Officer Yusuf Binji credited the company’s performance to a combination of strong leadership, a diverse workforce, and a research-driven operational culture.
“Our ability to anticipate and meet customer demands is rooted in the varied perspectives across our team,” Binji said. “This is the cornerstone of our success.”
He added that the company’s adherence to quality and environmental standards was validated by 100 per cent recertification for ISO 9001 (Quality Management) and ISO 14001 (Environmental Management) in 2024.
“These certifications demonstrate our commitment to sustainable business practices and raise the bar for excellence in the cement industry,” Binji said.
Looking forward, BUA Cement plans to focus on four core strategic priorities: optimisation of production capacity, prudent debt management, market expansion into underserved regions, and the integration of digital technologies across operations.
“BUA Cement is strategically positioned to tackle Nigeria’s infrastructure challenges. Our journey ahead is about delivering exceptional value to shareholders and playing a critical role in national development,” Binji said.
