The investment of $1 billion in Obu Cement Plant in Edo State by the BUA Group is seen as a boost to the Federal Government’s drive for investments to reboot the economy. Asst Editor OKWY IROEGBU-CHIKEZIE writes that the massive investment could change the economic landscape of the state and the country.
With the investment of $1 billion in its cement plant in Okpella, Edo State, which, arguably, boasts Nigeria’s finest limestone depository, the BUA Group may have set the stage for the transformation of the state’s economy and, by extension Nigeria’s.
For one, the newly-inaugurated cement plant, which has the capacity to produce three million metric tonnes of cement yearly, is seen as a big boost and a massive intervention to address the domestic deficit in cement products for construction.
With the plant’s state-of-the-art setup seamlessly structured to facilitate the export drive, the investment is also seen as a significant boost for the nation’s cement self-sufficiency drive.
BUA Group, according to its Chairman/Chief Executive Officer, Abdul Samad Rabiu, is building the second Obu cement line.
Rabiu, who spoke at the launch of the facility, noted that the cement plant would reposition Nigeria from a cement importer to an exporter, increase production capacity from three million tonnes to 45 million tonnes by 2018.
He said the cement sub-sector, which accounts for over 90 per cent of Nigeria’s mining sector, has the potential to shore up the $2 billion it injects into the country as foreign exchange (forex).
Rabiu, however, said infrastructure, particularly stable power as well as policy consistency, was necessary to achieving a significant growth in the sub-sector. He said that the investment could double the sub-sector’s current 30,000 direct employment and over two million indirect jobs.
“These kinds of investments in important sectors of the economy are not only necessary, they are critical.
“In order to reverse our import dependency and diversify the economy, large corporations have to engage in game-changing investment in sectors such as agriculture, mining, and infrastructure, while government at all levels ensures an enabling environment for the investments to thrive,” Rabiu said.
He said the vision of the company was to provide Nigerians with the best quality cement, using the best technology and best hands at the most affordable price. According to him, the choice of Okpella, in Estako East Local Government Area of the state, as the site for the plant, is strategic.
“This community has the best limestone in the whole of the country,” Rabiu said, adding that the location is very good, being in the mid-west and it is very close to the cement market in the north, with excellent road networks in the south-west and to the east. “So, this place is at a strategic location to adequately distribute cement all over Nigeria,” he added.
Rabiu also stated that the completion of the second line in the first quarter of 2018, being handled by SINOMA CBMI of China, is expected to take the company’s production capacity to six million metric tonnes per annum.
He expressed confidence that SINOMA, with their track record and vast expertise in deploying cement plants across the world, would deliver a world-class second line for the Obu Cement Plant. “It will also meet our stringent environmental, safety, quality and technical requirements for our plants and products,” he said.
The Obu Cement Plant utilises 9,000 tonnes of limestone and clay daily for its large-scale operations, while it produces 32.5, 42.5 and 52.5 grade cement. And the plant is engineered to be the most-environmentally- friendly cement plant in Africa with the most advanced dust emission control systems.
“Our technology has the latest filtration with capacity of less than 10 milligram per normal cubic meter. We use natural gas, which is a very clean energy for both our kiln as well as the power plant, in addition to having a very green environment,” Rabiu said.
At the inauguration of the plant and the ground-breaking of the second line, the Vice President, Prof. Yemi Osinbajo, pledged that the Federal Government would remove all human inhibitions to encourage investors.
Commending BUA management for the achievement, he said the project, which is a wholly Nigerian enterprise, planned and executed by a Nigerian team, is a big boost to the economy, with the opportunities it will provide for skilled and unskilled youths of the state and the country at large.
The Vice President noted that the plant’s output would guarantee self sufficiency of cement production for the nation, especially when BUA Group is using modern and efficient facilities with local materials. He said the company’s achievement had demonstrated that the Nigerian economic growth plan must be private sector driven.
Osinbajo assured the private sector that the Federal Government would endeavour to make policies that would remove bottlenecks. “We will continue to create the enabling business environment and will directly assist the private sector to grow, which will in turn grow the Nigerian economy,” he said.
According to him, the only feasible means to achieve a robust and far-reaching socio-economic development is to enable active involvement of private sector players and investors. Government resources, he said, cannot independently bridge the infrastructural and technological gap without the involvement of private sector resources.
Osinbajo noted that advanced economies attained significance by the contributions of major entrepreneurs such as the Chairman of BUA Group. He emphasised that it was imperative to build a symbiotic relationship with committed serial entrepreneurs and investors to drive economic growth and development.
His words: “Nation building is never judged by the number of new projects or fresh ideas that we begin; we are judged by what we complete and sustain. This country will only grow on the talent and resourcefulness of people like yourself who are ready to put their resources out and invest anywhere in the country, employ the local people in that community and add real value to the lives of Nigerians.”
Edo State Governor Godwin Obaseki commended the management of the company for taking the bold steps in 2015 to initiate the process of establishing the plant. He expressed happiness that the management had made success of the company, including completely turning around the acquired moribund Edo cement factory.
Obaseki said the vision and mission of the company were in line with the state government’s economic reform agenda, adding that “the State Government is ready to make Edo an industrial haven with friendly tax policies.
He reassured the group of ensuring the operating environment was comfortable with the promotion of responsible and attractive tax regime. The state, he said, has reformed her land management process in a fashion that makes acquisition of land, security of approvals and building permit feasible without social harassments or uncontrolled communal land administration.
Obaseki said: “We want to use this opportunity to invite other investors to emulate the BUA Group, come to Edo State and take advantage of the great potential in the state. Edo State is rich in limestone and other solid minerals, besides its status as an oil producing state. Government is resolute about economic diversification especially into areas where we have competitive and comparative advantage.”
The governor also informed that his administration has created the enabling business environment for potential investors to invest in an industrial park, located in Ologbo, in Ikpoba Okha Local Government Area of Edo State, where the gas transmission line and proximity to power is expected to boost economic activities and create investments in the state.
“We are currently designing an export processing zone with the initiative of investing in the Gelegele Port to boost production and agriculture, which is the major thrust of both the Federal and Edo State Governments’ economic diversification programme,” Obaseki added.
How the BUA journey began
The acquisition of a two million tonnes floating cement terminal labelled BUA Cement 1 in 2008 marked the company’s entry into the Nigerian integrated cement manufacturing. It was the first time the industry experienced a technology driven bulk-bagging of cement on a vessel.
It acquired majority stake in the publicly listed Cement Company of Northern Nigeria PLC (CCNN), as well as in Edo Cement Company Limited in the same year before investing in the construction of a Greenfield three million tonnes plant in Obu.
On the acquisition of CCNN, Rabiu said: “BUA’s investment in the cement line in Sokoto is the single largest private sector led investment in the North-Western part of Nigeria.
“This is particularly important because Sokoto cement was the largest employer of labour in Sokoto State after the State Government, and the 60-year-old company founded by the Sardauna of Sokoto needed that investment to keep those jobs.”
The effectiveness and efficiency of the plant in its first year of operation, which was over 90 per cent in an industry where efficiency averaged 60 per cent, led BUA to commence the construction of a second cement plant line of three million tonnes.
